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1CIEL Textile Limited • Annual Report 2012 •

Dear Shareholder,

The Board of Directors (“the Board”) of CIEL Textile Limited (“the Company”) is pleased to present its Annual Report for the

year ended June 30, 2012. This Annual Report was approved by the Board of Directors at a meeting held on

September 26, 2012.

We invite you to go through the Annual Report and look forward to seeing you at the Annual Meeting which will be held

on December 12, 2012 at 14:00 hours at the Company’s Registered Office, 5th Floor, Ebène Skies, Rue de l’lnstitut, Ebène.

Yours faithfully,

P. Arnaud Dalais

Chairman

2 • CIEL Textile Limited • Annual Report 2012

GroupProfile

06Notice of

Annual Meeting

04CorporateInformation

10Group Financial

Highlights and Ratios

12Chairman’sStatement

14

IndependentAuditors’

Report

51CompanySecretary’sCertificate

50Statements of

Financial Position

53Income

Statements

54Statements of

Comprehensive Income

55Statements of

Changes in Equity

57

Contents08

Group Structure


Key Dates

16Executive’s

Report

18 32Corporate

Governance Report

44Other Statutory

Disclosures

49Statement of

Directors’ Reponsibilities

30CorporateSocial and

EnvironmentalResponsibility

Statements of Cash Flows

58 115Proxy Form

117Postal Vote

59Notes to the

Financial Statements


Not ice ofAnnualMeet ing


Notice is hereby given that the Annual Meeting (“the Meeting”) of the shareholders of CIEL Textile Limited (“the Company”)

will be held on December 12, 2012, at 14:00 hours at the Registered Office of the Company, 5th floor, Ebène Skies, Rue de

l’Institut, Ebène.

The agenda for the Meeting is as follows:

1. To consider the Annual Report 2012.

2. To receive the report of the external auditors, Messrs. PricewaterhouseCoopers.

3. To consider and adopt the Group’s and the Company’s audited financial statements for the year ended June 30, 2012.

4. To appoint Mr. Maurice P. Dalais1 as Director of the Company.

5. To appoint Mr. Roger Espitalier Noël1 as Director of the Company.

6. To take note of the automatic re-appointment of Messrs. PricewaterhouseCoopers as external auditors in accordance

with Section 200 of the Companies Act 2001 and to authorise the Directors to fix their remuneration.

7. To ratify the remuneration paid to the external auditors for the year ended June 30, 2012.

By Order of the Board

Clothilde de Comarmond, ACISPer CIEL Corporate Services Ltd Company Secretary

November 1 , 2012

Notes:

(a) Any member is entitled to appoint a proxy, whether a member or not, to attend and vote at the Meeting or cast his vote by post.

(b) Proxy Forms should be deposited at the Registered Office of the Company, attention: The Secretary, at 5th Floor, Ebène Skies, Rue de l’Institut, Ebène

not less than twenty-four (24) hours before the Meeting.

(c) Postal votes shall reach the Registered Office within fourty-eight (48) hours of holding the Meeting.

(d) A proxy form and postal vote are included in this Annual Report and are also available at the Registered Office of the Company.

(e) For the purpose of this Meeting, the Directors have resolved that the shareholders who are entitled to receive notice and attend such Meeting shall

be those shareholders whose names are registered in the share register of the Company as at November 12, 2012.

(f) The minutes of the Annual Meeting held on December 19, 2011 are available for consultation by the shareholders of the Company during office

hours, at the Registered Office of the Company.

Footnote 1: The profiles of the Directors are found on pages 36 and 37.


Knitwear:

Floreal Knitwear Ltd

Floreal Madagascar SA

Floreal International Ltd

Ferney Spinning Mills Ltd

Ajax Sweaters Ltd

5 .1 mi l l ions w e a t e r s

Annual product ion

and 1 , 6 0 0 to n n e s of yarns


Group Prof i leCIEL Textile Limited is the holding company of the CIEL Group’s textile cluster. Through its subsidiaries, it is involved in three types of textile and apparel activities:

Knits:

Tropic Knits Ltd

TKL International Ltd

Tropic Mad SA

Consolidated Dyeing & Fabrics Ltd

Woven:

Aquarelle Clothing Ltd

Aquarelle International Ltd

Consolidated Fabrics Ltd

New Island Clothing Ltd

Aquarelle (India) Private Ltd

Aquarelle Madagascar SA

Laguna Clothing Ltd

12 mil l ionkni t ted sh ir ts

Annual product ion Annual product ion

and 3 , 5 0 0 to n n e s of kn i t ted fabr ic

12 mil l ionwoven sh ir ts

and 7. 2 m i l l i o n metres of woven fabr ic


Group Structure June 30, 2012

Inte

rnat

iona

lC

ompa

nies

GBL

1 C

ompa

nies

Loca

l Com

pani

es

100%

17.03%

0.22%


ConsolidatedDyeing &

Fabrics Ltd

Tropic KnitsLtd

82.97%

100%

TinkaInternational Ltd

TropicMad S.A

SociétéSoboma

33.3% 33.3%33.3%

20%

80%

99.48%

100%

De Nyon Ltd

100%

FlorealManufacturing Ltd

PropertyKnits

FlorealInternational Ltd

Société CivileImmobilière des

Mascareignes

Texaro SA

100%

FlorealKnitwear Ltd

100%

FerneySpinningMills Ltd

100%

FlorealKnowledgeCentre Ltd

100%

FlorealMadagascar S.A

Knitwear Retail

CTLRetail Ltd

100%

InfoclickConsulting

Co Ltd

Harris WilsonTextiles S.A.

(France)Cieltex S.A Pty Ltd Ajax Sweaters Ltd

33.33%33.33%33.33%99.9% 0.10% 22%

Woven

100%

100%

AquarelleClothing Ltd

50%

100%

New IslandClothing Ltd

ConsolidatedFabrics Ltd

AquarelleInternational Ltd

100%

80%

99.9%

49.93%100%

AzzurriCompany Ltd

New IslandClothing

Madagascar SA

Aquarelle India(Private) Ltd

100%

InternationalFabrics Ltd

Laguna Clothing Ltd

AquarelleMadagascar S.A

IndustrialConsultancyServices Ltd

Other

98.80%

83.52%

99.98%

99.80%

100%

0.20%


C ie l Investment L imi ted

C I E L Tex t i l e L i m i te d

Inte

rnat

iona

lC

ompa

nies

GBL

1 C

ompa

nies

Loca

l Com

pani

es

100%

17.03%

0.22%


ConsolidatedDyeing &

Fabrics Ltd

Tropic KnitsLtd

82.97%

100%

TinkaInternational Ltd

TropicMad S.A

SociétéSoboma

33.3% 33.3%33.3%

20%

80%

99.48%

100%

De Nyon Ltd

100%

FlorealManufacturing Ltd

PropertyKnits

FlorealInternational Ltd

Société CivileImmobilière des

Mascareignes

Texaro SA

100%

FlorealKnitwear Ltd

100%

FerneySpinningMills Ltd

100%

FlorealKnowledgeCentre Ltd

100%

FlorealMadagascar S.A

Knitwear Retail

CTLRetail Ltd

100%

InfoclickConsulting

Co Ltd

Harris WilsonTextiles S.A.

(France)Cieltex S.A Pty Ltd Ajax Sweaters Ltd

33.33%33.33%33.33%99.9% 0.10% 22%

Woven

100%

100%

AquarelleClothing Ltd

50%

100%

New IslandClothing Ltd

ConsolidatedFabrics Ltd

AquarelleInternational Ltd

100%

80%

99.9%

49.93%100%

AzzurriCompany Ltd

New IslandClothing

Madagascar SA

Aquarelle India(Private) Ltd

100%

InternationalFabrics Ltd

Laguna Clothing Ltd

AquarelleMadagascar S.A

IndustrialConsultancyServices Ltd

Other

98.80%

83.52%

99.98%

99.80%

100%

0.20%

Corporate Informat ion

BOARD OF DIRECTORS

P. Arnaud Dalais (Chairman)G. Christian Dalais (up to June 18, 2012)Maurice P. Dalais (as from June 18, 2012)Antoine Delaporte Henri de Simard de PitrayRoger Espitalier Noël (as from June 18, 2012)P. Jérôme Lagesse J. Harold MayerDidier Merven (up to September 5, 2011)Alain ReyEddy Yeung Kan ChingJérôme De Chasteauneuf (Alternate to P. Arnaud Dalais)

BOARD COMMITTEES

CORPORATE GOVERNANCE, REMUNERATION AND NOMINATION COMMITTEEHenri de Simard de Pitray (Chairman) P. Arnaud DalaisAntoine Delaporte

AUDIT AND RISK COMMITTEEAlain Rey (Chairman)Jérôme De ChasteauneufP. Jérôme Lagesse


FINANCIAL & SECRETARIAL SERVICESCIEL Corporate Services Ltd5th Floor, Ebène Skies,Rue de l’institut, EbèneMauritiusTel: (230) 404 2200Fax: (230) 404 2201

TREASURY SERVICESAzur Financial Services Limited

REGISTRAR AND TRANSFER OFFICEIf you are a shareholder and have inquiries regarding your account, wish to change your name and address, or have questions about lost certificates, share transfers or dividends, please contact our Registrar and Transfer Office:

MCB Registry & Securities LimitedRaymond Lamusse Building9-11, Sir William Newton StreetPort LouisTel: (230) 202 5397Fax: (230) 208 1167

REGISTERED OFFICE5th Floor, Ebène SkiesRue de l’InstitutEbèneTel: (230) 404-2200Fax: (230) 404-2201Email: [email protected]

MAIN BANKERSThe Mauritius Commercial Bank LimitedThe Hong Kong and Shanghai Banking Corporation LimitedBarclays Bank PlcBank One LtdStandard Bank (Mauritius) LtdThe State Bank of Mauritius Ltd

EXTERNAL AUDITORSPricewaterhouseCoopers18 CyberCityEbèneTel: (230) 404-5000Fax: (230) 404-5588/89

INTERNAL AUDITORSBDO & CoDCDM Building10, Frère Félix de Valois StreetPort LouisTel: (230) 202-3000Fax: (230) 202-9993

NOTARYEtude Montocchio – d’Hotman

LEGAL ADVISORSEtude de Comarmond-KoenigMe. Maxime Sauzier, Bar-at-LawMe. Patrice Doger de Spéville, Bar-at-Law


Group F inanc ia l H igh l ights and Rat iosAs at June 30

THE GROUP

2012 2011 2010 2009 2008

FINANCIAL HIGHLIGHTS

Turnover (Rs. M) 8,643 7,876 7,054 6,863 6,523

Profit before Taxation (Rs. M) 611 232 287 84 129

Profit after Taxation (Rs. M) 516 214 229 49 127

Ordinary Dividends Paid (Rs. M) 102 56 46 38 51

Net Cash Flow from Operations (Rs. M) 1,003 (299) 405 337 190

Capital Expenditure (Rs. M) 126 170 215 187 216

Shareholders’ Funds (Rs. M) 2,875 2,501 2,452 2,101 2,139

Capital Employed (Rs. M) 3,453 3,526 3,523 2,994 3,013

Net Borrowings (Rs. M) 572 1,250 712 909 985

Interest Expense (Rs. M) 93 99 84 106 132

LIQUIDITY AND GEARING RATIOS

Current Ratio 1.43 1.39 1.42 1.32 1.26

Acid Test Ratio 0.69 0.68 0.78 0.76 0.67

Net Borrowings to Shareholders’ Funds Ratio 0.20 0.50 0.29 0.43 0.46

Interest Cover (times) 7.57 3.34 4.42 1.79 1.98

PROFITABILITY

Return on Capital Employed (%) 20.4 9.4 10.5 6.3 8.7

Return on Shareholders’ Funds (%) 17.2 7.7 8.4 1.3 4.9

Net Profit Margin (%) 6.0 2.7 3.2 0.7 1.9

2012201120102009200820122011201020092008

RETURN ON CAPITAL EMPLOYED

5

10

15

20

25

%

0

TURNOVER (Rs. M) PROFIT AFTER TAXATION (Rs. M)

20122011201020092008 20122011201020092008

1, 000 100

2, 000 200

3, 000 300

4, 000 400

5, 000 500

6, 000 600

7, 000 700

8, 000

9, 000

0 0

20122011201020092008

NET PROFIT MARGIN

1

2

3

4%

5

6

7

0

NET BORROWINGS (Rs. M)

400

500

600

700

800

900

1,000

1,200

1,300

0


Chairman’sStatement

Dear Shareholder,

On behalf of the Board of Directors (“the Board”), it is my pleasure to submit to you the Annual Report and audited results of CIEL Textile Limited (“CTL/the Company”) for the year ended June 30, 2012.

Group Financial ResultsAs recently announced in the published condensed financial statements, the Group posted significantly improved profits for the current year as a result of good order books, improved efficiency and aggressive cost reduction measures.Whilst all clusters and countries contributed positively to this year’s result, 70% of profitability was generated from our international operations.

Group profit after tax for the financial year ended June 30, 2012 stood at Rs. 515.9M (2011: Rs. 214.5M), a remarkable improvement on last year’s results.

The Group’s cash flow has also improved significantly and the Board has approved the redemption of Redeemable Preference shares which had been issued to the financial institutions in consideration for their financial support during the financial crisis which prevailed in Madagascar back in 2002/2003. This process will be completed within the financial year ending June 30, 2013 and therefore the said shares have been reclassified from equity to current liabilities as at June 30, 2012.

OutlookExternal factors remain generally negative, both on our major markets and on the currency front. Our short-term priorities remain to increase our sales potential and limit margin erosion due to excess supply over demand. As a result, we anticipate earnings in the coming first semester to be lower than that of the financial year ended June 30, 2012.

DividendIt is encouraging to note that for the financial year ended June 30, 2012, the Company has declared an interim dividend of Rs. 0.30 per ordinary share on February 14, 2012 (2011: Rs. 0.20) and a final dividend of Rs. 0.70 per ordinary share on June 18, 2012 (2011: Rs 0.35).


Floreal Knitwear LtdFloreal Knitwear Ltd celebrates this year 40 years of existence. I wish to thank all the employees who by their commitment, are placing the “Manufacturing excellence” at the heart of Floreal Knitwear Ltd’s factories with its high level of consistency, reliability and quality standards. Floreal Knitwear Ltd has now become the premier knitwear manufacturer in the African Sub Saharan Region and amongst the largest woolmark knitwear manufacturers in the world.

Textile industry in Mauritius started very much together with the opening of Floreal Knitwear Ltd 40 years ago by Hong Kong industrials. Officially opened on June 5, 1972, Floreal Knitwear Ltd was the first Knitwear factory to operate in Mauritius, producing knitted Shetland wool and lambswool sweaters on hand flat machines. Floreal Knitwear Ltd was then purchased in 1973 by Sir Pierre Dalais, representing CIEL, a subsidiary of Deep River-Beau Champ Limited at that time.

Floreal Knitwear Ltd employs today 5,300 team members and has now established itself as an International business with a vertically integrated woollen spinning mill and an annual production of 5 million high quality sweaters manufactured in Floreal’s own factories in Mauritius but also in two of the most competitive industrial locations in the world namely Madagascar & Bangladesh. It has given birth to CIEL Textile who employs now 17,000 people in four countries.

AppreciationOn behalf of the Board and in my own personal name, I would like to express my thanks and appreciation to the very committed management team of CIEL Textile and staff for the outstanding results achieved. I would also like to thank the Board members for their active support and contribution during the year. Special thanks to my colleague Director, Mr. G. Christian Dalais who has retired after having contributed to the affairs of the Company since the acquisition of Floreal Knitwear Ltd.

I would like to welcome Messrs. Roger Espitalier Noël and Maurice P. Dalais, who have been appointed Directors by the Board, and recommend their appointment by the shareholders at the coming Annual Meeting.

I invite you to go through the Executive’s Report for information on the operations of the different clusters of the Group.

P. Arnaud DalaisChairman

September 26, 2012


1 9 7 1I n c o r p o ra t i o n of F l o re a l K n i t we a r L t d a n d c o n s t r u c t i o n of t h e fa c to r y i n M a n g a l k h a n .

1 9 7 2F i rs t ex p o r t of s we a te rs to E u ro p e .

1 9 7 3Ac q u i s i t i o n of F l o re a l K n i t we a r L t d byS i r P i e r re D a l a i s o n b e h a l f of C I E L .

1 9 7 8C re a t i o n of Fe r n ey S p i n n i n g M i l l s L t d a n d ve r t i ca l i n te g ra t i o n w i t hF l o re a l K n i t we a r L t d .

1 9 8 0C re a t i o n of D ye rs & F i n i s h e rs L t d fo r d ye i n g wo o l .

1 9 8 8F l o re a l K n i t we a r L t d ta ke s ove r Ro c k wo o d Tex t i l e s L t d ( m a n u fa c t u re r of s we a te rs ) a n d Tro p i c K n i t s L t d ( m a n u fa c t u re r of t - s h i r t s ) . C I E L b u ys N ew I s l a n d C l ot h i n g L t d ( m a n u fa c t u re r of wove n s h i r t s ) .

1 9 9 0B e g i n n i n g of t h e G ro u p ' s re g i o n a lex p a n s i o n s . F l o re a l K n i t we a r L t d s ta r t s o p e ra t i n g i n M a d a g a s ca r.

1 9 9 3Tro p i c K n i t s L t d o p e n s a fa c to r y i nM a d a g a s ca r.

1 9 9 4L a u n c h of Aq u a re l l e C l ot h i n g L t d ( s h i r t m a n u fa c t u re r ) .

1 9 9 5Aq u a re l l e C l ot h i n g L t d s ta r t s i t s o p e ra t i o n s i n M a d a g a s ca r re n a m e d C o n s o l i d a te d Fa b r i c s L t d - p ro d u c t i o n of fa b r i c s fo r s h i r t s .

1 9 9 7Ac q u i s i t i o n of E s s a r Tex t i l e s L t d , re n a m e dC o n s o l i d a te d Fa b r i c s L t d - p ro d u c t i o n offa b r i c s fo r s h i r t s .

2 0 0 1C re a t i o n of C I E L Tex t i l e L t d .

2 0 0 2 / 2 0 0 3C a p i ta l a n d d e bt re s t r u c t u r i n g ofC I E L Tex t i l e L t d fo l l ow i n g a m a j o r p o l i t i ca l a n d s o c i a l c r i s i s i n M a d a g a s ca r.

2 0 0 5Aq u a re l l e C l ot h i n g L t d s ta r t s i t so p e ra t i o n s i n I n d i a .

2 0 0 6C re a t i o n of Pa s te l B l u e L t d ( p ro d u c t i o n of b l o u s e s fo r Wo m e n ) .

2 0 0 7Aq u a re l l e C l ot h i n g L t d a n dF l o re a l K n i t we a r L t d s ta r t o u t s o u rc i n g t h e i r o p e ra t i o n s i n B a n g l a d e s h .

2 0 1 0O p e n i n g of L a g u n a C l ot h i n g L t d , a p a r t n e rs h i p of Aq u a re l l e C l ot h i n g L t d w i t h Te s s i t u ra M o n t i S p a , i n Ka n a ka p u ra n e a r B a n g a l o re , I n d i a .F l o re a l K n i t we a r L t d s ta r t s i t so p e ra t i o n s i n i t s ow n fa c to r y i n B a n g l a d e s h .

2 0 1 2C I E L Tex t i l e L t d p ro d u c e s 3 0 m i l l i o n s we a te rs , T- s h i r t s a n d s h i r t s . I t e m p l oys 1 7, 0 0 0 p e o p l e i n fo u r d i ffe re n t c o u n t r i e s , n a m e l y M a u r i t i u s , M a d a g a s ca r, I n d i a a n d B a n g l a d e s h . I t s a n n u a l t u r n ove r i s R s . 8 . 6 B n a n d a l l b u s i n e s s e s , b ot h i n M a u r i t i u s a n d a b ro a d , a re p rof i ta b l e , g e n e ra t -i n g R s . 5 1 5 M p rof i t s a fte r ta x .

CIEL Textile key dates


Dear Shareholder,

Whilst external factors were rather negative during the past year (depressed market in Europe), CIEL Textile Limited (“CTL’’) has managed to grow its turnover and market share as well as doubled its profitability. This has been made possible as our “internationalisation strategy” is starting to pay off and continuous progress is being achieved on internal operational excellence of most of our operations. The other highlight this year is that all three clusters contributed positively to the Group’s profitability.

Overall, the Group’s turnover increased by 9.7% to Rs. 8,643Bn whilst net profit after tax grew by 140% from Rs. 214M to Rs. 515M. Most of the turnover’s growth was achieved in Asia, whilst the lion share of profit growth was attributable to Aquarelle Group’s operations in India (Aquarelle India (Private) Limited and Laguna Clothing Limited).

The woven division (Aquarelle Group) was the largest contributor to turnover, growth and profits. This is the result of an excellent strategy of internationalisation, with great management execution, starting to bear fruit. The Group’s operations in India had outstanding results, both in terms of customer satisfaction and profitability. Its regional operations also improved and investments in Pastel Blue (ladies blouses) and New Island Clothing Ltd (formal shirts) starting to pay off. There is a great management team in place and significant progress was made in operational excellence. Prospects for medium growth in sales and profitability are very good in the woven cluster which represent more than 50% of the Group’s turnover. The “globalisation” of Aquarelle Group’s business model and its management infrastructure are the short term challenges and priorities.

The knitwear division posted stronger profitability for the same level of turnover. This was attributable mainly to “regional” profitability (Mauritius and Madagascar) whilst Bangladesh operations were close to a break-even result. Operational excellence and customer satisfaction were maintained at an excellent level in the region, whilst a lot remains to be done for the Bangladesh operations to perform to the same level. Sales and margins dropped in the second half of the year. Management teams’ priority is therefore to consolidate regional sales and margins and build operational excellence and management infrastructure in Bangladesh.

The knits cluster has confirmed its “improvement process” by posting reasonable profits for the first time in three years. Operational effectiveness improved substantially at Tropic Knits Limited and, coupled with improved margins, explain the return to profitability. This return to profitability has provided a big motivational boost to its young and talented management team. However, a lot remains to be done to reach the high standards of customer satisfaction and operational excellence achieved in our woven and knitwear clusters. “Consolidation” is the key priority in this cluster to provide solid foundations for future growth and internationalisation strategy.

Execut ive’s Report


The performance of our divisions on the non-financial score boards can be summarised as follows:

- On the “customer satisfaction” score board, the knitwear cluster has performed very well as usual. The biggest progress was in the woven cluster where Aquarelle India (Private) Limited has had outstanding customer ratings and the rest of the cluster improved across the board on product quality.

The knits cluster showed marginal progress and a lot remains to be done on reliability, customer service and communication. As the market gets more competitive, internally, we need to further improve customer satisfaction and senior management is focused on leading its teams in this quest.

- Generally, “operational effectiveness” has posted another great year of general improvement, as evidenced by improved internal KPI’s across the board. Our yearly Manufacturing Excellence Award process is really paying off as cross-fertilisation and a healthy competition take place between our 18 factories and their management teams. The woven cluster has shown the fastest pace of improvements, closely followed by the knits cluster.

- On the “human capital” front, I am glad to report that in general, both the “quality” and the “attitude” of our teams are progressing. Improved profitability despite tough market conditions has been a confidence booster for our teams. Today, one of our strengths is to be able to attract quality people from Mauritius, Madagascar, India, Bangladesh and Europe, and our management teams are getting more and more international.

- From a “management infrastructure” (systems and organisation) standpoint, the woven cluster is the benchmark with excellent discipline in establishing and running world class systems and routines. Both the knitwear and knits clusters are focused on improving their score in this crucial area, so as to solidify their structure and performance. Floreal Bangladesh and Tropic Knits Limited are the Group’s priorities in the coming years in terms of developing world class management infrastructure.

In conclusion, the financial year ended June 30 2012, has shown very encouraging financial results, and I use this opportunity to congratulate our teams and thank them for their commitment and efforts. Our “software” (non-financial score boards) is also getting stronger.


Execut ive’s Report (Cont ’d)

External FactorsGlobally speaking, external factors affecting our operations are expected to be slightly negative in the short-term.

- Our major markets (Europe and USA) are not performing well as GDP growth is mild. However, our “minor” markets, South Africa and India are showing better growth rates and prospects.

- On the currency front, the Mauritian currency (our reporting currency) has continued to strengthen v/s customer and competitor baskets. This was mitigated by a sharp fall in the Indian Rupee, as well as weaker Bangladeshi Taka and Malagasy Ariary.

- On the competition front, there is still a”wish” by most customers to reduce their exposure to China. This benefits us as we are ”positioning” ourselves as the best alternative to China with our presence in the Indian and Sub-Sahara African region.

- Raw material prices have dropped to more reasonable levels and this is positive in view of pricing for our customers. Globally however, the market remains a buyers’ one and pressure on margins is being felt, especially in the knits and knitwear divisions.

Our StrategyOur ”best alternative to China” strategy by internationalising our operations into the Indian sub-continent is still on and appropriate. This process takes many years to successfully implement, but Aquarelle’s Group success in its internationalisation process has given us confidence that we can do it successfully. Floreal Knitwear Limited is undertaking its internationalisation in Bangladesh and is meeting challenges, which we are confident will be overcome.

As for Tropic Knits Limited, we need to further consolidate customer satisfaction, management infrastructure and operational excellence in the region before we invest in our growth in Asia.


Our short-term priority remains ”consolidation”, especially in the knits and knitwear divisions, whilst moderate growth will be pursued in Asia for the Aquarelle Group. Our ambition to be part of ”The Club” of world class operations, supplying customers demanding very high standards of performance, remains a priority. We will therefore emphasise ”getting better” v/s “growing fast”.

OutlookThe first semester should show a drop in profitability as lower sales and margins in the knitwear cluster are expected to offset potential improved results in the woven and knits clusters.

As regards the second semester, results will depend on the quality of the order books and the operational effectiveness across our operations.

In the medium-term, only moderate growth is expected whilst we work on solidifying our management teams and management infrastructure.

I invite you to read the individual cluster reports which give more details on each of our three clusters.

J. Harold MayerChief Executive Officer

September 26, 2012

Tropic Knits Limited (“TKL”)As a result to the deep restructuring undergone throughout the last two years, TKL has confirmed its turnaround. Even though a slight reduction in turnover is noticed, the company is now posting its first profit in four years.

The major factors contributing to this improvement in profitability are:- Much improved fabric consumption control;- Good productivity gain in both Mauritius and Madagascar;- Good improvement of reject rate control;- A good order book with reasonable margins; and- A more mature management team with a better synergy with the fabric

mill’s one.

Operational performance has been up to expectation in Mauritius and good progress has been recorded in Madagascar. An improved efficiency, a globally lower reject rate, coupled with a balanced product mix have permitted an encouraging breakthrough. We have alsogiven very strong attention to inventory and stock control, internal audit as well as reinforcement of security across the operation.In terms of cost per minute reduction, even though the result shows a good trend, more progress is expected in the coming months, and we expect to soon close the gap with our local competitiors.

Customer satisfaction is generally good with some perspective of further improvement. Our target has now been reset to a more ambitious one, with the perspective to introduce new customers with higher profile.This 2012/2013 financial year will be the one of consolidation. We are actually undergoing a deep rethinking of our market and product positioning and are setting the pace for a new five year strategy plan. We shall also explore the possibility to start some operations in the Far-East.For the next twelve months, international scene is still under low visibility and high uncertainty pertains.

Far-East competition is fierce and there is more pressure on prices. The improvement in the non-financial score board is the key to our success. This will only happen with a strong dynamic and motivated team who will deliver world class operational performance and strong customer satisfaction.

KNITS

Consolidated Dyeing & Fabrics Limited (“CDFL”)For the financial year ended June 30, 2012, CDFL posted a reasonable financial performance with profitability remaining at the same level as the previous year. Despite continuous improvement on all main operational key performance indicators, CDFL was affected by an under loading situation during the first semester of 2012. This resulted in a loss in economies of scale on fixed overheads and thus higher production cost per kilo.

Customer satisfaction in general remained on the upward trend. CDFL’s sales to the export market are now stable with a well established customer base. However, the management team remains cautious as product offering and quality are key elements to succeed on this market.

On the operational side, significant focus was put during the year to continuously improve product offering and quality. This was achieved through an important training program of our supervisors and “grassroots”, supported by external experts and consultants. We are confident that the team commitment and hard work towards operational excellence is making headway, as shown by the sustained progress of our operational key performance indicators.

On the energy side, CDFL kept improving its energy consumption (heavy fuel oil and electricity) per kilo of fabric produced during the year. The company’s capital expenditure for the year was mainly driven by product quality and energy efficiency. This moderated the impact of the continuously increasing energy costs on our cost per Kg. CDFL commitment towards carbon footprint emission reached another milestone this year by receiving the Blue Carbon Award 2011 in the “Absolute Industry” category from the Mauritius Export Association.

Cost of our main raw material, cotton yarn, is now stabilizing slowly since last year turmoil where we have seen very high volatility. However, management remains cautious in its sourcing strategy.

Despite the current economic climate, the management is confident that with the above strategy and actions, CDFL financial results should keep progressing.

Jean-Baptiste de Spéville, Chief Executive Officer of the Knits and Knitwear clusters

Bertrand Thevenau, Executive Director of TKL and CDFL

Guillaume Dalais, Executive Director of TKL and CDFL


Floreal Knitwear Limited (“FKL”)The profitability of FKL came from a high margin order book of the

Autumn/Winter 2012 season which was shipped this year, coupled with an

outstanding operational performance from all our units. Excellent delivery

and quality performance resulted in high customer satisfaction overall.

A review per geographical location of our operations is as follows:

Mauritius662,000 pieces were produced in Mauritius, all from automatic machines.

Excellent Key Performance Indicators were achieved in terms of reject

rate, on time delivery and quality levels. We are presently working on

upgrading some of the ageing machines for improved productivity.

The Mauritian factory is also at present testing and trialling new methods

which we expect will lower significantly the work minute content per

sweater. Successful methods will then be applied to Madagascar’s and

Bangladesh’s operations.

Madagascar3,072,000 pieces were produced from our two factories. World class

operational performance was also achieved. As you might recall in 2010,

we sold and leased back the building of our factory 2. The lease period

will not be renewed as from May 2014 and we are presently looking at

an alternative site to transfer this operation. This should be done in the

next low season so as to cause less impact on manufacturing output. The

loss of the AGOA status of Madagascar for exporting duty free to the

United States is making it more difficult for us to enter this market. We are

however keeping significant marketing efforts so as to be ready once the

Malagasy AGOA duty free status is restored.

BangladeshOur operation in Bangladesh, with a production of 1,189,000 pieces made

significant progress during the year and came close to a break-even

situation in its second year of existence. Bangladesh is a challenging

country to operate in and, as our country knowledge improves, we are

confident to build there not only a strong manufacturing base but also a

key marketing platform to capture the high customer presence and traffic

happening in this country.

KNITWEAR

ChinaAlthough we had a profitable year from our sub-contracting and training

operation in China with a production of 200,000 pieces, we have decided

to close this activity due to the rising costs and weak order book to be

placed there going forward.

Outlook and Prospect for the FutureDue to the current economic situation in Europe and the excess worldwide

manufacturing capacity we expect a lot of pressure on our margins for

the coming year. We are taking necessary steps to welcome new strategic

customers and to produce higher value products such as cashmere and

expect this will produce positive results in the medium term.

Ferney Spinning Mills Limited (“FSM” or “Ferney”)The strong manufacturing fundamentals and the right marketing strategy

have allowed FSM to counter the adverse market conditions, the

unfavourable and volatile currency and the rise in the price of wool.

FSM has shown positive financial results in June 2012.

FSM has sold 1,082,335 kgs of its production to FKL and 440,349 kgs to

the non-captive market. We are forecasting more growth on the external

market in the next financial year.

Ferney’s main market, Europe, is going through a major transformation

with the financial crunch and the economic crisis. In order to keep its level

of exports to Europe, Ferney needs more than the resilience it has shown

up to now. The future lies in Ferney’s strategy of value innovation. The

weaving and knitting collections of 2012 reflected Ferney’s strategy with

competitive and innovative blends for volume business with the right

colour forecasts.

Our market in the weaving sector is continuously growing in new

countries like Germany and Lithuania, the traditional UK and Italian

markets are also growing from strength to strength.

Customer satisfaction rating has been very high. In the UK the delivery

service from Bradford is now strongly anchored and it is giving stronger

customer allegiance with increase in business. Quality, innovation,

product engineering, on time delivery, quick response and regular visits to

customers in Europe are creating new opportunities for Ferney.

To improve our competitiveness we have recently invested to replace an

ageing production line. That investment will allow us to restructure our

work shift pattern to adapt to the new market and social conditions.

It will also improve work conditions on the spinning lines with automated

frames. The increase in capacity will also further help us respond to

shorter overloaded peak seasons with customers taking decisions much

later than usual. The line is also designed for coarse yarn production that

will respond to the new requirements of both the weaving and knitting

markets.

The forecasted financial results for the coming year will be lower due

to the worsening economic climate but with the growing market in the

weaving business, the constant efforts in FKL to sell woollen yarns and

the proactive management policies, we shall create new opportunities to

improve the budgeted results.

Jean-Baptiste de Spéville,

Chief Executive Officer of the Knits and Knitwear clusters

Mushtaq Sooltangos,

General Manager of FSM


The woven cluster’s profit after tax has increased from Rs. 103.3M in

2010/2011 to Rs. 268.9M in 2011/2012.

The major profit increase contribution came from our Indian operations

which have now overcome our initial manufacturing capacities build-up

costs. We have managed as well to turn all our 2010/2011 loss making

business units into profitable once in 2011/2012 (New Island Clothing

Limited, Pastel Blue and our Bangladesh trading operation).

Our reported turnover shows a 27% increase, which is mainly due to

15 months reporting of our India operations. On a 12 months basis, our

turnover has increased by 10%.

Our operations in India and Bangladesh account now for more than 40%

of our total turnover.

As explained in last year Executive’s report, we are now managing the

woven cluster into 4 sub-clusters:

• Casual shirts

• Formal shirts

• Ladies blouses

• Fabrics (Consolidated Fabrics Limited)

Casual Shirt: Aquarelle Clothing Limited Mauritius, Madagascar, India and Bangladesh - 7.5M piecesIt is by far our largest cluster with a 2011/2012 turnover of more than

Rs. 2.6Bn. After a challenging first semester mainly in our Mauritian

operation, we have experienced a continuous improvement of our

operational performances. The level of customer satisfaction is generally

on a very good trend, except for Bangladesh where we have recently

experienced some serious delivery delays. Our Bangladesh operation is

reporting to Mr. Nagesh Badida, General Manager of

Aquarelle India (Private) Limited since July 2012. Aquarelle India (Private)

Limited is our current benchmark for customer satisfaction and we

are very confident that Mr. Nagesh Badida will align Bangladesh’s

performance to the rest of the Group.

WOVEN

Formal Shirt: Laguna Clothing Limited (India) and New Island Clothing Limited (Mauritius) - 3.5M pieces2011/2012 highlight was surely the excellent profitability of

Laguna Clothing Limited and the break-even results achieved by

New Island Clothing Limited (“NIC”) (against Rs. 12M loss in 2010/2011).

Since January 2012, Mr. Elvis Cateaux, General Manager of NIC, is reporting

to Mr. Sarbajit Ghose, Executive Director of Laguna Clothing Limited who is

now heading our formal shirt cluster.

Customer satisfaction is generally very good and the quality of our formal

shirt cluster is excellent. NIC has now entered into the non-iron shirt market

segment in the USA, which is huge.

If initial orders are executed successfully, we shall experience a steady

growth of NIC in Mauritius.

Ladies’ Blouses: Pastel Blue (Mauritius and Madagascar)800,000 pieces2011/2012 was mainly a year of consolidation with major improvements in

operational KPIs and customer satisfaction, which have led to a profit after

tax of Rs. 10.6M against a loss in the previous year.

The product development capabilities are really outstanding, which have

allowed the company to rapidly attract new customers.

We are also expecting a continuous growth of Pastel Blue in the coming year.

Consolidated Fabrics Limited (“CFL”) - 7.2M metresWe have experienced some business drops from our regional non-captive

market which have seriously affected our profitability. The trend has been quite

positive in 2011/2012 on customer satisfaction and operational performances.

External demand remaining soft, we are actively increasing CFL’s fabric

purchase from our regional garment operations (Aquarelle Clothing

Limited, Pastel Blue and NIC).

Our order book is currently full, but margins remain low. 2012/2013

profitability will be challenging for CFL, but long term perspective

remains positive.

OutlookThe woven cluster is now strategically very well positioned with a very

strong presence in Asia.

Our sub-cluster approach has brought about a very material improvement

in specific product handwriting (Casual, Formal & Ladies) and is proving to

be a successful strategy.

Despite the challenging economic environment, we can be reasonably

optimistic about the woven cluster business perspectives.

Eric Dorchies, Chief Executive Officer of the Woven cluster and Executive Director of Aquarelle Clothing Limited

Pascal Walter, Executive Director of Consolidated Fabrics Limited

Sarbajit Ghose, Executive Director of Laguna Clothing Limited

Nagesh Badida, General Manager of Aquarelle India (Private) Limited

Eric Eynaud, General Manager of Pastel Blue

Elvis Cateaux, General Manager of New Island Clothing Limited


The continued weakening of the European economy and resulting loss of consumer

confidence, has led to a downturn in tourist spend and has made retailing conditions

extremely difficult.

Tourists continue to book on “All Inclusive” packages and restrict their spending

outside of the hotels to a minimum. Mauritian spend, has in turn also deteriorated.

We have at the same time, seen the opening of several new Malls and the arrival of

numerous new players. As a result of both a depressed market, a diluted consumer

spend and the erosion of our market share through the proliferation of new brands

and stores, our revenue has declined by 10% over the financial year.

In this difficult environment, measures were taken to lower our overheads and costs in

order to remain profitable.

2012/2013 is expected to remain morose and no upturn is expected in the immediate

future. Our focus will therefore be to consolidate our operations, reduce costs where

possible and growing customer satisfaction to compete with the new challenges

we are facing. To this effect, the Blu River shop in the Caudan will be closed and the

Harris Wilson shop will be renovated to incorporate both brands.

RETAIL

Peter Gilmour, General Manager of CTL Retail Ltd

The continued weakening of the European economy and resulting loss of consumer

confidence, has led to a downturn in tourist spend and has made retailing conditions

extremely difficult.

Tourists continue to book on “All Inclusive” packages and restrict their spending

outside of the hotels to a minimum. Mauritian spend, has in turn also deteriorated.

We have at the same time, seen the opening of several new Malls and the arrival of

numerous new players. As a result of both a depressed market, a diluted consumer

spend and the erosion of our market share through the proliferation of new brands

and stores, our revenue has declined by 10% over the financial year.

In this difficult environment, measures were taken to lower our overheads and costs in

order to remain profitable.

2012/2013 is expected to remain morose and no upturn is expected in the immediate

future. Our focus will therefore be to consolidate our operations, reduce costs where

possible and growing customer satisfaction to compete with the new challenges

we are facing. To this effect, the Blu River shop in the Caudan will be closed and the

Harris Wilson shop will be renovated to incorporate both brands.



CIEL Textile Limited (“CTL”) has been committed to a sustainable development policy for many years. In 2004, it became a partner in launching the Fondation Nouveau Regard,

the social responsibility arm of the CIEL Group and end of 2006, it opened the Vallée de Ferney to the public, while saving it from the destruction which had been planned for it.

This year, nearly Rs. 15M, of which Rs. 2.8M came from the CSR contribution of CTL as at June 30, 2011, have been spent on various projects.

The Fondation Nouveau RegardAccredited by the National CSR Committee as a Special Purpose Vehicle (“SPV”),

the Fondation Nouveau Regard (“FNR”) has been empowered to receive the CSR

tax contribution of the subsidiary and associate companies of CTL since

February 2010. It has since spent these funds on projects corresponding to the

criteria set by its Board of Directors, while following the legal guidelines of the law

governing this tax. Thus, this year, 80% of the amount received was used to finance

projects managed by local NGOs in such areas as the fight against poverty,

education, disability and health.

In line with government policy, the struggle against poverty has been the

spearhead of the Fondation Nouveau Regard’s action this year. At the end of

2010, FNR launched a large-scale integrated community development project in

partnership with Caritas: La Caze Lespwar.

fight

aga

inst

pov

erty

health

education

52%

20%

19%

9%

disability

Corporate Soc ia l a n d E nv i ro n m e n ta lRe s p o n s i b i l i t y

CSER


This project, located at Solitude, assists communities living in poverty and facing difficulties in the regions of Solitude, Triolet, Plaine des Papayes, Pointe

aux Piments, and now reaching even as far as Arsenal. It provides services adapted to the needs of these population groups: education and training,

community gardening, breakfast for pupils, sports, holiday activities for children, activities for women, and, in the next few months, a solidarity shop

and a pre-school centre/creativity centre. An average of 250 persons per week uses the centre.

In addition to this major project, FNR continues to foster the integration of street children by supporting the SAFIRE voluntary association, of which it

has been a partner since 2005.

In the field of education, FNR supports alternative education. Thanks to the ANFEN network and to the Zippy programme of ICJM, children with

learning difficulties have access to education.

FNR is also strongly committed to providing disabled children with access to education: thus, in January 2010 it opened the first secondary school

for deaf children in collaboration with the NGO Society for the Welfare of the Deaf. In 2010, the Form 1 pre-vocational programme was launched

with 20 pupils, then From II in 2011 and Form III in 2012. Today, around 50 children benefit from schooling and will be channelled to vocational training

courses at the end of it.

Overall, this year FNR has helped 3,500 direct beneficiaries and 60,000 indirect ones thanks, among other activities, to the coming publication of

40,000 information and prevention brochures concerning the most common cancers in Mauritius, in partnership with the NGO Link to Life.

In November 2011, FNR also sponsored the film Hope, of the NGO Friends in Hope, which supports persons with mental disorders and their families.

Sport and EnvironmentSport is a unifying factor for gathering young people in pursuit of sound and positive values. That is why this year CTL has supported the Curepipe

Starlight Sporting Club and the Faucon Flacq Sporting Club.

FNR has an ongoing commitment to support the Vallée de Ferney, more particularly for the setting-up of a “field station” with the objective to

serve as living and working research quarters for biodiversity conservation at Vallée de Ferney. The field station will also provide study experience

opportunities to local nature NGOs, University of Mauritius students and foreign researchers.

CorporateGovernanceReport



Corporate Governance Report Year Ended June 30, 2012

CIEL Textile Limited (“CTL” or “the Company”) is pleased to present its Annual Report for the year ended June 30, 2012. The audited

accounts for the year ended June 30, 2012, were approved by the Board of Directors at a meeting held on September 26, 2012.

CTL is a public company incorporated on January 19, 1971, and is listed on the Development & Enterprise Market (“DEM”) of the

Stock Exchange of Mauritius Ltd. CTL is registered as a Reporting Issuer with the Financial Services Commission since the promulgation

of the Securities Act 2005.

Compliance Statement

The Board and management of CTL reiterate their commitment to ensuring and maintaining a high standard of corporate governance

within the Company and the Group to ensure transparency and protection of the interests of CTL’s shareholders and all stakeholders at

large.

They also recognise the need to adapt and improve the principles and practices in light of their experience, regulatory requirements and

investor expectations.

This report describes the main corporate governance framework and compliance of the Company with the disclosures required under

the Code of Corporate Governance for Mauritius (the “Code”).

Constitution

The Constitution of the Company is in conformity with the provisions of the Companies Act 2001 and the DEM rules. There are no clauses

of the Constitution deemed material enough for special disclosure.

A copy of the Company’s Constitution is available upon request in writing to the Company Secretary at the Registered Office of the

Company, 5th Floor, Ebène Skies, Rue de l’Institut, Ebène.

Shareholding

As at June 30, 2012, the Stated Capital of the Company was as follows:

Rs. 685,865,487 represented by 101,807,589 no par value ordinary shares; and

Rs. 3,500,100 represented by 100 Redeemable B shares.

Shareholders holding more than 5% of ordinary shares of the Company at June 30, 2012, were:

Shareholder Number of Shares Held % Held

Deep River Investment Limited 26,164,111 25.70

IP Textile Holding Limited 26,164,112 25.70

Pershing LLC 6,739,600 6.62

CIEL Investment Limited 6,358,461 6.25

You may refer to page 8 for a detailed Group structure including the subsidiaries and associates of the Company.


Common Directors

The names of the common Directors within the holding structure as at reporting date are as follows:

CTLDeep River

Investment LimitedIP Textile

Holding Limited

P. Arnaud Dalais ✓* ✓

Maurice P. Dalais ✓ ✓

Antoine Delaporte ✓ ✓

Roger Espitalier Noël ✓ ✓**

P. Jérôme Lagesse ✓ ✓

* Chairman

**Alternate Director

Data Analysis of Shareholding

The Registrar and Transfer Office of the Company are administered by MCB Registry & Securities Limited.

The ownership of ordinary share capital by size of shareholding was as follows as at June 30, 2012:

Size of Shareholding (No. of shares)

Number of Shareholders

Number of Shares Owned

% Holding

1 - 500 820 108,633 0.11

501 - 1,000 162 123,662 0.12

1,001 - 5,000 410 1,055,383 1.04

5,001 - 10,000 126 915,583 0.90

10,001 - 50,000 243 5,700,816 5.60

50,001 - 100,000 56 3,862,219 3.79

100,001 - 250,000 48 7,624,732 7.49

250,001 - 500,000 9 2,702,019 2.65

500,001 - 1,000,000 6 4,900,572 4.81

Over 1,000,000 10 74,813,970 73.49

Total 1,890 101,807,589 100.00



Summary by Shareholder Category

The ownership of ordinary share capital by category of shareholding was as follows as at June 30, 2012:

CategoryNumber of

ShareholdersNumber of

Shares Owned%

Holding

Individuals 1,666 24,282,701 23.85

Insurance & Assurance Companies 8 1,697,345 1.67

Pensions and Provident Funds 21 2,831,821 2.78

Investment and Trust Companies 33 34,774,955 34.16

Other Corporate Bodies 162 38,220,767 37.54

Total 1,890 101,807,589 100.00

Note: The above number of shareholders is indicative due to consolidation of multi portfolios for reporting purposes. The total number

of active shareholders as at June 30, 2012 was 2023.

Communication with the Shareholders

During the year, quarterly, half-yearly and audited annual financial results of the Company and the CTL Group were submitted to

the Stock Exchange of Mauritius Ltd and Financial Services Commission immediately after their approval by the Directors and were

published accordingly.

All official news release of relevance to the investors are also posted on the CIEL Group’s website, www.cielgroup.com.

Shareholders are invited to attend the Company’s Annual Meeting, which remains the ideal forum for discussions with the Directors and

the management team.

The calendar of events is as follows:

Event Month

Financial year end June

Last Annual Meeting of the shareholders December

Declaration of dividend (for the financial year ended June 30, 2012):

- Interim February

- Final June

Publication of first quarter results November

Publication of half yearly results February

Publication of third quarter results May

Publication of full year results September



Dividend Policy

Dividend payments are determined by the profitability of the Company, its cash flows, its future investments and growth opportunities.

Directors make sure that the Company satisfies the solvency test for each declaration of dividend. A certificate of compliance with the

solvency test is signed by all Directors when a dividend is declared by the Board.

For the financial year ended June 30, 2012, the Company has declared an interim dividend of Rs. 0.30 per ordinary share on

February 14, 2012 (2011: Rs. 0.20) and a final dividend of Rs. 0.70 per ordinary share on June 18, 2012 (2011: Rs 0.35).

Board of Directors

The Directors believe it is essential for the Company and the Group to be led and controlled by an effective Board that provides

entrepreneurial leadership within a framework of sound controls. The Board is responsible for setting the Company’s and Group’s

strategic aims, its values and standards and ensuring the necessary financial and human resources are in place to achieve their goals.

The Board consists of Non-Executive, Executive and Independent Directors. The offices of Chairman and Chief Executive are held

separately.

The Independent Directors play a key governance role in protecting shareholders’ interests. They are independent and bring an external

dimension to the Board, whilst complementing the skills and experience of the Executive and Non-Executive Directors through their range

of knowledge, experience and insight from other sectors.

Mr. Didier Merven resigned on September 5, 2011.

Directors ‘ Profiles

P. Arnaud Dalais (Chairman)Executive Director

Mr. P. Arnaud Dalais joined the CIEL Group in August 1977 and was appointed Director of the Company on May 11, 1989. He was

nominated Group Chief Executive of the CIEL Group in November 1991 and Group Chairman in 2010. Under his leadership, the Company

and the CIEL Group at large, has gone through an important growth both locally and internationally. He is the Group Chief Executive

of Alteo Limited (formely Deep River-Beau Champ Limited) and Chairman of CIEL Investment Limited and of Sun Resorts Limited. He

also plays an active role at the level of the Mauritian private sector and has assumed the Chairmanship of a number of organizations

including the Joint Economic Council from 1999 to 2001. He is a member of the Company’s Corporate Governance, Nomination and

Remuneration Committee.

Directorship in listed companies in Mauritius: Caudan Development Ltd, Sun Resorts Limited, Promotion and Development Ltd,

Alteo Limited.

Maurice P. DalaisNon-Executive Director

Mr. Maurice P. Dalais was appointed Director of the Company on June 18, 2012. He is the Managing Director of Circonstance Estates

Ltd, a family-owned enterprise.

Directorship in listed companies in Mauritius: none


Antoine DelaporteNon-Executive Director

Mr. Antoine Delaporte was appointed Director of the Company on April 7, 2010. He is the founder and Managing Director of

I&P Management Limited, a private company managing private equity funds in the Indian Ocean and West African regions. Since

2000, he is also Director of Karina International Limited and of Karina Sarl in Madagascar and is also a member of the board of Vivo

Energy Mauritius Limited. Mr. Delaporte is the Chairman of the boards of C.E.A.L. in Mauritius and of Newpack SA and Socolait SA in

Madagascar. He is a member of the Company’s Corporate Governance, Nomination and Remuneration Committee of the Company.

Directorship in listed companies in Mauritius: Vivo Energy Mauritius Limited

Roger Espitalier NoëlNon-Executive Director

Mr. Roger Espitalier Noël was appointed Director of the Company on June 18, 2012. He holds a Certificate in Textile and Knitwear

Technology from the City of Leicester Polytechnic. He was nominated General Manager of Floreal Knitwear Ltd in 1998 and retired

on June 2010 after 36 years of services in that company. He is now acting as consultant for the CIEL Textile Group. He is a Director of

ENL Land Limited, ENL Investment Limited and ENL Limited.

Directorship in listed companies in Mauritius: ENL Land Limited.

Henri de Simard de PitrayIndependent Director

Mr. Henri de Simard de Pitray was appointed Director of the Company on October 27, 2003. For the past 8 years, he has been a

member of the Board of Spencer Stuart inc., one of the leading global executive search firms, of which he also chaired the Governance

Committee. He currently advises several listed European companies on the functioning of their Boards. He is the Chairman of the

Corporate Governance, Nomination and Remuneration Committee of the Company.

Directorship in listed companies in Mauritius: None

P. Jérôme LagesseNon-Executive Director

Mr. P. Jérôme Lagesse was appointed Director of the Company on April 7, 2010. He holds a degree in Finance and a degree in Business

Law from France. Between 2001 and 2006, he was a Management and Information System consultant at Accenture Paris where he

designed and implemented group management rules and IS of several worldwide companies. Since 2006, he joined I&P Management

(Indian Ocean) Limited as an Investment Manager. Mr Lagesse also sits on the board of C.E.A.L. He is a member of the Audit and Risk

Committee of the Company and chairs the Sub-Audit Committees of the knits, knitwear and woven clusters.


J. Harold MayerExecutive Director

Mr. J. Harold Mayer was appointed Director of the Company on July 7, 2003. He holds a Bachelor in Commerce and qualified as

Chartered Accountant - South Africa. He has been very active in the management team of various companies of CIEL Textile Group

since 1990 and was appointed Chief Executive Officer in 2006.


Alain ReyIndependent Director

Mr. Alain Rey was appointed Director of the Company on November 12, 2007. He is a member of the Institute of Chartered Accountants

of England and Wales and holds a BSc in Economics. He is the IRS Project Director of Compagnie Sucrière de Mont Choisy and has a

long experience in the textile industry. He is the Chairman of the Company’s Audit and Risk Committee.

Directorship in listed companies in Mauritius: State Bank of Mauritius Ltd



Eddy Yeung Kan ChingIndependent Director

Me. Eddy Yeung Kan Ching was appointed Director of the Company on June 24, 2003. He has been an active member of the

management team of the Group since 1978 when he joined Ferney Spinning Mills Ltd and has been the Chief Operating Officer of

the spinning, weaving and dyeing operations of the Group until June 30, 2008, when he retired. He now works as a consultant for the

CIEL Textile Group.

Directorship in listed companies in Mauritius: none

Jérôme De ChasteauneufAlternate Director

Mr. Jérôme De Chasteauneuf was appointed Alternate Director of Mr. P. Arnaud Dalais on November 1, 2006. Qualified as Chartered

Accountant of England and Wales, he joined the CIEL Group in 1993 as Corporate Finance Advisor. He became Head of Finance of

CIEL Group in 2000 and was also appointed Managing Director of CIEL Corporate Services Ltd in 2010. He played an active part in the

CIEL Textile Group’s restructuring in 2001. He is a member of the Company’s Audit and Risk Committee.

Directorship in listed companies in Mauritius: Harel Mallac Limited, Ipro Growth Fund Limited

Profiles of the Senior Management Team

J. Harold MayerChief Executive Officer

Please refer to page 37.

Eric DorchiesChief Executive Officer of the Woven cluster

Holder of a diploma from the “Ecole Supérieure de Commerce” in Paris, he joined the Group in 1998 as General Manager of

Consolidated Fabrics Ltd and was appointed Managing Director of Aquarelle Clothing Ltd in 2003. He was appointed Chief Executive

Officer of the woven cluster of the CIEL Textile Group on July 1, 2008.

Jean-Baptiste de SpévilleChief Executive Officer of the Knits and Knitwear clusters

Holder of a B. Sc in Mechanical Engineering from the University of Natal, RSA and an MBA from the Edinburgh Business School,

Mr. de Spéville joined Ferney Spinning Mills Limited in May 2006 as General Manger after 13 years spent in the beverages industry. He

was nominated Chief Executive Officer of the knits and knitwear clusters on July 1, 2011.

Board Attendance

During the year under review, there were three (3) Board meetings, at which the Directors reviewed and adopted the Company’s and

Group’s audited financial statements, approved the Company’s and Group’s budgets, quarterly results, declaration of an interim and a

final dividend amongst other items. The Board was also appraised on the performance of the investee companies by the management.


The attendance of the Directors at these meetings was as follows:

DirectorsNumber of Meetings

Attended

P. Arnaud Dalais, Chairman 3 out of 3

G. Christian Dalais* 3 out of 3

Maurice P. Dalais** 1 out of 3

Antoine Delaporte 3 out of 3

Roger Espitalier Noël** 1 out of 3

Henri de Simard de Pitray 3 out of 3

P. Jérôme Lagesse 3 out of 3

J. Harold Mayer 3 out of 3

Alain Rey 2 out of 3

Eddy Yeung Kan Ching 2 out of 3

* Mr. G. Christian Dalais resigned on June 18, 2012

** Messrs. Maurice P. Dalais and Roger Espitalier Noël were appointed Directors by the Board on June 18, 2012

Board Committees

Although the Board is ultimately responsible for the performance and affairs of the Company, it has set up Board committees to assist

the Directors in discharging their duties through a more comprehensive evaluation of specific issues, followed by well-considered

recommendations to the Board.

Audit and Risk Committee – The Committee is chaired by an Independent Director and consists of three (3) members. During the

year under review, the Committee met four (4) times. The composition of the Committee as well as the particulars of attendance at

meetings during the year is given in the table below:

MembersNumber of Meetings

Attended

Alain Rey, Chairman 4 out of 4

Jérôme De Chasteauneuf 4 out of 4

P. Jérôme Lagesse 4 out of 4

The broad terms of reference of the Committee are to:

(i) Review the integrity of quarterly financial statements and recommend their adoption to the Board of Directors prior to filing and publication;

(ii) Review the effectiveness of the Company’s internal control and risk management systems;(iii) Monitor and supervise the effective function of the internal audit; and(iv) Oversee the process for selecting the external auditor, assesses the continuing independence of the external auditor and approve

the audit fees.



The Committee examined and made recommendations to the Board on the Company’s audited accounts and interim results, budget and

dividend. The Committee also analysed internal audit reports.

The fees of the external and internal auditors were reviewed by the Committee who proposed same for approval to the Board.

The Financial Controller of CTL Group also attended these meetings. In addition, internal and external auditors were invited to explain

the internal audit reports and audited accounts.

Sub-Committees of the Audit and Risk Committee were established at the level of the knits, knitwear and woven clusters. These meetings

serve as forum to discuss reports from internal/external auditors and monitor progress on corrective actions prescribed by the auditors

in view of eliminating/controlling high risk issues identified.

These sub-committees consist of three (3) members, namely Messrs. P. Jérôme Lagesse (Chairman), Jérôme De Chasteauneuf

(Head of Finance of the CIEL Group) and Bertrand Rivalland (Financial Controller of CTL Group). The management of each cluster is also

invited to attend these meetings.

Corporate Governance, Nomination and Remuneration Committee – The Committee is composed of three (3) members

and has met twice (2) during the year.

The attendance of the members at these meetings was as follows:

MembersNumber of

Meetings Attended

Henri de Simard de Pitray 2 out of 2

P. Arnaud Dalais 2 out of 2

Antoine Delaporte 2 out of 2

The main attribution of the Corporate Governance, Nomination and Remuneration Committee is to provide guidance to the Board on

aspects of corporate governance and for recommending the adoption of policies and best practices as appropriate for the Company.

The Committee approved the Corporate Governance Report which was published in the 2011 Annual Report and recommended to the

Board the nomination of Messrs. Roger Espitalier Noël and Maurice P. Dalais as additional Directors in light of Messrs. Didier Merven’s

and G. Christian Dalais’ resignations.

Together with its duties, the Corporate Governance Committee is also responsible for remuneration and nomination matters.The Directors

believe that the success of the Company depends to a large extent on its ability to attract and retain the best performing people and

to provide a stimulating and motivating environment. The Corporate Governance, Nomination and Remuneration Committee makes its

recommendations based on this conviction.


Directors’ Interests in Shares

The Directors’ interests in the capital of the Company as at June 30, 2012 were as follows:

Name of DirectorDirect Shareholding

Number of SharesIndirect Shareholding

Number of Shares

P. Arnaud Dalais 1,813,840 1,550,097

G. Christian Dalais - 100,000

Maurice P. Dalais 106,729 56,723

Antoine Delaporte - -

Roger Espitalier Noël - 95,578

Henri de Simard de Pitray - -

Patrice Jérôme Lagesse 5,000 -

J. Harold Mayer 1,778,259 -

Alain Rey 3,052 -

Eddy Yeung Kan Ching 13,140 2,389

Jérôme De Chasteauneuf (Alternate to P. Arnaud Dalais)

418 -

The Directors did not acquire or sell Company’s shares during the year.

The Directors and officers of the Company have been made aware of their responsibilities in disclosing to the Company any acquisition

or disposal in the Company’s securities, as per the Securities Act 2005 and DEM rules.

Directors’ and Officers’ Liability Insurance

The Company has renewed its Directors’ and Officers’ Liability Insurance for the 2012/2013.

Risk Management

Risk is managed on the day-to-day by management whilst the internal auditors assist the Board and management with the monitoring

of the risk management process.

Regular management reporting, which provides a balanced assessment of key risks and controls, is an important component of the

Board Assurance.

The finance department provides confirmation that financial and accounting control frameworks have operated satisfactorily. In

addition, the Board receives assurance from the Audit Committee, which derives its information, in part, from regular internal and

external audit reports on risk and internal control throughout the Company.

The Group’s and Company’s principal liabilities comprise of bank loans and overdrafts, finance leases and trade payables and other

payables to finance the operations.

The activities of the Company and the Group are exposed to a variety of financial risks: market risks, credit risk and liquidity risk. The

overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects

on the Group’s and Company’s financial performance.

A description of the risk factors is given in the financial statements as well the risk management policies which have been applied.



Statement of Remuneration Philosophy

The Group’s underlying philosophy is to set remuneration at an appropriate level to attract, retain and motivate high calibre personnel

and directors and to reward them in accordance with their individual as well as collective contribution towards the achievement of the

Group’s objectives and performance, whilst taking into account current market conditions. The Directors are remunerated for their

knowledge, experience and insight given to Board and Committees.

Internal Audit

The Board is ultimately responsible for the Company’s system of internal control and for reviewing its effectiveness. The internal control

system is independently monitored and supported by BDO & Co, to which the internal audit function has been outsourced. The internal

audit function reports to the Audit Committee on the Group’s financial and operational controls, and reviews the extent to which its

recommendations have been implemented.

Company Secretariat

All Directors have access to the advice and services of the Company Secretary who ensures good information flow to the Board and

its Committees, and between senior management and the Directors. The Secretary facilitates the induction of Directors and assists them

in fulfilling their duties and responsibilities. Through the Chairman, the Secretary is responsible for advising the Board on corporate

governance and for generally keeping the Board up to date on all legal, regulatory and other developments.

Agreements

No agreements other than those in the ordinary course of business were entered into during the year.

CIEL Corporate Services Ltd (“CCS”) provides company secretarial services to CTL Group of companies but also acts as its head office

and offers other services like finance, treasury, legal, payroll, communication and strategic support.

The Chairman of CTL is employed by CCS and plays a crucial role in defining and participating in the implementation of Group policies

and strategies, closely coordinating between the different clusters of the Group with an active presence on Board and Executive

Committee meetings of subsidiaries and associates.

The Registrar is undertaken by MCB Registry & Securities Ltd.

The Company holds an agreement with Azur Financial Services Ltd, a subsidiary of CIEL Corporate Services Ltd for the provision of

treasury management services to the Group.

Financial Risk Factors

Please refer to note 34 of the Financial Statements.

Related Party Transactions

Please refer to note 33 of the Financial Statements.

Share Price Information

The Company’s ordinary shares are listed on the Development & Enterprise Market of the Stock Exchange of Mauritius Ltd.


The evolution of the share price over the year has been as follows:

Date Share Price - Rs.

July 31, 2011 15.90

August 31, 2011 15.60

September 30, 2011 15.30

October 31, 2011 15.20

November 30, 2011 15.90

December 31, 2011 15.40

January 31, 2012 15.50

February 29, 2012 14.70

March 31, 2012 14.80

April 30, 2012 15.00

May 31, 2012 16.00

June 30, 2012 16.00

Annual Meeting of Shareholders

The Annual Meeting of Shareholders provides an opportunity for all shareholders to question the Chairperson and Directors on a

variety of topics, and information is provided at the meeting on different aspects of the Group’s activities.

The external auditors are also present to assist the Directors in answering queries from the shareholders.

Shareholders are encouraged to attend the Annual Meeting to stay informed of the Group’s strategy and goals.

Code of Ethics

The Company is committed to a policy for fair, honest dealing and integrity in the conduct of its business. This commitment, which is

actively endorsed by the Board, is based on a fundamental belief that business should be conducted honestly, fairly and legally.

Health and Safety Policy

CTL forms part of the CIEL Group of companies who believe in providing and maintaining a safe and healthy work environment for

all its employees. The objective being to optimize work efficiency and prevent accidents at work through the implementation of safety

standards.

Social Contribution

CTL annually contributes funds to Fondation Nouveau Regard (“FNR”), the Corporate Social Responsibility arm of the CIEL Group.

FNR has been involved over the past years in community development projects throughout the island, focussing on children in distress,

including those who grow up in the streets and those facing difficult family situations.

Clothilde de Comarmond ACIS

Per CIEL Corporate Services Ltd

Company Secretary

September 26, 2012


Other Statutory Disc losures(Pursuant to Sect ion 221 of the Companies Act 2001 )

Nature of Business

The principal activity of the Company is that of an investment holding company with interests in a number of companies involved in textile

activities.

Remuneration of the Directors

Remuneration and benefits received from the Company and its subsidiaries were as follows:

The Company Subsidiaries

2012 2011 2012 2011

Rs.’000 Rs.’000 Rs.’000 Rs.’000

Executive Directors Nil Nil 32,501 21,692

Non-Executive & Independent Directors 1,470 1,630 1,540 1,540

2012 2011

Rs.’000 Rs.’000

Executive Directors of Subsidiaries - - 35,428 36,632

The remuneration of the Chairman (Executive Director) is borne by CIEL Corporate Services Ltd, which holds a service contract with the

Company.

The Non-Executive and Independent Directors were paid a fixed annual fee of Rs. 100,000 as well as an attendance fee of Rs. 15,000 per

meeting during the year ended June 30, 2012.

Following the recommendation of the Corporate Governance, Nomination and Remuneration committee, it was decided that the

members of the Board committees would be remunerated as follows:

• Rs. 150,000 per year for the Chairman of the Committees and

• Rs. 100,000 per year for the other members.


Directorship of Subsidiary Companies

List of Directors of Subsidiaries as at June 30, 2012

Brijgopal Bang Aquarelle India (Private) Ltd

Dora Brochetto Cieltex SA Pty Ltd

Elvis Cateaux New Island Clothing Madagascar SA

Firdhose Coovadia Consolidated Fabrics Ltd

Sanjay Kumar

Chooromoney

Ajax Sweaters Ltd

P. Arnaud Dalais Aquarelle Clothing Ltd

Aquarelle India (Private) Ltd



Consolidated Dyeing and Fabrics Ltd


CTL Retail Ltd

De Nyon Ltd




Floreal Knowledge Centre Ltd


Floreal Manufacturing Ltd

Industrial Consultancy Services Ltd

Infoclick Consulting Co. Ltd

International Fabrics Ltd


New Island Clothing Madagascar SA


Tropic Knits Ltd

Tropic Mad SA

Jérôme De Chasteauneuf Aquarelle Clothing Ltd

Ajax Sweaters Ltd




Jérôme De Chasteauneuf (Cont’d)


(Alt Dir of Eddy Yeung Kan Ching)

CTL Retail Ltd

De Nyon Ltd








Tropic Knits Ltd

Tropic Mad SA

Antoine Delaporte Aquarelle Clothing Ltd



CTL Retail Ltd



Tropic Knits Ltd

Stéphane de Rosnay Aquarelle Madagascar SA



Tropic Mad SA

Jean-Baptiste Doger de Spéville Consolidated Dyeing and Fabrics Ltd





Tropic Knits Ltd

Tropic Mad SA

Eric Dorchies Aquarelle Clothing Ltd







J. Harold Mayer Aquarelle Clothing Ltd






CTL Retail Ltd

De Nyon Ltd




Floreal Knowledge Centre Ltd



Industrial Consultancy Services Ltd



Laguna Clothing Ltd



Tinka International Ltd


Tropic Knits Ltd

Tropic Mad SA

Bruno Monti Laguna Clothing Ltd


Paolo Monti Laguna Clothing Ltd

Manuel Monti New Island Clothing Ltd

Neera Munisamy Ajax Sweaters Ltd

Bertrand Rivalland Aquarelle Madagascar SA

Ajax Sweaters Ltd

Cieltex Pty SA


Tropic Mad SA

Eric Dorchies (Cont’d) International Fabrics Ltd

Laguna Clothing Ltd



Tinka International Ltd

Roger Espitalier Noël Aquarelle Madagascar SA



Tropic Mad SA

Sarbajit Ghose Laguna Clothing Ltd


Uday Kumar Gujadhur Consolidated Fabrics Ltd


Françoise Ip Aquarelle Madagascar SA

Ajax Sweaters Ltd


Tropic Mad SA

Rajesh Kumar Laguna Clothing Ltd

P. Jérôme Lagesse (Alternate Director of Antoine Delaporte) Aquarelle Clothing Ltd


CTL Retail Ltd



Tropic Knits Ltd

Nicolas Maigrot Ferney Spinning Mills Ltd



Vaidyanathan Pudugramam Venkata Subramanian Aquarelle India (Private) Ltd

Bertrand Thevenau Tropic Knits Ltd

Tropic Mad SA

Eddy Yeung Kan

Ching Aquarelle Clothing Ltd




CTL Retail Ltd

Eddy Yeung Kan

Ching (Cont’d) De Nyon Ltd






Tropic Knits Ltd

Pascal Walter Consolidated Fabrics Ltd

Directors’ Service Contracts

There are no service contracts between the Company and any of its Directors during the year.

Donations

Donations made during the year by the Company and its subsidiaries were as follows:

Company (Rs. ’000)

Subsidiaries (Rs. ‘000)

2012 2011 2012 2011

Political - - 283 67

Others - - 44 668

In addition to the above, CTL Group has contributed Rs. 2.8M as Corporate Social Responsibility, channelled to Fondation Nouveau

Regard (“FNR”), registered as a special purpose vehicle accredited to receive CSR contribution. CTL is one of the promoters of FNR, the

vehicle formed by the CIEL Group in 2004 to achieve its social objectives.

Contract of Significance

There were no contracts of significance subsisting during or at the end of the year in which a Director of the Company is or was

materially interested, either directly or indirectly.


External Audit Fees

External audit fees for the year were as follows:

The Company (Rs.’000)

Subsidiaries (Rs.’000)

2012 2011 2012 2011

Audit fees paid to:

PricewaterhouseCoopers 475 450 5,025 4,550

Deloitte - - - 325

Overseas auditors - - 2,547 2,268

475 450 7,572 7,143

Fees paid for other services provided by:

PricewaterhouseCoopers* 35 10 1,300 890

BDO & Co** 725 800 300 75

Overseas auditors - - 408 471

760 810 2,008 1,436

Note: Fees are exclusive of VAT

* Includes Tax computation fees and IFRS training fees for accountants of the Group

** Includes Group accounts consolidation fees

Internal Audit Fees

Audit fees paid in respect of the internal audit for the year under review was Rs. 1.35M.

On Behalf of the Board


September 26, 2012

Antoine DelaporteDirector



Statement of Directors ’ Respons ib i l i t ies

Statement of Directors’ Responsibilities in respect of the Preparation of Financial Statements

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 flows of the Company. In preparing those financial statements, the Directors are

required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• state whether International Financial Reporting Standards have been followed, subject to any material departures disclosed and

explained in the financial statements; and

• 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 Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial

position of the Company and to enable them to ensure that the financial statements comply with the Mauritian Companies Act 2001.

They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and

detection of fraud and other irregularities.

On Behalf of the Board


September 26, 2012


Company Secretary’s Cert i f icate

In our capacity as Company Secretary, we hereby confirm that, to the best of our knowledge and belief, the Company has filed with the Registrar of Companies, as at June 30, 2012, all such returns as are required of the Company under the Companies Act 2001.

Clothilde de Comarmond, ACISPer CIEL Corporate Services LimitedCompany Secretary

September 26, 2012


51

Independent Audi tor ’s ReportTo the Shareholders of CIEL Text i le L imi ted

Report on the Financial Statements

We have audited the consolidated financial statements of CIEL Textile Limited (the “Company”) and its subsidiaries (together the “Group”)

and separate financial statements of the Company on pages 53 to 114 which comprise the Group’s and the Company’s statements of

financial position at June 30, 2012 and their respective statements of income, comprehensive income, changes in equity and cash flows

for the year then ended, and a summary of significant accounting policies and other explanatory notes.

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 Mauritian Companies Act 2001, and for such

internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material

misstatement, whether due to fraud or error.

Auditor’s 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 about 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 judgement, including the assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the

entity’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 entity’s internal control. An audit also includes

evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as

well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements on pages 53 to 114 give a true and fair view of the financial position of the Group and of the

Company at June 30, 2012 and of their financial performance and cash flows for the year then ended in accordance with International

Financial Reporting Standards and comply with the Mauritian Companies Act 2001.

Report on Other Legal and Regulatory Requirements

The Mauritian Companies Act 2001 requires that in carrying out our audit we consider and report to you on the following matters.

We confirm that:

(a) we have no relationship with or interests in the Company or any of its subsidiaries other than in our capacities as auditor and tax

advisor of the Company and some of its subsidiaries;

(b) we have obtained all the information and explanations we have required; and

(c) in our opinion, proper accounting records have been kept by the Company as far as appears from our examination of those

records.


Independent Audi tor ’s Report (Cont ’d)To the Shareholders of CIEL Text i le L imi ted

Financial Reporting Act 2004

The Directors are responsible for preparing the Corporate Governance Report on pages 32 to 43 and making the disclosures required

by Section 8.4 of the Code of Corporate Governance of Mauritius (“Code”). The Financial Reporting Act 2004 requires us to report on

these disclosures, where the Directors disclose the extent of compliance with the Code.

In our opinion, the disclosures in the Corporate Governance Report are consistent with the requirements of the Code.

Other Matter

This report, including the opinion, has been prepared for and only for the Company’s shareholders, as a body, in accordance with

Section 205 of the Mauritian Companies Act 2001 and for no other purpose. We do not, in giving this opinion, accept or assume

responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where

expressly agreed by our prior consent in writing.

PricewaterhouseCoopers

Mushtaq Oosman Licensed by FRC

September 26, 2012


Statements of F inanc ia l Pos i t ionAs at June 30, 2012

THE GROUP THE COMPANYNotes 2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000ASSETSNon-current assetsProperty, plant and equipment 3 2,200,185 2,254,289 115,460 108,593 Intangible assets 4 9,416 4,463 - - Investments in:- Subsidiary companies 5 - - 1,101,861 1,101,861 - Associates 6 - - - - - Available for sale investments 7 3,477 3,243 3,477 3,243

3,477 3,243 1,105,338 1,105,104 Non-current receivables 8 12,998 7,691 - - Deferred income tax assets 9 32,628 21,132 - -

2,258,704 2,290,818 1,220,798 1,213,697 Current assetsInventories 10 2,036,376 2,214,719 - - Trade and other receivables 11 1,643,122 1,931,655 175,529 138,957 Cash in hand and at bank 241,768 198,207 9,355 7,957

3,921,266 4,344,581 184,884 146,914

Non-current assets classified as held for sale 12 22,366 22,366 - - TOTAL ASSETS 6,202,336 6,657,765 1,405,682 1,360,611

EQUITY AND LIABILITIESCapital and reservesShare capital 13 685,865 685,865 685,865 685,865 Revaluation and other reserves 654,653 636,733 121,396 113,500 Retained earnings 1,534,899 1,178,885 87,136 87,429 Owners’ interest 2,875,417 2,501,483 894,397 886,794 Non-controlling interests 177,507 153,321 - - Redeemable preference share capital 14 - 448,937 - - Total equity 3,052,924 3 ,1 0 3 , 741 894,397 886,794

Non-current liabilitiesBorrowings 15 149,852 199,826 28,000 42,000 Deferred income tax liabilities 9 175,519 148,097 18,883 15,970 Retirement benefit obligations 17 74,791 64,663 - - Employee benefit liability 18 - 9,659 - -

400,162 422,245 46,883 57,970

Current liabilitiesTrade and other payables 19 1,530,473 1,798,434 378,599 365,658 Borrowings 15 663,807 1,248,427 14,468 14,556 Redeemable preference share capital 14 404,937 - - - Current income tax liabilities 20 4 8 , 76 1 1 8 ,1 7 7 70 - Employee benefit liability 18 9,760 8 ,661 - - Dividends payable 26 9 1 , 5 1 2 58,080 71,265 35,633

2,749,250 3,131,779 464,402 415,847 Total liabilities 3 ,1 4 9 , 4 1 2 3,554,024 511,285 473,817 TOTAL EQUITY AND LIABILITIES 6,202,336 6,657,765 1,405,682 1 , 3 6 0 , 6 1 1

These financial statements have been approved for issue by the Board of Directors on September 26, 2012.

The notes on pages 59 to 114 form an integral part of these financial statements.Auditors’ report on pages 51 and 52.




Income StatementsYear Ended June 30, 2012

THE GROUP THE COMPANY

Restated Restated

Notes 2012 2011 2012 2 0 1 1

Rs’000 R s ’ 0 0 0 Rs’000 R s ’ 0 0 0

Revenue 31 8,643,183 7, 8 76 , 2 4 0 103,844 5 7,1 1 4

Cost of sales (6,865,232) ( 6 , 5 0 7, 3 6 3 ) - -

Gross profit 1,777,951 1 , 3 6 8 , 8 7 7 103,844 5 7,1 1 4

Other operating (losses)/income 21 (34,522) ( 3 0 , 5 2 8 ) 2,435 1 , 9 6 0

Fair value movement on outstanding forward

exchange contracts 17,885 9 ,1 2 5 - -

Administrative and selling expenses (1,063,003) ( 9 9 4 , 7 3 2 ) (45) ( 5 9 )

6 9 8 , 3 1 1 3 5 2 , 74 2 106,234 5 9 , 0 1 5

Finance income 5,483 4 , 3 4 2 4 , 4 1 9 7,1 1 6

Finance costs (93,115) ( 9 9 ,1 0 1 ) (6,645) ( 9 ,1 0 7 )

Net finance costs 24 (87,632) ( 9 4 , 7 5 9 ) (2,226) ( 1 , 9 9 1 )

Impairment of investment in associate 12 - ( 2 7, 2 7 1 ) - -

Share of results of associates 6 - 8 7 0 - -

Profit before taxation 610,679 2 3 1 , 5 8 2 104,008 5 7, 0 2 4

Taxation 20 (94,791) ( 1 7,1 1 5 ) (2,493) ( 6 8 5 )

Profit for the year 515,888 2 1 4 , 4 6 7 101,515 56,339

2012 2011

Rs'000 Rs'000

Profit attributable to :

Owners of the company 476,269 210,465

Non-controlling interests 3 9 , 6 1 9 4,002

515,888 214,467

Basic and diluted earnings per share 25 Rs. 4.50 1.86



Statements of Comprehens ive Income Year Ended June 30, 2012

THE GROUP THE COMPANY

2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000

Profit for the year 515,888 214,467 101,515 56,339

Other comprehensive income

Revaluation surplus (Note 16) 56,261 10,406 9,513 -

Deferred tax on revaluation reserve (Note 9(a)) (5,299) (4,285) (1,617) -

Movement on reserves of associates - 1,600 - -

Translation differences on foreign subsidiaries (33,565) (61,503) - -

Other comprehensive income/(loss) for the year 17,397 (53,782) 7,896 -

Total comprehensive income for the year 533,285 160,685 109,411 56,339

Total comprehensive income attributable to:

Owners of the company 494,189 169,384

Non-controlling interests 39,096 (8,698)

533,285 160,685



THE GROUP (Attributable to the Owners of the Company)

NotesStated

Capital

Capital Redemption

ReserveRevaluation

SurplusGeneral Reserve

Retained Earnings

Translation of Foreign

Operations Sub-Total

Non-Controlling

Interests

Redeemable Preference

Share Capital Total Equity

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

At June 30, 2012

At July 1, 2011 685,865 75,000 556,638 1,505 1,178,885 3,590 2,501,483 153,321 448,937 3,103,741

Issue of shares to non-controlling interests - - - - - - - 2 - 2

Profit for the year - - - - 476,269 - 476,269 39,619 - 515,888

Other comprehensive income - - 44,414 - - (26,494) 17,920 (523) - 17,397

Redemption of redeemable preference shares - - - - - - - - (44,000) (44,000)

Reclassified to current liabilities - - - - - - - - (404,937) (404,937)

Preference dividends - - - - (18,447) (18,447) (3,999) - (22,446)

Transactions with owners

Ordinary dividends 26 - - - - (101,808) - (101,808) (10,913) - (112,721)

At June 30, 2012 685,865 75,000 601,052 1,505 1,534,899 (22,904) 2,875,417 177,507 - 3,052,924

At June 30, 2011

At July 1, 2010 685,865 75,000 548,807 1,505 1,084,597 56,505 2,452,279 186,103 448,937 3,087,319

Acquisition of non-controlling interests - - - - (39,185) - (39,185) (36,637) - (75,822)

Issue of shares to non-controlling interests - - - - - - - 10,000 - 10,000

Profit for the year - - - - 210,465 - 210,465 4,002 - 214,467

Other comprehensive income - - 7,831 - (52,915) (45,084) (8,698) - (53,782)

Preference dividends - - - - (20,998) - (20,998) (1,449) - (22,447)

Ordinary dividends 26 - - - - (55,994) - (55,994) - - (55,994)

At June 30, 2011 685,865 75,000 556,638 1,505 1,178,885 3,590 2,501,483 153,321 448,937 3,103,741


Statements of Comprehens ive Income Year Ended June 30, 2012


Statements of Changes in Equ i tyYear Ended June 30, 2012

THE COMPANY

Notes

Stated Capital

Revaluation Surplus

Retained Earnings Total

Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 2011 685,865 113,500 87,429 886,794

Profit for the year - - 101,515 101,515

Other comprehensive income - 7,896 - 7,896

Transactions with owners:

Ordinary dividends 26 - - (101,808) (101,808)

At June 30, 2012 685,865 121,396 87,136 894,397

At July 1, 2010 685,865 113,500 87,084 886,449

Profit for the year - - 56,339 56,339

Transactions with owners:

Ordinary dividends 26 - - (55,994) (55,994)

At June 30, 2011 685,865 113,500 87,429 886,794



Statements of Cash F lowsYear Ended June 30, 2012

THE GROUP THE COMPANY Notes 2012 2011 2012 2011

Rs’000 R s ’ 0 0 0 Rs’000 R s ’ 0 0 0

OPERATING ACTIVITIES

Cash generated from operations 27(a) 1,134,703 ( 1 8 5 ,1 5 9 ) 85,248 7 1 ,1 7 9

Interest received 5,483 4 , 3 4 2 4,419 7,1 1 6

Tax paid (44,155) ( 1 8 , 6 3 1 ) (1,127) ( 1 , 41 2 )

Interest paid (93,115) ( 9 9 ,1 0 1 ) (6,645) ( 9 ,1 0 7 )

Net cash generated from/(used in) operating activities 1,002,916 (298,549) 81,895 6 7, 7 76

INVESTING ACTIVITIES

Purchase of property, plant and equipment 3 (125,631) (169,713) - -

Purchase of intangible assets 4 (5,471) (1 ,851) - -

Purchase of available for sale investments (234) - (234) -

Net movement in non-current receivables (5,307) (6,244) - -

Proceeds from disposal of property, plant and equipment 6,444 32,026 - -

Proceeds from disposal of investments - - - -

Net cash used in investing activities (130,199) (145,782) (234) -

FINANCING ACTIVITIES

Net movement in bank and import loans (26,085) 34,330 - -

Net movement on finance leases (16,134) (14,916) - -

Net movement in debentures (14,000) (14,000) (14,000) (14,000)

Redemption of Redeemable preference shares (44,000) - - -

Net movement in loans from related companies - - 5 75

Ordinary Dividends paid to owners of the parent (66,177) (45,813) (66,175) (45,813)

Ordinary Dividends paid to non controlling interest (10,913) - - -

Issue of shares to non controlling interest 2 10,000 - -

Acquisition of non controlling interest 28 - (75,822) - -

Preference dividends paid to Executive Directors (1,333) (1,425) - -

Preference dividends paid to financial institutions (24,647) (22,447) - -

Net cash used in financing activities (203,287) (130,093) (80,170) (59,738)

Net increase/(decrease) in cash and cash equivalents 669,430 (574,424) 1,491 8,038

Exchange difference (7,141) 10,920 -

At July 1, (741,125) (177,621) 7,478 (560)

At June 30, 27(b) (78,836) (741 ,125) 8,969 7,478



Notes to the F inanc ia l Statements June 30, 2012

1. CORPORATE INFORMATION

CIEL Textile Limited is a public Company incorporated and domiciled in Mauritius. It is quoted on the Development and Enterprise Market

(DEM). Its registered office is situated on the 5th Floor Ebène Skies, Rue de l’Institut, Ebène.

The main activity of the Company is that of investment holding while the Group is engaged in the manufacture of knitted and woven

garments.

2. ACCOUNTING POLICIES

• Basis of Preparation

The financial statements have been prepared on a historical cost basis as modified by the fair revaluation of land and buildings and

available-for-sale investments. The financial statements are presented in thousand rupees except where otherwise indicated. Where

necessary, comparative figures have been regrouped and/or restated to conform to the current year’s presentation.

Statement of Compliance

The financial statements of CIEL Textile Limited have been prepared in accordance with International Financial Reporting Standards

(IFRSs) and comply with the Companies Act 2001.

• Changes in Accounting Policy and Disclosures

(a) New and amended standards adopted by the Group

The following new standards and amendments to standards are mandatory for the first time for the financial year beginning July 1, 2011.

The amendment to IAS 1, ‘Presentation of financial statements’ is part of the 2010 Annual Improvements and clarifies that an entity

shall present an analysis of other comprehensive income for each component of equity, either in the statement of changes in equity

or in the notes to the financial statements. This amendment has no impact on the Company’s financial statements.

• The amendment to IAS 24, ‘Related party disclosures’ clarifies and simplifies the definition of a related party and removes the

requirement for government-related entities to disclose details of all transactions with the government and other government-

related entities. The amended definition means that some entities will be required to make additional disclosures, e.g., an entity that

is controlled by an individual that is part of the key management personnel of another entity is now required to disclose transactions

with that second entity. This amendment has little impact on the Company’s financial statements.

• The amendments to IFRS 7, ‘Financial Instruments - Disclosures’ are part of the 2010 Annual Improvements and emphasises the

interaction between quantitative and qualitative disclosures about the nature and extent of risks associated with financial instruments.

The amendment has also removed the requirement to disclose the following;

• Maximum exposure to credit risk if the carrying amount best represents the maximum exposure to credit risk;

• Fair value of collaterals; and

• Renegotiated assets that would otherwise be past due but not impaired.

This amendment has little impact on the Company’s financial statements.



2 . ACCOUNTING POLICIES (CONTINUED)

Other amendments and interpretations to standards became mandatory for the year beginning July 1, 2011 but had no significant effect

on the Company’s financial statements.

(b) Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the

Group

NUMEROUS NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS TO ExISTING STANDARDS HAVE BEEN ISSUED BUT ARE

NOT YET EFFECTIVE. BELOW IS THE LIST OF NEW STANDARDS THAT ARE LIKELY TO BE RELEVANT TO THE GROUP. HOWEVER, THE

DIRECTORS ARE YET TO ASSESS THE IMPACT ON THE GROUP’S OPERATIONS.

• Amendment to IFRS 7, Financial Instruments: Disclosures – Asset and Liability offsetting, The IASB has published an amendment to

IFRS 7, ‘Financial instruments: Disclosures’, reflecting the joint requirements with the FASB to enhance current offsetting disclosures.

These new disclosures are intended to facilitate comparison between those entities that prepare IFRS financial statements to those

that prepare financial statements in accordance with US GAAP. The effective date for this amendment is January 01, 2013.

• Amendments to IAS 1, ‘Presentation of Financial Statements’, on presentation of items of OCI. The IASB has issued an amendment to

IAS 1, ‘Presentation of financial statements’. The main change resulting from these amendments is a requirement for entities to group

items presented in other comprehensive income (OCI) on the basis of whether they are potentially reclassifiable to profit or loss

subsequently (reclassification adjustments). The amendments do not address which items are presented in OCI. The effective date

for these amendments is January 01, 2013.

• IAS 19, “Employee benefits”. The IASB has issued an amendment to IAS 19, ‘Employee benefits’, which makes significant changes

to the recognition and measurement of defined benefit pension expense and termination benefits, and to the disclosures for all

employee benefits. The effective date for this amendment is January 01, 2013.

• IFRS 9 – Financial Instruments (2009). This IFRS is part of the IASB’s project to replace IAS 39. IFRS 9 addresses classification and

measurement of financial assets and replaces the multiple classification and measurement models in IAS 39 with a single model that

has only two classification categories: amortised cost and fair value. The effective date for this standard is January 01, 2015.

• IFRS 9 – Financial Instruments (2010). The IASB has updated IFRS 9, ‘Financial instruments’ to include guidance on financial liabilities

and derecognition of financial instruments. The accounting and presentation for financial liabilities and for derecognising financial

instruments has been relocated from IAS 39, ‘Financial instruments: Recognition and measurement’, without change, except for

financial liabilities that are designated at fair value through profit or loss. The effective date for this standard is January 01, 2015.

• Amendments to IFRS 9 – Financial Instruments (2011). The IASB has published an amendment to IFRS 9, ‘Financial instruments’,

that delays the effective date to annual periods beginning on or after 1 January 2015. The original effective date was for annual

periods beginning on or after from January 01, 2013. This amendment is a result of the board extending its timeline for completing

the remaining phases of its project to replace IAS 39 (for example, impairment and hedge accounting) beyond June 2011, as well as

the delay in the insurance project. The amendment confirms the importance of allowing entities to apply the requirements of all the

phases of the project to replace IAS 39 at the same time. The requirement to restate comparatives and the disclosures required on

transition have also been modified.


2 ACCOUNTING POLICIES (CONTINUED)

• IFRS 10 – Consolidated financial statements. This standard builds on existing principles by identifying the concept of control as

the determining factor in whether an entity should be included within the consolidated financial statements. The standard provides

additional guidance to assist in determining control where this is difficult to assess. This new standard might impact the entities that a

group consolidates as its subsidiaries. The standard is effective on January 01, 2013.

• IFRS 11 – Joint arrangements. This standard provides for a more realistic reflection of joint arrangements by focusing on the rights

and obligations of the arrangement, rather than its legal form. There are two types of joint arrangements: joint operations and joint

ventures. Joint operations arise where a joint operator has rights to the assets and obligations relating to the arrangement and hence

accounts for its interest in assets, liabilities, revenue and expenses. Joint ventures arise where the joint operator has rights to the net

assets of the arrangement and hence equity accounts for its interest. Proportional consolidation of joint ventures is no longer allowed.

The standard is effective on January 01, 2013.

• IFRS 12 – Disclosures of interests in other entities. This standard includes the disclosure requirements for all forms of interests in other

entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. The standard is

effective on January 01, 2013.

• IFRS 13 – Fair value measurement. This standard aims to improve consistency and reduce complexity by providing a precise definition

of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements,

which are largely aligned between IFRSs and US GAAP, do not extend the use of fair value accounting but provide guidance on how

it should be applied where its use is already required or permitted by other standards within IFRSs or US GAAP. The standard is


• IAS 27 (revised 2011) – Separate financial statements. This standard includes the provisions on separate financial statements that

are left after the control provisions of IAS 27 have been included in the new IFRS 10. The revised standard is applicable effective

January 01, 2013.

• IAS 28 (revised 2011) – Associates and joint ventures. This standard includes the requirements for joint ventures, as well as associates,

to be equity accounted following the issue of IFRS 11. The revised standard is applicable effective January 01, 2013.

• Amendment to the transition requirements in IFRS 10, ‘Consolidated financial statements’, IFRS 11, ‘Joint Arrangements’, and IFRS 12,

‘Disclosure of interests in other entities’. The amendment clarifies that the date of initial application is the first day of the annual period

in which IFRS 10 is adopted − for example, January 01, 2013 for a calendar-year entity that adopts IFRS 10 in 2013. Entities adopting

IFRS 10 should assess control at the date of initial application; the treatment of comparative figures depends on this assessment. The

amendment is effective on January 01, 2013.

• Amendments to IAS 32 – Financial Instruments: Presentation. The IASB has issued amendments to the application guidance in IAS 32,

‘Financial instruments: Presentation’, that clarify some of the requirements for offsetting financial assets and financial liabilities on the

balance sheet. However, the clarified offsetting requirements for amounts presented in the statement of financial position continue to

be different from US GAAP. The amendments are effective on January 01, 2014.




The following relates to amendments that form part of the 2012 annual improvements process by the IASB:

• The amendment to IAS 1, ‘Presentation of financial statements’ clarifies the disclosure requirements for comparative information

when an entity provides a third balance sheet either: as required by IAS 8, ‘Accounting policies, changes in accounting estimates and

errors’; or voluntarily. The improvement is effective on January 01, 2013.

• The amendment to IAS 16, ‘Property, plant and equipment’ clarifies that spare parts and servicing equipment are classified as property,

plant and equipment rather than inventory when they meet the definition of property, plant and equipment. The improvement is


• The amendment to IAS 32, ‘Financial instruments: Presentation’ clarifies clarifies the treatment of income tax relating to distributions

and transaction costs. The amendment clarifies that the treatment is in accordance with IAS 12. So, income tax related to

distributions is recognised in the income statement, and income tax related to the costs of equity transactions is recognised in equity.

The improvement is effective on January 01, 2013.

Significant Accounting Judgements and Estimates

Judgments

In the process of applying the Group’s accounting policies, the Directors have made the following judgements, apart from those involving

estimations, which have the most significant effect on the amounts recognised in the financial statements:

Operating Lease Commitments - Group as Lessee

The entity’s subsidiaries have entered into leases for motor vehicles and computer equipment. The directors have considered the terms

and conditions of the lease agreements and determined that the Group does not retain all the significant risks and rewards of ownership

of these assets, and therefore, such lease agreements have been recorded as operating leases, rather than finance leases.

Consolidation of New Island Clothing Limited, Laguna Clothing Ltd and Azzurri Company Ltd

New Island Clothing Limited, Laguna Clothing Ltd and Azzurri Company Ltd have been consolidated in the Group’s financial statements,

albeit holdings of 50% in each respective company, as the power to govern the financial and operating policies of each of those

subsidiaries remains with the Group, under an agreement.

Estimates and Assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, that

have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are

discussed below.

Deferred tax assets

Deferred tax assets are recognised for al l unused tax losses and unused tax credits to the extent that it is probable that taxable

profit wil l be available against which the losses can be uti l ised. Significant management judgement is required to determine the

amount of deferred tax assets that can be recognised, based upon the l ikely t iming and level of future taxable profits together

with future tax planning strategies.



Significant Accounting Judgements and Estimates (continued)

Pension benefits

The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a number

of assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate. Any changes in these

assumptions will impact the carrying amount of pension obligations.

The subsidiaries in their respective countries of operations determine their appropriate discount rates at the end of each year. This is the

interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the

pension obligations. In determining the appropriate discount rate, the Company considers the interest rates to high-quality government

bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms

of the related pension obligation.

Other key assumptions for pension obligations are based in part on current market conditions.

Revaluation of property

Property is measured at revalued amounts with changes in fair value being recognised in other comprehensive income. The Group

engaged independent valuation specialists to determine fair value as at June 30, 2012.

Provision for slow-moving inventories

Management is required to exercise significant judgement in estimating the provision for slow-moving inventories.

The following are considered to provide for inventories write-off:

• Apply appropriate procedures to identify slow-moving and obsolete stocks;

• Make reasonable and prudent estimates of the prices obtainable in the market in which the goods are expected to be sold at the

time at which they will be available for sale; and

• Take into account projected time to completion and sale (for example, repair costs for damaged stocks and sales commission).

Depreciation and amortisation rates

The Company depreciates or amortises its assets over their estimated useful lives. The estimation of useful lives is based on historical

performance and expectation about future use and requires significant degree of judgement.



Summary of Significant Accounting Policies

(a) Segment Reporting

Segment information presented relate to operating segments that engage in business activities for which revenues are earned and

expenses incurred.

The Chief Operating Officer (CEO) of the different clusters of the Group (Fine Knits, Knitwear, Woven and Retail) are the Chief Operating

Decision Makers. Management has determined the operating segments based on the information reviewed by the above CEOs for the

purposes of allocating resources and assessing performance.

The CEOs consider the business from both a geographic and product perspective. Geographically, management considers the

performance in Mauritius, Madagascar, Asia and South Africa. From a product perspective, management separately considers the

activities in the Fine Knits, Knitwear, Woven and Retail clusters. The CEOs assess performance of the operating segments based on

revenue and profit metrics.

(b) Foreign Currencies

Functional Currency and Presentation Currency

The companies in the Group prepare their financial reports in the currency used in the primary economic environment in which

they operate which is known as the functional currency. These reports provide the basis for the consolidated financial statements.

The consolidated financial statements are presented in Mauritian Rupees being the Parent Company’s functional currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions

or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from

the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the

income statement.

Foreign exchange gains and losses are presented in the income statement within ‘Other operating (losses)/income’. The fair value

movement on outstanding forward exchange contracts have been presented on the face of the income statement. Realised differences

arising on forward exchange contracts during the year are included within ‘Other operating (losses)/income’.

Changes in the fair value of monetary securities denominated in foreign currency classified as available for sale are analysed between

translation differences resulting from changes in the amortised cost of the security and other changes in the carrying amount of the

security. Translation differences related to changes in amortised cost are recognised in profit or loss and other changes in carrying

amount are recognised in other comprehensive income. Translation differences on non-monetary financial assets and liabilities such as

equities held at fair value through profit or loss are recognised in income statement as part of the fair value gain or loss.




(b) Foreign Currencies (continued)

Transactions and balances (continued)

Translation differences on non-monetary financial assets such as equities classified as available for sale are included in the fair value

reserve in other comprehensive income.

The statements of financial position and income statements for all foreign operations (none of which has the currency of a hyperinflationary

economy) whose functional currency is not the presentation currency are translated into the presentation currency using the following

procedures:

• assets and liabilities for each reporting period presented are translated at the closing rate at the date of that statement of financial

position;

• income and expenses for each income statement presented are translated at the average exchange rate for the respective year,

unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which

case income and expenses are translated at the rate on the dates of the transactions;

• equity items are translated at closing rate; and

• all exchange differences that arise are reported in other comprehensive income.

Translation of foreign operations

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity

and translated at the closing rate.

(c) Property, Plant and Equipment

All property, plant and equipment are initially recorded at cost. Except for land and buildings, which has been revalued, plant and

equipment are stated at historical cost, excluding the costs of day-to-day servicing, less accumulated depreciation and accumulated

impairment value. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the assets’ carrying amount or recognised as a separate asset as appropriate, only when it is probable

that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The

carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the profit or loss during the

financial period in which they are incurred.

Increases in the carrying amount arising on revaluation are credited to other comprehensive income and shown as revaluation surplus in

shareholders’ equity. Decreases that offset previous increases of the same asset are charged against the revaluation surplus directly in

equity; all other decreases are charged to the income statement. Any accumulated depreciation at the date of revaluation is eliminated

against the gross carrying amount of the asset and the net amount restated to the revaluated amount of the asset.

The land and buildings are revalued by an independent Land Surveyor every three years.




(c) Property, Plant and Equipment (continued)

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

that the carrying value may not be recoverable.

Gains and losses on disposal of property, plant and equipment are determined by reference to their carrying amount and are included

in the income statement. On disposal of revalued assets, amounts in revaluation and other reserves relating to that asset are transferred

to retained earnings.

Land is not depreciated. Depreciation on other assets is calculated on the straight-line method to write off the cost of assets, or the

revalued amounts, to their residual values over their estimated useful life as follows:

Buildings - 2 % p.a

Buildings on leasehold land - 2 % p.a

Plant and machinery - 10% - 20% p.a

Motor vehicles - 20% p.a

Furniture and equipment - 5% - 20% p.a

Computer equipment - 20% p.a

Other items - 10% - 20% p.a

The assets’ residual values and useful lives are reviewed and adjusted if appropriate, at the end of each reporting period.

(d) Investments in Subsidiaries

Separate financial statements of the Company

In the separate financial statements of the Company, investments in subsidiary companies are carried at cost. The carrying amount is

reduced to recognise any impairment in the value of individual investments.

Consolidated financial statements

Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and operating

policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting

rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries

are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control

ceases.

The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred for the

acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group.

The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement.

Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a

business combination are measured initially at their fair values at the acquisition date.



(d) Investments in Subsidiaries (continued)

Consolidated financial statements (continued)

On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the

non-controlling interest’s proportionate share of the acquiree’s net assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value

of any previous equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets acquired is recorded

as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference

is recognised directly in income statement.

Inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated. Profits and

losses resulting from inter-company transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries

have been changed where necessary to ensure consistency with the policies adopted by the Group.

Transactions and non-controlling interests

The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from non-

controlling interests the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of

the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interest are also recorded in equity.

Laguna Clothing Ltd and Aquarelle India Private Limited have been consolidated for a period of fifteen months up to June 30, 2012 to be

coterminous with the Group’s accounting year-end. The impact of the 3 months’ consolidated figures is not considered material.

(e) Investments inAssociates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of

between 20% and 50% of the voting rights.

Separate financial statements of the Company

Investments in associates are carried at cost. The carrying amounts are reduced to recognise any impairment in the value of individual

investments. The impairment loss is taken to income statement.

Consolidated financial statements

The Group’s investments in associated companies are accounted for using the equity method of accounting. The investment in associate

is thus carried in the statement of financial position at cost plus post-acquisition changes in the Group’s share of net assets of the

associated companies, less any impairment loss. Goodwill relating to an associate is included in the carrying amount of the investment

and is not amortised.




(e) Investments in Associates (continued)

Consolidated financial statements (continued)

The income statement reflects the share of the results of operations of the associates. Where there has been a change recognised

directly in the equity of the associates, the Group recognises its share of any changes and discloses this, when applicable, in the statement

of changes in equity.

When the Group’s share of losses exceeds the carrying amount of the investment, the investment is reported at nil value and recognition

is discontinued except to the extent of the Group’s commitment on behalf of the associated company.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the

associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

Dilution gains and losses arising in investments in associates are recognised in income statement.

(f) Impairment of Non-Financial Assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists,

or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s

recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use and is determined

for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups

of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down

to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax

discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses of

continuing operations are recognised in the income statement in those expense categories consistent with the function of the impaired

asset.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses

may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised

impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the

last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That

increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss

been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in

which case the reversal is treated as a revaluation increase.

After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any

residual value, on a systematic basis over its remaining useful life.



(g) Intangible Assets

Goodwill

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

the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following initial recognition, goodwill

is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment, annually or more frequently if events

or changes in circumstances indicate that the carrying value may be impaired.

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

Group’s cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination,

irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units. Each unit or group of units

to which the goodwill is so allocated:

• represents the lowest level within the Group at which the goodwill is monitored for internal management purposes; and

• is not larger than an operating segment in accordance with IFRS 8 Operating Segments.

Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cash-generating units), to which

the goodwill relates. Where the recoverable amount of the cash-generating unit (group of cash-generating units) is less than the carrying

amount, an impairment loss is recognised.

Where goodwill forms part of a cash-generating unit (group of cash-generating units) and part of the operation within that unit is disposed

of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain

or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation

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

Negative goodwill on a bargain purchase represents the excess of the acquirer’s interest in the fair values of the identifiable net assets

and liabilities acquired over the cost of acquisition. It is recognised immediately as gain from bargain purchase in the income statement.

Negative goodwill arising from the acquisition of an associated company is excluded from the carrying amount of the investment and

is included as income in the determination of the Group’s share of associate’s profit or loss in the period the investment was acquired.

Other intangible assets

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

combination is fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any

accumulated amortisation and any accumulated impairment losses.

Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is charged against

profits in the year in which the expenditure is incurred. The useful lives of intangible assets are assessed to be either finite or indefinite.

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

that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite

useful life are reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption

of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate,

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

in the expense category consistent with the function of the intangible asset. The estimated useful life of computer software is 3-5 years.




(g) Intangible Assets (continued)

Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash-generating unit level.

Such intangibles are not amortised. The useful life of an intangible asset with an indefinite life is reviewed annually to determine whether

indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is made on

a prospective basis.

(h) Other Investments and other Financial Assets

Financial assets in the scope of IAS 39 are classified as either financial assets at fair value through profit or loss, loans and receivables,

held-to-maturity investments, or available-for-sale financial assets, as appropriate. When financial assets are recognised initially,

they are measured at fair value, plus, in the case of investments not measured at fair value through profit or loss, directly attributable

transaction costs. The Group determines the classification of its financial assets at initial recognition and, where allowed and appropriate,

re-evaluates this designation at each financial year-end.

All regular purchases and sales of financial assets are recognised on the trade date i.e. the date that the Group commits to purchase

the asset. Regular purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally

established by regulation or convention in the marketplace.

The Group and the Company hold the following financial assets:

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial benefits held for trading. A financial asset is classified in this category if

acquired principally for the purpose of selling in the short term. Assets in this category are classified as current assets if expected to be

settled within 12 months; otherwise, they are classified as non-current. Derivatives are also categorised as held for trading unless they

are designated as hedges.

Derivatives are initially recognised at fair value on the date a derivative is entered into and are subsequently re-measured at their fair

value. All derivatives are carried in current assets when amounts are receivable by the Company and in current liabilities when amounts

are payable by the Company.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.

Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in income when the loans

and receivables are derecognised or impaired, as well as through the amortisation process. Loans and receivables comprise of non-

current receivables and trade and other receivables in the statement of financial position.

Available-for-sale financial assets

Available-for-sale financial assets are those non-derivative financial assets that are designated as available-for-sale or are not loans

and receivables, held-to-maturity investments or investments held at fair value through profit or loss.



(h) Other Investments and other Financial Assets (continued)

Available-for-sale financial assets (continued)

After initial recognition, available-for-sale financial assets are measured at fair value with gains or losses being recognised in other

comprehensive income until the investment is derecognised or until the investment is determined to be impaired at which time the

cumulative gain or loss previously reported in equity is included in profit or loss.

The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid

prices at the close of business on the statement of financial position. For investments where there is no active market, fair value is

determined using valuation techniques. Such techniques include using recent arm’s length market transactions; reference to the current

market value of another instrument, which is substantially the same; discounted cash flow analysis and option pricing models.

(i)Trade and other Receivables

Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If

collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets.

If not, they are presented as non-current assets.

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method,

less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the

Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of

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

than 60 - 90 days overdue) are considered indicators that the trade receivable is impaired. The amount of the provision is the difference

between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest

rate.

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

recognised in the income statement within selling and marketing costs. When a trade receivable is uncollectible, it is written off against

the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against selling and

marketing costs in the income statement.

(j) Interest-Bearing Loans, Debentures and Borrowings

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

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest

method.

Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the amortisation process.



(k) Cash and Cash Equivalents

Cash and short-term deposits in the statement of financial position comprise cash at banks and in hand and short-term deposits with an

original maturity of three months or less. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial

position.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of

outstanding bank overdrafts.

(l) Redeemable Share Capital

(1) Preference shares

The redeemable preference shares in subsidiaries are not transferable, carry no voting rights and are redeemable at subscription price

at the option of the Company. In the prior years, as the Group did not have any obligation to deliver cash or another financial asset

to another entity in respect of the redeemable preference shares, the instrument evidenced characteristics of equity. However, the

redeemable preference shares did not entitle any control over the net assets of the respective subsidiaries and belong to shareholders

outside the Group. They were thus carried at cost and were disclosed separately from equity holders of the parent. At 30 June 2012,

the preference shares have been classified as current liabilities as the Board has approved redemption of the preference shares within

the next financial year.

(2) Redeemable B and C shares

The component of the non-cumulative redeemable shares that exhibits characteristics of a liability is recognised as a liability in the

statement of financial position, net of transaction costs.

The redeemable shares also give rise to benefits in respect of future dividends payable. These dividends are classified within

administrative expenses.

(m) Derecognition of Financial Assets and Liabilities

Financial assets

A financial asset (or, where applicable a part of a financial asset or part of a Group of similar financial assets) is derecognised where:

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

• the Company or the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full

without material delay to a third party under a ‘pass-through’ arrangement; or

• the Company or the Group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially

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

has transferred control of the asset.




(m) Derecognition of Financial Assets and Liabilities (continued)

Financial assets (continued)

Where the Company or the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained

substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the

Company or the Group’s continuing involvement

in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original

carrying amount of the asset and the maximum amount of consideration that the Company or the Group could be required to repay

Where continuing involvement takes the form of a written and/or purchased option (including a cash-settled option or similar provision)

on the transferred asset, the extent of the Group’s continuing involvement is the amount of the transferred asset that the Group may

repurchase, except that in the case of a written put option (including a cash-settled option or similar provision) on an asset measured at

fair value, the extent of the Group’s continuing involvement is limited to the lower of the fair value of the transferred asset and the option

exercise price.

Financial liabilities

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

Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an

existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the

recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

(n) Impairment of Financial Assets

The Group assesses at the end of each reporting period whether a financial asset or group of financial assets is impaired.

Assets carried at amortised cost

If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred, the amount

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

(excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate (i.e. the

effective interest rate computed at initial recognition). The carrying amount of the asset shall be reduced through use of an allowance for

credit losses account. The amount of the loss shall be recognised in profit or loss.

The Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant,

and individually or collectively for financial assets that are not individually significant. If it is determined that no objective evidence of

impairment exists for an individually assessed financial asset, whether significant or not, the asset is included in a group of financial

assets with similar credit risk characteristics and that group of financial assets is collectively assessed for impairment. Assets that are

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

assessment of impairment.




(n) Impairment of Financial Assets (Continued)

Assets carried at amortised cost (continued)

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring

after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment

loss is recognised in the income statement, to the extent that the carrying value of the asset does not exceed its amortised cost at the

reversal date.

Assets carried at cost

If there is objective evidence that an impairment loss exists on an unquoted equity instrument that is not carried at fair value and its fair

value cannot be reliably measured, or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity

instrument has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present

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

Available-for-sale financial assets

If an available-for-sale asset is impaired, an amount comprising the difference between its carrying amount and its current fair value, less

any impairment loss previously recognised in profit or loss, is reclassified from equity to the income statement. Reversals in respect of

equity instruments classified as available-for-sale are not recognised in profit or loss. Reversals of impairment losses on debt instruments

are reversed through profit or loss, if the increase in fair value of the instrument can be objectively related to an event occurring after the

impairment loss was recognised in profit or loss.

(o) Inventories

Inventories are valued at the lower of cost and net realisable value. Cost is determined using the first in, first out (FIFO) method.

Costs incurred in bringing each product to its present location and condition are accounted for as follows:

Raw materials — purchase cost on a weighted average cost basis;

Finished goods and work in progress — cost of direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated

costs necessary to make the sale.

(p) Provisions

Provisions are recognised when the Group or Company has a present obligation (legal or constructive) as a result of a past event, it is

probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate

can be made of the amount of the obligation. Where the Group or Company expects some or all of a provision to be reimbursed, for

example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually

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

value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the

liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.



(q) Derivative Financial Instruments

Derivatives are initially recognised at fair value on the date a derivative is entered into and are subsequently re-measured at their fair

value. All derivatives are carried in current assets when amounts are receivable by the Company and in current liabilities when amounts

are payable by the Company.

(r) Retirement Benefit Obligations

Depending on the company of the Group to which they provide services to some key members of the management are either on a

defined contribution plan or a defined benefit plan.

Defined benefits scheme

Except for two companies of the Group, all the key employees of the rest of the Group are under a defined benefit scheme. There are

two types of benefits under the plan for which one is funded and the other unfunded.

The cost of providing benefits under the defined benefit plan is determined using the projected unit credit actuarial valuation method.

Actuarial gains and losses are recognised as income or expense when the net cumulative unrecognised actuarial gains and losses at

the end of the previous reporting year exceeded 10% of the higher of the defined benefit obligation and the fair value of plan assets at

that date. These gains or losses are recognised over the expected average remaining working lives of the employees participating in

the plans.

The past service cost is recognised as an expense on a straight-line basis over the average period until the benefits become vested. If

the benefits are already vested immediately following the introduction of, or changes to, a pension plan, past service cost is recognised

immediately.

The defined benefit liability is the aggregate of the present value of the defined benefit obligation and actuarial gains and losses not

recognised reduced by past service cost not yet recognised and the fair value of plan assets out of which the obligations are to be settled

directly. If such aggregate is negative, the asset is measured at the lower of such aggregate or the aggregate of cumulative unrecognised

net actuarial losses and past service cost and the present value of any economic benefits available in the form of refunds from the plan

or reductions in the future contributions to the plan.

If the asset is measured at the aggregate of cumulative unrecognised net actuarial losses and past service cost and the present value of

any economic benefits available in the form of refunds from the plan or reductions in the future contributions to the plan, net actuarial

losses of the current period and past service cost of the current period are recognised immediately to the extent that they exceed any

reduction in the present value of those economic benefits. If there is no change or an increase in the present value of the economic

benefits, the entire net actuarial losses of the current period and past service cost of the current period are recognised immediately.




(r) Retirement Benefit Obligations (continued)

Defined benefits scheme (continued)

Similarly, net actuarial gains of the current period after the deduction of past service cost of the current period exceeding any increase

in the present value of the economic benefits stated above are recognised immediately if the asset is measured at the aggregate of

cumulative unrecognised net actuarial losses and past service cost and the present value of any economic benefits available in the form

of refunds from the plan or reductions in the future contributions to the plan. If there is no change or a decrease in the present value of

the economic benefits, the entire net actuarial gains of the current period after the deduction of past service cost of the current period

are recognised immediately.

Defined contributions scheme

Two companies of the group operate a defined contribution plan and have no further payment obligations once the contributions have

been paid. Payments to defined contribution retirement plans are charged as an expense as they fall due. Prepaid contributions are

recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

Other retirement benefits

Some retired employees are paid benefits directly by the Group’s subsidiaries. The entitlement to these benefits is usually conditional on

the employee remaining in service up to retirement age and the completion of a minimum service period. The expected costs of these

benefits are accrued over the period of employment using the same accounting methodology as used for defined benefit pension plans.

These obligations are valued annually by independent qualified actuaries.

Termination benefits

Termination benefits are payable when employment is terminated by the Group or Company before the normal retirement date, or

whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group or Company recognises termination

benefits when it is demonstrably committed to either: terminating the employment of current employees according to a detailed formal

plan without possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy.

Benefits falling due more than 12 months after the end of the reporting date are discounted to their present value.

Share-based Payment Transactions

Some senior executives of the Group receive remuneration in the form of share-based payment transactions which are “cash-settled

transactions”. The liability is initially measured at fair value and is expensed over the period until vesting. At each reporting date until

settlement date, the liability is remeasured and changes in fair value are recognised in profit or loss.

(s) Taxes

Current tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid

to the taxation authorities.



(s) Taxes (continued)

Deferred tax

Deferred income tax is provided using the liability method on temporary differences at the end of the reporting date between the tax

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

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

• where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a

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

• in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where

the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not

reverse in the foreseeable future.

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

losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the

carry-forward of unused tax credits and unused tax losses can be utilised except:

• where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or

liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor

taxable profit or loss; and

• in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures,

deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable

future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the extent that it

is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at the end of each reporting period and are recognised to the extent that it

has become probable that future taxable profit will allow the deferred tax asset to be recovered.

The principal temporary differences arise from depreciation on property, plant and equipment, revaluations of certain non-current

assets, tax losses carried forward and on retirement benefit obligations.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised

or the liability is settled.

Income tax relating to items recognised in other comprehensive income or directly in equity is recognised in other comprehensive income

or directly in equity, respectively.

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

tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.




Value Added Tax

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

• where the value added tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case

the value added tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

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

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

or payables in the statement of financial position.

(t) Finance Lease

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

an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and whether the

arrangement conveys a right to use the asset.

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are

capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease

payments.

Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of

interest on the remaining balance of the liability. Finance charges are charged directly against income.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no

reasonable certainty that the Group will obtain ownership by the end of the lease term.

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

(u) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are capitalised until such time as

the assets are substantially ready for their intended use or sale.

Other borrowing costs are expensed.

(v) Trade Payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.

Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the

business if longer). If not, they are presented as non-current liabilities.

Trade payables are stated at fair value and subsequently measured at amortised cost using the effective interest method.



(w) Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably

measured. The following specific criteria must also be met:

(i) Sale of goods and services

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

acceptance, if any, or performance of services, net of value added taxes and discounts, and after eliminating sales within the Group.

The Group turnover reflects the invoiced values of knitted and woven garments and fabrics, inclusive of insurance and freight when sold

on a ‘cost, insurance and freight’ basis and in other cases on its ‘free on board’ value for sales on ‘free on board’ basis.

(ii) Other operating income

Other operating income earned by the Group are recognised on the following basis:

• Interest income - as it accrues (taking into account the effective yield on the asset) unless collectability is in doubt.

• Dividend income - when the shareholder’s right to receive payment is established.

(x) Share Capital

Ordinary shares are classified as equity. Mandatorily redeemable preference shares are classified as liabilities. Incremental costs directly

attributable to the issue of new shares or options are shown in equity as deduction, net of tax, from proceeds. Where any Group

company purchases its equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs

(net of income taxes) is deducted from equity attributable to the Company’s equity holders until the shares are cancelled or reissued.

When such shares are subsequently reissued, any net consideration received, is included in equity attributable to the Company’s equity

holders.

(y) Dividend Distribution

Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial statements in the period in which

the dividends are approved by the Company’s shareholders.

(z) Non-Current Assets held for Sale

Non-current assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell if their

carrying amount is recovered principally through a sale transaction rather than through a continuing use. This condition is regarded as

met only, when the sale is highly probable and the asset is available for immediate sale in its present condition.

(aa) Grant Related to Income

The company receives grants in relation to income which has been presented as a credit in the statement of comprehensive income under

the heading ‘Other operating income – net’.


3. PROPERTY, PLANT AND EQUIPMENT

(a) THE GROUP

Freehold Land andBuildings

Buildings on Leasehold

LandPlant and

MachineryMotor

Vehicles

Furnitureand

EquipmentComputerEquipment

AssetsUnder

ConstructionOther

Items Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000At June 30, 2012

COST OR VALUATIONAt July 1, 2011 885,213 725,280 2,706,931 91,329 476,138 132,966 29,798 1,991 5,049,646 Additions 8,328 4,993 79,226 20,267 14,301 7,516 2,827 635 138,093 Disposals - - (7,978) (9,826) (1,334) (650) - - (19,788)Reclassifications 44 (269) 12,694 - (4,264) (740) (12,878) 5,413 - Assets written off - (3,794) (31,980) (6,747) (7,394) (25,779) (1,225) (558) (77,477)Transfer to intangible assets (Note 4)

- - - - - (11,292) - - (11,292)

Revaluation surplus 15,117 13,297 - - - - - - 28,414 Translation adjustments (16,173) - (23,351) (1,077) (2,444) (971) - (204) (44,220)

At June 30, 2012 892,529 739,507 2,735,542 93,946 475,003 101,050 18,522 7,277 5,063,376

DEPRECIATIONAt July 1, 2011 83,616 135,666 2,001,622 55,010 399,927 115,648 2,194 1,674 2,795,357 Charge for the year 14,565 15,329 131,973 12,330 16,937 7,418 259 617 199,428 Disposals - - (6,856) (9,138) (161) (595) - - (16,750)Reclassifications - (181) 5 - 509 (371) - 38 - Assets written off - (3,667) (28,858) (3,375) (6,392) (25,778) - (558) (68,628)Transfer to intangible assets (Note 4)

- - - - - (8,894) - - (8,894)

Revaluation adjustments (7,624) (20,223) - - - - - - (27,847)Translation adjustments (1,288) - (6,401) (416) (1,071) (300) - 1 (9,475)

At June 30, 2012 89,269 126,924 2,091,485 54,411 409,749 87,128 2,453 1,772 2,863,191

NET BOOK VALUESAt June 30, 2012 803,260 612,583 644,057 39,535 65,254 13,922 16,069 5,505 2,200,185



3. PROPERTY, PLANT AND EQUIPMENT

(a) THE GROUP Freehold

Land andBuildings

Buildings on Leasehold

LandPlant and

MachineryMotor

Vehicles

Furnitureand

EquipmentComputerEquipment

AssetsUnder

ConstructionOther

Items Total

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

At June 30, 2011

COST OR VALUATION

At July 1, 2010 861,945 726,991 2,665,385 94,250 450,462 171,115 - 14,588 4,984,736

Additions 37,367 11,137 67,354 18,823 24,118 6,463 16,862 21 182,145

Disposals (7,094) - (13,531) (18,666) (1,128) (390) - (10,963) (51,772)

Reclassifications 1,315 (12,936) 808 - 7,413 (9,536) 12,936 - -

Assets written off (935) - (1,367) (2,677) (2,577) (33,881) - - (41,437)

Transfer to intangible assets (Note 4)

- - - - - (357) - - (357)

Transfer to non current receivables

- - - - - - - (766) (766)

Revaluation surplus 10,406 - - - - - - - 10,406

Translation adjustments (17,791) 88 (11,718) (401) (2,150) (448) - (889) (33,309)

At June 30, 2011 885,213 725,280 2,706,931 91,329 476,138 132,966 29,798 1,991 5,049,646

DEPRECIATION

At July 1, 2010 70,375 122,791 1,879,555 63,281 377,333 150,157 - 1,557 2,665,049

Charge for the year 13,922 14,809 129,809 12,160 17,176 9,141 259 117 197,393

Disposals (1,121) - (7,689) (15,529) (607) (359) - - (25,305)

Reclassifications 726 (1,934) 2,133 (2,170) 8,537 (9,227) 1,935 - -

Assets written off (268) - (1,367) (2,677) (2,284) (33,862) - - (40,458)

Transfer to intangible assets (Note 4)

- - - - - (76) - - (76)

Translation adjustments (18) - (819) (55) (228) (126) - - (1,246)

At June 30, 2011 83,616 135,666 2,001,622 55,010 399,927 115,648 2,194 1,674 2,795,357

NET BOOK VALUES

At June 30, 2011 801,597 589,614 705,309 36,319 76,211 17,318 27,604 317 2,254,289



3. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

(c) THE COMPANY

Buildings onLeasehold

LandPlant and

Machinery Total

Rs’000 Rs’000 Rs’000

At June 30, 2012

COST OR VALUATION

At July 1, 2011 134,344 5,748 140,092

Revaluation surplus 9,513 - 9,513

At June 30, 2012 143,857 5,748 149,605

DEPRECIATION

At July 1, 2011 25,752 5,748 31,500

Charge for the year 2,645 - 2,645

At June 30, 2012 28,397 5,748 34,145

NET BOOK VALUES

At June 30, 2012 115,460 - 115,460

Buildings onLeasehold

LandPlant and

Machinery Total

Rs’000 Rs’000 Rs’000

At June 30, 2011

COST OR VALUATION

At July 1, 2010 and June 30, 2011 134,345 5,748 140,093

DEPRECIATION

At July 1, 2010 23,107 5,748 28,855

Charge for the year 2,645 - 2,645

At June 30, 2011 25,752 5,748 31,500

NET BOOK VALUES

At June 30, 2011 108,593 - 108,593


3. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

(c) The land and buildings of the Group and the Company were revalued in June 2012 at their open market value by Land Surveyors.

If the land and buildings were stated on the historical cost basis, the amounts would be as follows:-

THE GROUP THE COMPANY2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000

Cost 1,385,455 1,376,153 18,364 18,364 Accumulated depreciation (977,376) (949,667) (10,208) (9,965)Net book values 408,079 426,486 8,156 8,399

(d) Property, plant and equipment above include leased assets as follows:

Plant and Motor 2012Machinery Vehicles Total

THE GROUP Rs’000 Rs’000 Rs’000

Cost 54,936 39,599 94,535 Accumulated depreciation (14,011) (18,547) (32,558)Net book values at June 30, 2012 40,925 21,052 61,977

Net book values at June 30, 2011 43,272 20,205 63,477

Leased assets are pledged as security for the related finance lease liabilities.

(e) Depreciation charge is analysed as follows: THE GROUP2012 2011

Rs’000 Rs’000

Cost of sales 172,215 169,714 Administrative and selling expenses 27,213 27,679

199,428 197,393

Depreciation charge for the Company is recorded in administrative and selling expenses.

(f) Borrowings are guaranteed by fixed and floating charges over the assets of the Group.

(g) The acquisition of property, plant and equipment includes purchases under finance leases obligations.



4. INTANGIBLE ASSETS Computer Software

DevelopmentCost Total

THE GROUP Rs’000 Rs’000 Rs’000COSTAt July 1, 2011 11,543 - 11,543 Additions 3,356 2,115 5,471 Transfer from property, plant and equipment (Note 3) 11,292 - 11,292 Write off (61) - (61)Translation adjustment (226) (2) (228)At June 30, 2012 25,904 2,113 28,017

At July 1, 2010 9,398 - 9,398 Additions 1,851 - 1,851 Transfer from property, plant and equipment (Note 3) 357 - 357 Translation adjustment (63) - (63)At June 30, 2011 11,543 - 11,543

AMORTISATIONAt July 1, 2011 7,080 - 7,080 Charge for the year 2,718 19 2,737 Transfer from property, plant and equipment (Note 3) 8,894 - 8,894 Write off (28) - (28)Translation adjustment (80) (2) (82)At June 30, 2012 18,584 17 18,601

At July 1, 2010 5,384 - 5,384 Charge for the year 1,632 - 1,632 Transfer from property, plant and equipment (Note 3) 76 - 76 Translation adjustment (12) - (12)At June 30, 2011 7,080 - 7,080

NET BOOK VALUES at 30 June 2012 7,320 2,096 9,416

NET BOOK VALUES at 30 June 2011 4,463 - 4,463

The average remaining useful life of the computer software range between 2 and 5 years.

Amortisation charge of Rs. 2,737,000 (2011: Rs. 1,632,000) has been charged in administrative and selling expenses.

5. INVESTMENTS IN SUBSIDIARY COMPANIES Unquoted2012 2011

THE COMPANY Rs’000 Rs’000(a) COST

At July 1, and at June 30, 1,340,661 1,340,661

IMPAIRMENT PROVISIONS

At July 1, and at June 30, (238,800) (238,800) 1,101,861 1,101,861

The Directors have carried out an impairment assesment as at June 30, 2012 and no impairment indicator has been identified.


5. INVESTMENTS IN SUBSIDIARY COMPANIES (CONTINUED)(b) The subsidiary companies are as follows: 2012 2011

Main BusinessName of Company

Class ofShares

HeldDenominated

CurrencyStated

CapitalCountry of

Incorporation

% Holding % Holding

Direct Indirect Direct Indirect

000’s

Ajax Sweaters Limited Ordinary Taka 36,036 Bangladesh - 100.00% - 100.00% Knitwear

Floreal Knitwear Ltd (2) Ordinary Rs. 203,824 Mauritius 100.00% - 100.00% - Knitwear

Floreal Madagascar SA Ordinary MGA 300,000 Madagascar - 99.70% - 99.70% Knitwear

Floreal Creation SA Ordinary Euro 50 France 100.00% - 100.00% - Knitwear

Floreal Boutique SARL Ordinary MGA 2,000 Madagascar - 100.00% - 100.00% Knitwear

Ferney Spinning Mills Limited (3) Ordinary Rs. 9,564 Mauritius 100.00% - 100.00% - Knitwear

Floreal International Ltd Ordinary Rs. 14,000 Mauritius 100.00% - 100.00% - Knitwear

Floreal Knowledge Centre Limited Ordinary Rs. 25 Mauritius 100.00% - 100.00% - Knitwear

Floreal Cashmere Limited (2) Ordinary Rs. 22,625 Mauritius - - 100.00% - Knitwear

Ferney Manufacturing Industries Limited (3) Ordinary Rs. 15,750 Mauritius - - 100.00% - Knitwear

Société Civile Immobilières des Mascareignes Ordinary MGA 2,000 Madagascar 0.20% 99.80% 0.20% 99.80% Knitwear

Infoclick Limited Ordinary Rs. 10 Mauritius 100.00% - 100.00% - Knitwear

Texaro Ordinary MGA 260,000 Madagascar - 83.55% - - Knitwear

CIELTex SA (Proprietary) Limited Ordinary ZAR 1 South Africa - 100.00% - 100.00% Retail

Fibretex SA (Proprietary) Limited (6) Ordinary ZAR 1 South Africa - 100.00% - 100.00% Retail

CTL Retail Ltd Ordinary Rs. 10,001 Mauritius 100.00% - 100.00% - Retail

De Nyon Limited Ordinary Rs. 33,547 Mauritius - 100.00% - 100.00% Knits

Tropic Knits Limited Ordinary Rs. 15,000 Mauritius 100.00% - 100.00% - Knits

Tropic Madagascar SA Ordinary MGA 6,500,000 Madagascar 100.00% 100.00% - 100.00% Knits

Consolidated Dyeing & Fabrics Limited (5) Ordinary Rs. 100,000 Mauritius - 100.00% - 100.00% Knits

Consolidated Dyeing Co Limited (5) Ordinary Rs. 107,500 Mauritius - - 43.00% 57.00% Knits

TKL International Ltd Ordinary Rs. 3,814 Mauritius 100.00% - 100.00% - Knits

Floreal Manufacturing Limited Ordinary Rs. 5,750 Mauritius - 100.00% - 100.00% Knits

Societe Bonnetiere Malagasy Ordinary MGA 390,000 Madagascar - 100.00% - - Knits

Aquarelle Clothing Ltd (4) Ordinary Rs. 180,000 Mauritius 100.00% - 100.00% - Woven

Aquarelle Madagascar SARL Ordinary MGA 225,000 Madagascar - 100.00% - 100.00% Woven

Aquarelle International Limited Ordinary Rs. 7,404 Mauritius - 100.00% - 100.00% Woven

Aquarelle India Private Limited (7),(8) Ordinary INR 24,000 India - 100.00% - 100.00% Woven

Consolidated Fabrics Ltd Ordinary Rs. 25,743 Mauritius - 80.00% - 80.00% Woven

International Fabrics Ltd Ordinary USD 11,328 Mauritius - 80.00% - 80.00% Woven

Pastel Blue Ltd (4) Ordinary Rs. 40,000 Mauritius - 100.00% - 100.00% Woven

Laguna Clothing Ltd (1).(8) Ordinary INR 74,900 India - 50.00% - 50.00% Woven

Tinka International Ltd Ordinary HKG 100 Hong Kong - 100.00% - 100.00% Woven

Industrial Consultancy Services Ltd Ordinary Rs. 25 Mauritius - 100.00% - 100.00% Woven

New Island Clothing Limited (1) Ordinary Rs. 20,000 Mauritius - 50.00% - 50.00% Woven

Azzurri Company Ltd (1) Ordinary USD 400 Mauritius - 50.00% - 50.00% Woven

New Island Clothing Madagascar SA Ordinary MGA 10,000 Madagascar - 98.80% - - Woven

(1) The companies are deemed to be subsidiaries of the Group, as the Group maintains management control over those companies.

(2) Floreal Cashmere Limited has been amalgamated with Floreal Knitwear Limited during the financial year ended June 30, 2012.

(3) Ferney Manufacturing Industries Limited has been amalgamated with Ferney Spinning Mills Limited during the financial year ended June 30, 2012.

(4) Pastel Blue Limited has been amalgamated with Aquarelle Clothing Limited during the financial year ended June 30, 2012.

(5) Consolidated Dyeing Co Limited has been amalgamated with Consolidated Dyeing & Fabrics Limited during the financial year ended June 30, 2012.

(6) Fibretex SA (Proprietary) Limted has been liquidated during the financial year ended June 30, 2012.

(7) The Group has acquired an additional 50% holding in Aquarelle Private India Limited during the financial year ended June 30, 2011.

(8) Aquarelle Indian Private Limited and Laguna Clothing Ltd have been consolidated for 15 months up to June 30,2012 to be coterminous with the accounting year end of the Group.



6. INVESTMENTS IN ASSOCIATES Unquoted 2012 2011

(a) THE GROUP Rs’000 Rs’000At July 1, - 47,167 Share of results - 870 Movement in reserves - 1,600 Transfer to non-current assets classified as held-for-sale (Note 12) - (49,637)At June 30, - -

(b) The associates are as follows: 2012 & 2011Country of % Holding

Name of Company Year ended Incorporation Direct Indirect

Harris Wilson Textiles SA June 30, 2012 France - 21.90%AMTECS (International) Ltd June 30, 2012 Mauritius - 30.00%

(c) The following table illustrates summarised financial information of the group’s investment in its associates, now reclassified as held for sale:

2012 2011Rs’000 Rs’000

Income statementRevenues 958,348 966,318Profit 1,895 15,354

The investment in AMTECS (International) Ltd is fully impaired and the above figures relate principally to Harris Wilson Textiles SA.

7. AVAILABLE FOR SALE INVESTMENTS THE GROUP AND THE COMPANY

2012 2011Rs’000 Rs’000

At July 1, 3,243 3,243 Additions 234 - At June 30, 3,477 3,243

The available-for-sale investments have been stated at cost, which the directors consider the approximate fair value.

All investments are denominated in Mauritian Rupees.


8. NON CURRENT RECEIVABLES THE GROUP2012 2011

Rs’000 Rs’000

Long-term deposits 12,998 7,691

9. DEFERRED TAX (ASSETS)/LIABILITIES THE GROUP THE COMPANY2012 2011 2012 2011

(a) THE GROUP Rs’000 Rs’000 Rs’000 Rs’000

Deferred tax liabilities 175,519 148,097 18,883 15,970 Deferred tax assets (32,628) (21,132) - - Net deferred tax liabilities 142,891 126,965 18,883 15,970

The movement in deferred tax during the year is as follows :2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000At July 1, 126,965 125,123 15,970 16,339 Translation adjustment (673) (225) - - Other comprehensive income 5,299 4,285 1,617 - Income statement (Note 20 (b)) 11,300 (2,218) 1,296 (369)At June 30, 142,891 126,965 18,883 15,970

Deferred tax assets and liabilities, deferred tax charge/(credit) in the Statement of Comprehensive Income are attributable to the following items :

AtJune 30,

2011Income

Statement

OtherComprehensive

I ncome

AtJune 30,

2012THE GROUPRs’000 Rs’000 Rs’000 Rs’000

Deferred tax liabilitiesAccelerated tax depreciation 64,122 42,707 106,829 Revaluation of properties 83,996 (20,515) 5,299 68,780 Others (21) (69) (90)

148,097 22,123 5,299 175,519

Deferred tax assetsRetirement benefit obligations 1,123 117 - 1,240 Tax losses 4,831 (6,630) - (1,799)Provisions 6,960 6,595 - 13,555 Investment tax credit 3,901 799 - 4,700 Others 4,317 10,615 - 14,932

21,132 11,496 - 32,628

Net Deferred tax liabilities 126,965 10,627 5,299 142,891



9. DEFERRED TAX (CONTINUED)

(b) THE COMPANYAt

June 30,2011

Incomestatement

Othercomprehensive

income

AtJune 30,

2012Rs’000 Rs’000 Rs’000 Rs’000

Deferred tax liabilityAccelerated tax depreciation 15,595 (2,330) 13,265 Revaluation of property 3,520 481 1,617 5,618

19,115 (1,849) 18,883 Deferred tax assetTax losses (3,145) 3,145 - - Net Deferred Tax Liabilities 15,970 1,296 - 18,883

THE GROUP2012 2011

Rs’000 Rs’000(c) Unused tax losses available for offset against

future taxable profits 7,555 21,040

10. INVENTORIES THE GROUP2012 2011

Rs’000 Rs’000Raw materials (NRV) 650,732 846,790 Other stocks (NRV) 74,206 48,433 Work in progress (NRV) 1,109,657 1,135,045 Finished goods (NRV) 125,332 89,135 Goods in transit (Cost) 76,449 95,316

2,036,376 2,214,719

The amount of inventories recognised as an expense during the year is Rs. 5,069,011,119 (2011 : Rs. 6,086,417,000).

11. TRADE AND OTHER RECEIVABLES THE GROUP THE COMPANY

2012 2011 2012 2011Rs’000 Rs’000 Rs’000 Rs’000

Trade receivables 1,364,338 1,592,867 - - Less : provision for impairment (26,794) (30,665) - - Trade receivables - net 1,337,544 1,562,202 - - Amount receivable from subsidiaries - - 173,383 136,422 Amount receivable from related companies 5,583 2,491 - - Advances to Executive Directors 14,878 21,172 - - Fair value asset on forward contracts 33,228 16,599 - - Other receivables and prepayments (Note 11 (viii)) 251,889 329,191 2,146 2,535

1,643,122 1,931,655 175,529 138,957


11. TRADE AND OTHER RECEIVABLES (CONT’D)

The carrying amount of trade and other receivables approximate their fair values.

The maximum exposure to credit risk at the end of the reporting period is equal to the carrying value of each class of trade and other receivables mentioned above.

(i) Trade receivables are not secured, non interest bearing and are generally on 60 days term. At June 30, 2012, trade receivables at nominal value of Rs. 26,794,000 (2011 : Rs. 30,665,000) were impaired and fully provided for based on the financial difficulties of the customers.

(ii) At June 30, 2012 and 2011, the ageing analysis of trade receivables is as follows:Neither Past

Due norImpaired

Past Due not ImpairedTotal ‹ 30 days 30 - 60 days 60 - 90 days › 90 days

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

2012 1,337,544 1,186,348 95,218 26,319 20,702 8,957

2011 1,562,202 991,032 255,709 158,652 95,503 61,306

The credit quality of those receivables have been assessed by management who is satisfied as to their recoverability.

(iii) The carrying amount of the Group’s trade and other receivables are denominated in the following currencies: THE GROUP THE COMPANY

2012 2011 2012 2011Rs’000 Rs’000 Rs’000 Rs’000

Rupee 180,120 222,139 175,529 138,957 US Dollar 307,003 411,877 - - UK Pound 212,983 250,511 - - Euro 424,291 642,563 - - ZAR 261,973 235,346 - - INR 165,895 152,674 - - Other currencies 90,857 16,545 - -

1,643,122 1,931,655 175,529 138,957

(iv) Movements on the provision for impairment of trade receivables are as follows: THE GROUP

2012 2011Rs’000 Rs’000

At July 1, (30,665) (31,809)Receivables written off during the year as uncollectible 6,910 677 Unused amounts reversed 2,978 21,187 Increase in provision for the year (6,017) (20,720)At June 30, (26,794) (30,665)

(v) The other classes within trade and other receivables do not contain impaired assets.

(vi) All other classes of trade and other receivables are neither past due nor impaired. No collaterals are held in respect of those receivables.

(vii) The advances to Directors are secured by charges on their respective personal assets.



11. TRADE AND OTHER RECEIVABLES (CONT’D) THE GROUP THE COMPANY

(viii) Other receivables and prepayments 2012 2011 2012 2011Rs’000 Rs’000 Rs’000 Rs’000

Other receivables and prepayments consist of:Deposits 12,787 15,747 - - Taxes and grants 45,194 66,787 - - Advance payments to suppliers 28,357 112,421 - - Advances to employees 10,186 11,338 - - Receivables from Executive Directors 4,170 6,188 - - Interest receivable - - - - Staff loan - - - - Dividends receivable - - - - Others 151,195 116,710 2,146 2,535

251,889 329,191 2,146 2,535

12. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE

The Company is presently involved into negotiations with a foreign buyer to dispose of its 21.9% stake in Harris Wilson Textiles SA. The 21.9% stake, previously accounted for as an investment in associate, is classified as a held for sale financial asset, as the conditions set by IFRS 5 were fulfilled.

2012 2011THE GROUP Rs’000 Rs’000At July 1, 22,366 - Transfer from investment in associate (Note 6) - 49,637 Impairment - (27,271)At June 30, 22,366 22,366

13. SHARE CAPITAL2012 2011

Rs’000 Rs’000Stated capital101,807,589 no par value ordinary shares 685,865 685,865

14. REDEEMABLE PREFERENCE SHARE CAPITAL THE GROUP2012 2011

Rs’000 Rs’000Redeemable Preference Shares at Rs. 1,000 eachAt July 1, 448,937 448,937 Repaid during the year (44,000) - Reclassified to current liabilities (404,937) - At June 30, - 448,937

The redeemable preference shares of Rs. 260 M in Tropic Knits Co Ltd (TKL) and Rs. 144.9 M in Consolidated Fabrics Ltd (CFL) are not transferable, carry no voting rights and are redeemable at subscription price at the option of the issuing subsidiary company.

Subject to the satisfaction of the Solvency Test, they will entitle the holder to an annual dividend up to a maximum of 5% up to 2012, and thereafter a participating dividend as well as an annual dividend up to a maximum of 10% until redemption.

During the year ended June 30, 2012, the Group approved the redemption of the preference shares to the Mauritius Commercial Bank Ltd and other financial institutions as follows: - Redemption on June 29, 2012 by Aquarelle Clothing Ltd of preference shares of Rs. 44 M; - Redemption on July 05, 2012 by Tropic Knits Co Ltd of preference shares of Rs. 260 M; - Redemption in December 2012 by Consolidated Fabrics Ltd of preference shares of Rs. 144.9 M. Based on the above schedule, whereby the Group has a redemption obligation, the preference shares have been classified as current liabilities.


15. BORROWINGS THE GROUP THE COMPANY 2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000(a) Non-current

Bank loans- note (b) 51,538 68,165 - - 9% Redeemable preference shares - note (c) 30,000 30,000 - - Obligations under finance leases - note (d) 38,524 43,631 - - Debentures - note (f) 28,000 42,000 28,000 42,000 Others 1,790 16,030 - -

149,852 199,826 28,000 42,000

CurrentBank overdrafts - note (e) 320,604 939,332 386 479 Bank loans - note (b) 54,837 9,639 - - Import loan -note (g) 255,976 268,682 - - Debentures - note (f) 14,000 14,000 14,000 14,000 Obligations under finance leases - note (d) 16,086 14,651 - - Others 2,304 2,123 82 77

663,807 1,248,427 14,468 14,556

Total borrowings 813,659 1,448,253 42,468 56,556

THE GROUP THE COMPANY 2012 2011 2012 2011

(b) Bank loans Rs’000 Rs’000 Rs’000 Rs’000Within one year 54,837 9,639 - - After one year and before two years 14,053 22,124 - - After two years and before three years 7,889 13,835 - - After three years and before five years 9,243 15,725 - - After five years 20,353 16,481 - -

106,375 77,804 - -

The loans bear interest between Prime Lending Rate (PLR) of 6.9% for mauritian based subsidiaries and the Company and 14% for foreign subsidiaries (2011 : Prime Lending Rate and 14%) and are secured by fixed and are secured by fixed and floating charges over the assets of the Group and the Company.

(c) 9% redeemable preference shares

These preference shares are entitled to a fixed cumulative preferential dividend of 9% per annum and may be redeemed at par value at the relevant subsidiary’s option on or before June 30, 2014. On winding up, the shares are privileged in respect of outstanding capital and interest.



15. BORROWINGS (CONT’D)

(d) Obligations under finance leases THE GROUP THE COMPANY 2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000Finance lease liabilities - minimum lease payments:Within one year 20,592 19,994 - - After one year and before two years 19,379 18,488 - - After two years and before three years 17,891 16,621 - - After three years and before five years 5,406 14,611 - - After five years 923 1,267 - -

64,191 70,981 - - Finance charges allocated to future periods (9,581) (12,699) - - Present value of finance lease liabilities 54,610 58,282 - -

The present value of finance lease liabilities may be analysed as follows : THE GROUP THE COMPANY

2012 2011 2012 2011Rs’000 Rs’000 Rs’000 Rs’000

Within one year 16,086 14,651 - - After one year and before two years 16,381 14,552 - - After two years and before three years 15,583 14,319 - - After three years and before five years 5,725 13,551 - - After five years 835 1,209 - -

54,610 58,282 - -

(e) The bank overdrafts are secured by fixed and floating charges over the assets of the Group and the Company.

(f) Debentures THE GROUP THE COMPANY 2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000Within one year 14,000 14,000 14,000 14,000 After one year and before two years 14,000 14,000 14,000 14,000 After two years and before three years 14,000 14,000 14,000 14,000 After three years and before five years - 14,000 - 14,000

42,000 56,000 42,000 56,000

The debentures bear interest at 1% above PLR and are repayable in annual equal instalments.

(g) The import loans bear interest between Prime Lending Rate (PLR) and 1.5% to 3.5% above LIBOR (2011: PLR and 1.5 % to 3.0% above LIBOR) and are secured by fixed and floating charges over the assets of the Group and of the Company.

(h) The carrying amounts of the Group’s and Company’s borrowings are denominated in the following currencies:


Rs’000 Rs’000 Rs’000 Rs’000Rupee 165,019 545,886 42,468 56,556 US Dollar 360,261 420,745 - - Euro 145,386 212,278 - - GBP 94,521 44,754 - - INR 39,151 180,151 - - Other currencies 9,321 44,439 - -

813,659 1,448,253 42,468 56,556

(i) The fair values of the non-current borrowings are approximately equal to their carrying value.


16. OTHER COMPREHENSIVE INCOME

(a) THE GROUP

RevaluationSurplus

Translationof foreign

operations Total2012Rs’000 Rs’000 Rs’000

Revaluation surplus 56,261 - 56,261Deferred tax on revaluation reserve (5,299) - (5,299)Translation differences on foreign subsidiaries - (33,565) (33,565)Other comprehensive income/(loss) for year 2012 50,962 (33,565) 17,397

2011

Revaluation surplus 10,406 - 10,406Deferred tax on revaluation reserve (4,285) - (4,285)Movement on reserves of associate - 1,600 1,600Translation differences on foreign subsidiaries - (61,503) (61,503)Other comprehensive income/(loss) for year 2011 6,121 (59,903) (53,782)

(b) THE COMPANYRevaluation

Surplus2012 Rs’000

Revaluation surplus 9,513 Deferred tax on revaluation reserve (1,617)Release of fair value of available-for-sale investment - Other comprehensive income/(loss) for year 2012 7,896

2011Revaluation surplus - Deferred tax on revaluation reserve - Release of fair value of available-for-sale investment - Other comprehensive income/(loss) for year 2011 -



17. RETIREMENT BENEFIT OBLIGATIONS THE GROUP2012 2011

Amounts recognised in the Statement of financial position: Rs ‘000 Rs ‘000Pension benefits (note (a)) 16,858 14,655 Other post retirement benefits (note (b)) 57,933 50,008

74,791 64,663

(a) The Group has two defined benefit plans, one funded and one unfunded, covering substantially all of its employees, both being administered separately. The Group has also provided for an unfunded retirement benefit plan to former employees. The following tables summarise the funded status and amounts recognised in the statement of financial position and the component of net benefit expense recognised in the statement of comprehensive income for the respective plans.

FundedRetirement

Benefit Planfor ExistingEmployees

UnfundedRetirement

Benefit planfor existing employees

UnfundedRetirement

Benefit planfor formerEmployees Total

Benefit liability 2012 2011 2012 2011 2012 2011 2012 2011Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000

Defined benefit obligation (65,599) (59,021) (1,485) (1,294) (10,716) (10,838) (77,800) (71,153)Fair value of plan assets 62,640 64,044 - - - - 62,640 64,044

(2,959) 5,023 (1,485) (1,294) (10,716) (10,838) (15,160) (7,109)Unrecognised actuarial (gains)/losses (1,812) (7,583) (880) (961) 994 998 (1,698) (7,546)Benefit liability (4,771) (2,560) (2,365) (2,255) (9,722) (9,840) (16,858) (14,655)

FundedRetirement

Benefit Planfor ExistingEmployees

UnfundedRetirement

Benefit planfor existing employees

UnfundedRetirement

Benefit planfor formerEmployees Total

Net benefit expense 2012 2011 2012 2011 2012 2011 2012 2011Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000

Current service cost 3,641 4,061 46 73 - - 3,687 4,134 Scheme expenses 632 638 - - - - 632 638 Cost of insuring risk benefits 606 531 - - - - 606 531 Interest cost on benefit obligation 5,919 5,706 127 121 970 994 7,016 6,821 Expected return on plan assets (6,472) (6,390) - - - - (6,472) (6,390)Effect of settlement - - - - - - - Net actuarial (loss)/gain recognised in the year

(417) (269) (62) (57) 68 7 (411) (319)

Net benefit expense 3,909 4,277 111 137 1,038 1,001 5,058 5,415

Actual return on plan assets (1,190) 3,849


17. RETIREMENT BENEFIT OBLIGATIONS (CONTINUED)

The amounts recognised on the statement of financial position are as follows: THE GROUP2012 2011

Rs’000 Rs’000At July 1, 14,655 14,502 Total expense 5,058 5,415 Employer contributions (2,855) (5,262)At June 30, 16,858 14,655

Changes in the present value of the defined benefit obligation are as follows:

Funded Retirement

Benefit Plan for Existing Employees

Unfunded Retirement Benefit For

Existing Employees

Unfunded Retirement

Benefit for Former Employees Total

Rs’000 Rs’000 Rs’000 Rs’000 Defined benefit obligations at June 30, 2010 (54,880) (1,213) (10,557) (66,650)Interest cost (5,706) (121) (994) (6,821)Current service cost (4,061) (73) - (4,134)Benefits paid 1,375 - 1,155 2,530 Actuarial losses/(gains) 4,251 113 (442) 3,922 Defined benefit obligations at June 30, 2011 (59,021) (1,294) (10,838) (71,153)Interest cost (5,919) (127) (970) (7,016)Current service cost (3,641) (46) - (3,687)Benefits paid 675 - 1,155 1,830 Actuarial losses/(gains) 2,307 (18) (63) 2,226 Defined benefit obligations at June 30, 2012 (65,599) (1,485) (10,716) (77,800)

Changes in the fair value of plan assets of the funded retirement benefit plan are as follows : Rs’000

Fair value of plan assets at June 30, 2010 58,630 Expected return 6,390 Contributions by employer 4,106 Scheme expenses (638)Cost of insuring risk benefits (531)Benefits paid (1,375)Actuarial losses (2,538)Fair value of plan assets at June 30, 2011 64,044 Expected return 6,472 Contributions by employer 1,700 Scheme expenses (632)Cost of insuring risk benefits (606)Benefits paid (676)Actuarial losses (7,662)Fair value of plan assets at June 30, 2012 62,640

The Group expects to contribute Rs. 4,000,000 to the pension scheme for the year ending June 30, 2013.




The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:Funded Retirement

Renefit Plan 2012 2011

Local equities 24% 26%Overseas equities 44% 43%Fixed interest 32% 31%

The assets of the plan are invested in the CIEL Group Segregated Fund. The breakdown of the assets above correspond to a notional allocation of the underlying investments based on the long term strategy of the Fund.

The Fund is expected to produce a smooth return, a fairly reasonable indication of future returns can be obtained by looking at historical ones. Therefore, the long term expected return on asset assumption has been based on historical performance of the Fund.

In terms of the individual expected returns, the expected return on equities has been based on an equity risk premium above a risk free rate. The risk free rate has been measured in accordance to the yields on government bonds at the measurement date.

The fixed interest portfolio includes local and foreign deposits. The expected return for this asset class has been based on these fixed deposits at the measurement date.

The principal assumptions used in determining pension for the Group are shown below:2012 2011 2010

Discount rates 9.5% 9.5% 10.0%Expected rate of return on assets 10.0% 10.0% 10.5%Future salary increases 7.5% - 8.0% 7.5%-8% 8.0%Future pension increases 0.0% 0.0% 0.0%

Amounts for the current and previous years are as follows:

2012 2011 2010 2009 2008Rs '000 Rs '000 Rs '000 Rs ‘000 Rs ‘000

Defined benefit obligation (77,800) (71,153) (66,650) (65,647) (60,637)Plan assets 62,640 64,044 58,630 57,733 53,824 Deficit (15,160) (7,109) (8,020) (7,914) (6,813)Experience adjustments on plan liabilities 2,226 3,922 8,052 2,035 1,173 Experience adjustments on plan assets (7,662) (2,538) (6,848) (3,913) (8,157)



(b) Other post retirement benefits

Other post retirement benefits comprise of retirement gratuities payable under the Employment Rights Act 2008.

The amounts recognised in the statement of financial position are as follows: THE GROUP2012 2011

Rs’000 Rs’000Present value of plan liability (61,155) (53,291)Unrecognised actuarial loss 3,222 3,283 Liability in the statement of financial position (57,933) (50,008)

The amounts recognised in the income statement are as follows: THE GROUP2012 2011

Rs’000 Rs’000Current service cost 5,668 7,099 Interest cost 4,703 4,178 Actuarial gain (147) (1,219)Total, included in employee benefit expense 10,224 10,058

The amounts recognised on the statement of financial position are as follows: THE GROUP2012 2011

Rs’000 Rs’000At July 1, (50,008) (40,343)Total expense as above (10,224) (10,058)Benefits paid 2,299 393 At June 30, (57,933) (50,008)

The movement in the defined benefit obligation over the year is as follows: THE GROUP2012 2011

Rs’000 Rs’000At July 1, (53,291) (40,343)Current service cost (5,688) (7,099)Interest cost (4,703) (4,178)Employees’ contribution - - Past service cost - - Actuarial gains/(losses) 228 (2,064)Benefits paid 2,299 393 At June 30, (61,155) (53,291)

Amounts for the current and previous years are as follows: 2012 2011 2010Rs ‘000 Rs ‘000 Rs ‘000

Defined benefit obligation (61,155) (53,291) (40,343)

The principal actuarial assumptions used for accounting purposes were: THE GROUP2012 2011

Discount rate 8.6% - 9.5% 8.0% - 9.5% Future long term salary increase 5.0% - 10.0% 5.0% - 10.0%



18. EMPLOYEE BENEFIT LIABILITY

The Company issued redeemable shares for executives pursuant to resolutions of the Board approved on February 28, 2005 and approved

by the shareholders on April 13, 2005. Under the scheme, a fixed number of Redeemable B shares and Redeemable C shares were issued at

a fixed price per share.

The shares have the following specificities:

Redeemable B Shares

100 redeemable shares were issued to the Chief Executive Officer of the Woven Cluster at a consideration of of Rs. 35,001 each. The shares are

not transferable, carry no voting rights and are redeemable at subscription price at the option of the Company.

The shares will entitle the holder to a non-cumulative annual dividend equivalent to 0.02% of the dividend paid to ordinary shareholders.

As the overall contract does not evidence any residual interest to the shareholder, the directors are thus of opinion that the contract is a financial

liability. Dividends payable are recognised as an expense in profit/loss over the term of the contract.

Redeemable C Shares

Some subsidiaries of the Company have also issued redeemable shares for executives pursuant to resolutions approved by the Board on

June 20, 2005 and approved by the shareholders on July 1, 2005. Under the scheme, a fixed number of Redeemable C shares has been issued

at a fixed price per share. The shares have the following specificities :

The following redeemable shares were issued to the Chief Executive Officer of CIEL Textile Limited and also to the Chief Executive Officer of

the Woven Cluster :

No. Shares Issue PriceIn FKL Rs.Chief Executive Officer - CIEL Textile 200 1,113

In ACLChief Executive Officer - CIEL Textile 200 6,824Chief Executive Officer of the Woven cluster 300 6,824

In TKLChief Executive Officer - CIEL Textile 200 33,439


18. EMPLOYEE BENEFIT LIABILITY (CONTINUED)

The shares will each entitle the holder to a non-cumulative annual dividend equivalent to:

- 0.02% of the dividend paid to ordinary shareholders in the first three years following the issue (i.e. up to June 30, 2008)

- 0.002% of the increase in the retained earnings of the respective subsidiary company between June 30, 2003 and June 30, 2008.

The dividends were payable over a five year period from 2009 to 2013.

However, the dividends were paid in full during 2009, at which point a financial asset (advance) was recognised in the statement of

financial position. The employee benefit expense related to the dividends is recognised in the income statement on a straight-line basis

from the date of inception of the scheme up to June 30, 2013.

Total employee benefit liabilities recognised in the statement of financial position are as follows :


Rs’000 Rs’000 Rs’000 Rs’000Redeemable C Shares 9,760 18,320 - -

9,760 18,320 - -

Analysed as follows : THE GROUP THE COMPANY

2012 2011 2012 2011Rs’000 Rs’000 Rs’000 Rs’000

Non current - 9,659 - - Current 9,760 8,661 - -

9,760 18,320 - -

19. TRADE AND OTHER PAYABLES


Rs’000 Rs’000 Rs’000 Rs’000Trade payables 546,177 668,026 - - Bills discounted 315,480 540,393 - - Amount payable to subsidiaries - - 374,870 360,937 Amount payable to related parties 74,480 411 - - Amount payable to associates 190 4,523 - - Fair value liability on forward contracts 6,218 7,474 - - Other payables and accruals (note 19(a)) 587,928 577,607 3,729 4,721

1,530,473 1,798,434 378,599 365,658



19. TRADE AND OTHER PAYABLES (CONTINUED)

The carrying amount of the Group’s and the Company’s trade and other payables are denominated in the following currencies:


Rs’000 Rs’000 Rs’000 Rs’000Rupee 668,164 614,090 378,599 365,658 US Dollar 422,816 470,350 - - UK Pound 110,156 93,300 - - Euro 69,863 277,604 - - INR 89,729 131,641 - - Other currencies 169,745 211,449 - -

1,530,473 1,798,434 378,599 365,658

The bills discounted bear interest at 1.5% to 3.5% above LIBOR (2011 : 1.5 % to 3.0% above LIBOR) and are secured by fixed and floating charges over the assets of the Group and the Company.

(a) Other payables and accruals THE GROUP THE COMPANY2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000Other payables and accruals consist of :Accrued expenses 56,078 42,080 - - Deposits from customers 14,965 53,036 - - Provisions (Note 19(b)) 258,111 290,834 - - Goods in transit 35,464 7,433 - - Employees related expenses 118,470 79,163 - - Directors’ fees 1,470 1,630 1,470 1,630 Other payables 103,370 103,431 2,259 3,091

587,928 577,607 3,729 4,721

(b) Movement in provisions during the year is as follows: THE GROUP2012 2011

Rs’000 Rs’000At July 1, 290,834 426,453 Additional provisions 100,302 145,570 Amounts incurred and charged against provisions (131,745) (278,781)Exchange differences (1,280) (2,408)At June 30, 258,111 290,834

Provisions consist mainly of performance-related bonuses, mandatory end-of-year bonus, claims and air freight.

20. INCOME TAX


(a) Income Tax - Statement of Financial Position Rs’000 Rs’000 Rs’000 Rs’000

At July 1, 18,177 18,657 - 358 Current tax on adjusted profits for the year 83,198 19,385 70 - Alternative Minimum Tax 3,119 815 - - Exchange Difference (8,752) (1,182) - - Over provision of prior years (5,602) (3,725) - (235)Corporate Social Responsibility 2,776 2,858 1,127 1,289 Paid during the year (44,155) (18,631) (1,127) (1,412)At June 30, 48,761 18,177 70 -


20. INCOME TAX (CONTINUED)THE GROUP THE COMPANY

2012 2011 2012 2011(b) Income Tax - Income Statement Rs’000 Rs’000 Rs’000 Rs’000

Current tax on adjusted profits for the year 83,198 19,385 70 - Alternative Minimum Tax 3,119 815 - - Corporate Social Responsibility 2,776 2,858 1,127 1,289 Over provision of prior years (5,602) (3,725) - (235)

83,491 19,333 1,197 1,054 Deferred tax (Note 9 ) 11,300 (2,218) 1,296 (369)

94,791 17,115 2,493 685

(c) The tax on the Group’s and Company’s profit before tax differs from the theoretical amount that would arise using the basic tax rate of the Group as follows:


Rs’000 Rs’000 Rs’000 Rs’000

Profit before tax 610,679 231,582 104,008 57,024

Tax calculated at a rate of 17% (2011 : 15%) 103,815 34,737 17,681 8,554

Adjustments for:-Non-deductible expenses 4,581 6,222 386 - Exempt income (1,028) (27,187) (18,446) (8,567)Alternative Minimum Tax (AMT) 3,119 815 - - Tax losses-net (951) 119 - - Effect of different tax rate 26,590 4,549 2,130 - Effect of change in tax law 1,309 - - - Underprovision of deferred tax in prior years (7,117) (5,716) (385) - Over provision of prior years (5,602) (3,725) - (235)Double tax relief (12,532) (3,752) - - Corporate Social Responsibility 2,776 2,858 1,127 1,289 Investment tax credit (15,225) 494 - - Others (4,944) 7,701 - (356)

94,791 17,115 2,493 685

21. OTHER OPERATING (LOSSES) / INCOMETHE GROUP THE COMPANY

Restated Restated2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000Profit on disposal of property, plant and equipment (1,181) 5,559 - - Duty drawback 69,712 68,258 - - Net foreign exchange differences (118,975) (134,053) 1,308 671 Other services 15,922 29,708 1,127 1,289

(34,522) (30,528) 2,435 1,960

Duty drawback relates to export incentives obtained from Indian authorities and are recognised on an accruals basis.

22. EMPLOYEE BENEFIT EXPENSETHE GROUP

2012 2011Rs’000 Rs’000

Wages and salaries 1,494,939 1,245,535 Social security costs 83,124 78,254 Other post retirement benefits (Note 17(b)) 7,925 13,849 Pension costs-defined benefit plans (Note 17(a)) 5,058 5,415 Pension costs- defined contribution plans 23,604 19,809 Others 41,049 37,510

1,655,699 1,400,372



23. PROFIT BEFORE TAXATIONTHE GROUP THE COMPANY

2012 2011 2012 2011Rs’000 Rs’000 Rs’000 Rs’000

Profit before taxation is arrived at aftercrediting :Profit on disposal of property, plant and equipment 3,406 5,559 - -

and charging:Depreciation on property, plant and equipment- owned assets 188,899 183,975 2,645 2,645 - leased assets 10,529 13,418 - - Amortisation of intangible assets 2,737 1,632 - - Cost of inventories recognised as expense 5,069,011 6,086,417 - - Employee benefit expense (Note 22) 1,655,699 1,400,372 - - No. of employees at year end 16,477 14,787 - -

24. NET FINANCE COSTSTHE GROUP THE COMPANY

2012 2011 2012 2011Rs’000 Rs’000 Rs’000 Rs’000

Interest expense on:- Bank overdrafts (23,286) (45,325) (227) - - Bills discounted (25,898) (19,443) - - - Bank and other loans (14,397) (10,013) - - - Import loans (8,387) (6,082) - - - Finance leases (5,956) (6,218) - - - Debentures (4,382) (5,522) (4,382) (5,521)- Preference share dividends (4,736) (3,820) (2,036) (1,120)- Others (6,073) (2,678) - (2,466)Finance costs (93,115) (99,101) (6,645) (9,107)

Interest income on: - Loans and Advances 1,219 71 4,387 7,116 - Bank Balances 3,899 2,878 - - - Others 365 1,393 32 - Finance income 5,483 4,342 4,419 7,116

Net finance costs (87,632) (94,759) (2,226) (1,991)

25. EARNINGS PER SHARETHE GROUP

Restated 2012 2011

Rs’000 Rs’000Profit attributable to owners of the parent 476,269 210,465 Preference dividends attributable to owners of the parent (18,447) (20,998)

457,822 189,467

Number of shares in issue 101,807,589 101,807,589

Basic and diluted earnings per share 4.50 1.86


26. DIVIDENDS THE GROUP THE COMPANY

2012 2011 2012 2011Rs’000 Rs’000 Rs’000 Rs’000

Amounts recognised as distribution to owners of the parent in the year:Interim dividend of Rs. 0.30 (2011: Rs. 0.20) per share 30,543 20,361 30,543 20,361 Final dividend of Rs. 0.70 (2011: Rs. 0.35) per share 71,265 35,633 71,265 35,633

101,808 55,994 101,808 55,994

Dividends payable at year end June 30 :Final Dividend to Ordinary Shareholders (payable by the holding company) 71,265 35,633 71,265 35,633 Preference dividend to financial institutions (payable by the Group) 20,247 22,447 - -

91,512 58,080 71,265 35,633

27. NOTES TO THE STATEMENTS OF CASH FLOWS THE GROUP THE COMPANY

2012 2011 2012 2011Rs’000 Rs’000 Rs’000 Rs’000

(a) Cash generated from operationsProfit before taxation 610,679 231,582 104,008 57,024 Adjustments for:- Depreciation of property, plant and equipment 199,427 197,393 2,645 2,645 - Profit on disposal of property, plant and equipment (3,406) (5,559) - - - Property, plant and equipment written off 8,849 979 - - - Amortisation of intangible assets 2,737 1,632 - - - Intangible assets written off 33 - - - - Impairment of non current asset held for sale - 27,271 - - - Retirement benefit obligations 10,128 14,002 - - - Employee benefit liability - (13,780) - - - Share of results of associates - (870) - - - Provision for doubtful debts - 20,720 - - - Unrealised foreign exchange differences 16,727 (84,743) - - - Interest income (5,483) (4,342) (4,419) (7,116)- Interest expense 93,115 99,101 6,645 9,107 Cash generated from operations before changes in working capital 932,806 483,386 108,879 61,660



27. NOTES TO THE STATEMENTS OF CASH FLOWS (CONTINUED) THE GROUP THE COMPANY

2012 2011 2012 2011Rs’000 Rs’000 Rs’000 Rs’000

Cash generated from operations before changes in working capital 932,806 483,386 108,879 61,660 Changes in working capital:- Inventories 178,343 (492,007) - - - Trade and other receivables 386,331 (214,107) (36,572) (20,778)- Trade and other payables (362,777) 37,569 12,941 30,297 Cash generated from operations 1,134,703 (185,159) 85,248 71,179

(b) Cash and cash equivalents 2012 2011 2012 2011Rs’000 Rs’000 Rs’000 Rs’000

Cash in hand and at bank 241,768 198,207 9,355 7,957 Bank overdrafts (note 15 - Borrowings) (320,604) (939,332) (386) (479)

(78,836) (741,125) 8,969 7,478

28. AMALGAMATIONS AND ACQUISITIONS

2012A number of subsidiaries have been amalgamated as disclosed in note 5 and there have been no business combinations during the financial year June 30, 2012.

2011Acquisition -Aquarelle India (Private) Ltd

The Group acquired the additional 50% of Aquarelle India (Private) Ltd on September 30, 2010.Rs’000

Purchase consideration 75,822

AssetsProperty, plant and equipment 25,163 Deferred tax assets 21 Inventories 33,376 Trade and other receivables 93,614

LiabilitiesRetirement benefit obligations (1,872)Trade and other payables (12,791)Borrowings (63,293)Bank overdraft (944)

73,274

Acquisition of non controlling interests 36,637

Loss on acquisition of non-controlling interests 39,185


29. CONTINGENT LIABILITIES

At June 30, 2012, the group had bank guarantees amounting to Rs. 119,119,278 (2011: Rs. 91,560,000) to third parties in respect of expatriates.

30. COMMITMENTS

(a) Capital commitments

Capital commitments amounting to Rs. 214,390,000 (2011: Rs. 212,177,000) have been approved by the Board of Directors but not yet contracted for.

(b) Operating lease commitments

The Group leases land and motor vehicles under non-cancellable operating lease agreements. The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

THE GROUP2012 2011

Rs’000 Rs’000Not later than one year 17,208 14,471 Later than one year and not later than five years 17,843 12,455 Later than five years - 4,881

35,051 31,807 The average lease terms range from three to ten years.



31. SEGMENTAL INFORMATION - GROUP

THE GROUP

Segment information

The following is an analysis of the group’s revenue and results from continuing operations by reportable segment:

June 30, 2012 Knitwear Fine Knits Woven Retail Adjustments TotalRs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Total segment revenues 2,135,137 1,988,435 4,457,721 61,890 - 8,643,183 Revenues from external customers 2,135,137 1,988,435 4,457,721 61,890 - 8,643,183

Segment profit 210,108 88,719 379,787 1,812 - 680,426 Net finance costs (34,644) (11,940) (40,318) (730) - (87,632)Fair value gains on outstanding forwardexchange contracts (2,751) 19,202 1,434 - - 17,885 Profit before taxation 172,713 95,981 340,903 1,082 - 610,679 Income tax expense (19,288) (3,442) (71,979) (82) (94,791)Profit after taxation 153,425 92,539 268,924 1,000 - 515,888 Non-controlling interests - - (39,619) - - (39,619)Profit attributable to owners of the parent 153,425 92,539 229,305 1,000 - 476,269

June 30, 2012 ConsolidationAdjustmentsKnitwear Fine Knits Woven Retail Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000ASSETSOther segment assets 2,540,259 1,310,000 2,641,778 47,614 (369,943) 6,169,708 Deferred income tax assets 10,372 2,409 18,474 1,373 - 32,628 Consolidated total assets 2,550,631 1,312,409 2,660,252 48,987 (369,943) 6,202,336

LIABILITIESOther segment liabilities 745,950 678,739 942,098 11,362 (266,676) 2,111,473 Current income tax liabilities 4,581 105 44,075 - - 48,761 Deferred income tax liabilities 96,491 17,169 61,859 - - 175,519 Borrowings 438,717 148,478 222,389 7,701 (3,626) 813,659 Consolidated total liabilities 1,285,739 844,491 1,270,421 19,063 (270,302) 3,149,412

Equity attributable to shareholders of parent 2,875,417 Preference share capital in subsidiaries - Non-controlling interests 177,507

6,202,336

OTHER INFORMATIONCapital additions 47,864 34,241 54,900 1,088 138,093 Depreciation and amortisation 51,878 56,300 89,363 1,887 199,428


31. SEGMENTAL INFORMATION - GROUP (CONTINUED)

June 30, 2011 ConsolidationAdjustmentsKnitwear Fine Knits Woven Retail Total

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000ASSETSOther segment assets 2,553,037 1,618,847 2,764,629 45,017 (344,897) 6,636,633 Deferred income tax assets 7,966 2,618 9,094 1,454 - 21,132 Consolidated total assets 2,561,003 1,621,465 2,773,723 46,471 (344,897) 6,657,765

LIABILITIESOther segment liabilities 798,341 589,103 913,318 9,469 (370,734) 1,939,497 Current income tax liabilities 4,423 100 13,654 - - 18,177 Deferred income tax liabilities 75,630 13,306 59,161 - - 148,097 Borrowings 595,483 375,777 468,915 8,078 - 1,448,253 Consolidated total liabilities 1,473,877 978,286 1,455,048 17,547 (370,734) 3,554,024

Equity attributable to shareholders of parent 2,501,483 Preference share capital in subsidiaries 448,937 Non-controlling interests 153,321

6,657,765

OTHER INFORMATIONCapital additions 54,641 27,845 98,523 1,136 182,145 Depreciation and amortisation 56,235 58,465 80,658 2,035 197,393

Geographical informationRevenues from

External Customers Non-Current Assets Capital Additions2012 2011 2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000Mauritius 6,522,711 5,760,804 1,644,158 1,632,110 97,468 76,166 Madagascar 2,566 5,897 307,467 359,218 14,148 17,489 Asia 1,639,759 1,576,789 274,052 278,004 26,242 88,027 South Africa 478,147 532,750 399 354 235 463 Total 8,643,183 7,876,240 2,226,076 2,269,686 138,093 182,145

Revenues from external customers are presented based on the respective subsidiaries country of domicile.

32. REVENUE

All revenue of the Group relate to sale of goods.The revenue for the Company comprises dividend income from subsidiary companies.



33. RELATED PARTY TRANSACTIONS

Related parties are entities with common direct or indirect shareholders and/or directors. 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 GROUP

RelatedCompanies

Corporate groups

with common Directors/

Shareholders

KeyManagement

Personnel

June 30, 2012

Rs’000 Rs’000 Rs’000Treasury and corporate management fees 25,952 - - Amount due to 74,670 - - Amount due from 5,583 - 1,861 Short term benefits - - 75,257 Other post employment benefits 2,161 Dividend - - 2,036

RelatedCompanies

Corporate groups

with common Directors/

Shareholders

KeyManagement

Personnel

June 30, 2011

Rs’000 Rs’000 Rs’000Treasury and corporate management fees 19,383 - - Amount due to 4,934 - - Amount due from 2,491 - 3,854 Short term benefits - - 62,178 Other post employment benefits 1,991 Dividend - - 1,120

Director’s interests in an employee incentive scheme

Certain key management personnel receive benefits through employee incentive schemes. Note 18 of thesefinancial statements sets

out the details of the schemes.

THE COMPANY2012 2011

Rs’000 Rs’000Amount due from subsidiaries 173,383 100,077 Amount due to subsidiaries 374,870 360,937 Dividends from subsidiaries 103,844 57,114

Terms and conditions:

Outstanding balances at the year-end are unsecured, interest free and settlement occurs in cash.

There has been no guarantees provided except for the advances made to the Executive Directors or received for any related party

receivables or payables.

For the years ended June 30, 2012 and 2011, the Company has not recorded any impairment ofreceivables relating to amounts owed by

related parties. This assessment is undertaken each financial period through examining the financial position of the related party and the

market in which the related party operates.


34. FINANCIAL RISK MANAGEMENT AND POLICIES

The Group’s and Company’s principal financial liabilities comprise bank loans and overdrafts, finance leases and trade and other

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

Group and Company have various financial assets, such as trade and other receivables and cash and cash equivalent which arise

directly from its operations.

The Group’s and the Company’s activities, therefore, expose it to a variety of financial risks: market risk (including currency risk, cash

flow interest rate risk,) credit risk and liquidity risk. The Group’s and Company’s overall risk management programme focuses on

the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s and Company’s financial

performance. The Board of Directors reviews and agrees policies for managing each of these risks which are summarised below.

34.1 Financial risk factors

A description of the significant risk factors is given below together with the risk management policies applicable.

(a) Currency risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures primarily with

respect to British pound, Euro, US Dollar, SA Rand and Indian rupee.

Foreign exchange risk arises from future commercial transactions. The Group uses forward contracts to mitigate foreign currency

risks.

(b) Cash flow and fair value interest rate risk

The Group borrows at fixed and variable rates. In respect of the latter, it is exposed to risk associatedwith effect of fluctuations in

the prevailing label of market interest rates on its financial position and cash flows. The interest rate risk profile is on the following

main liabilities:

Bank Overdrafts- Floating 2012 2011Mauritian Rupee Prime lending rate Prime lending rateEuro Euribor + 1.5%/+ 3.0% Euribor + 1.5%/+ 3.0%United States Dollar Libor + 1.5%/+ 3.0% Libor + 1.5%/+ 3.0%

Loans - FixedMauritian Rupee Prime lending rate + 1% Prime lending rate + 1%Euro Euribor + 3% Euribor + 3%

Finance leaseMauritian Rupee 8% - 13% 10% - 13%

Bills DiscountedMauritian Rupee Prime lending rate Prime lending rateEuro Euribor + 1.5%/+ 3.5% Euribor + 1.5%/+ 3.0%United States Dollar Libor + 1.5%/+ 3.5% Libor + 1.5%/+ 3.0%

Preference SharesMauritian Rupee 5% - 9% 5% - 9%

DebenturesMauritian Rupee Bank lending rate +1.0% Bank lending rate +1.0%


34. FINANCIAL RISK MANAGEMENT AND POLICIES (CONTINUED)

34.1 Financial risk factors (continued)

At June 30, 2012, if interest rates on borrowings had been 0.05 basis points higher/lower with all other variables held constant

post-tax profit for the year would have been lower/higher as shown in the table below, mainly as a result of higher/lower interest

expense on floating rate borrowings as shown below :

Rupee-denominated borrowings THE GROUP THE COMPANY2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000Effect higher/lower on post tax profit 825 2,729 212 283

Euro-denominated borrowings THE GROUP THE COMPANY2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000Effect higher/lower on post tax profit 727 1,061 - -

USD-denominated borrowings THE GROUP THE COMPANY2012 2011 2012 2011

Rs’000 Rs’000 Rs’000 Rs’000Effect higher/lower on post tax profit 1,801 2,104 - -

(c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount

of committed credit facilities. The Group and the Company aims at maintaining flexibility in funding by keeping reliable credit lines

available. Management monitors rolling forecasts of the Group’s liquidity reserve on the basis of expected cash flow.

The table below analyses the non-derivative financial liabilities into relevant maturity groupings basedon the remaining period at

the end of the reporting period to the contractual maturity date.

THE GROUP Between3 months

and 1 yearAt

CallLess than3 months

Over1 year

Rs’000 Rs’000 Rs’000 Rs’000At June 30, 2012Borrowings 320,604 293,765 62,894 164,050 Trade and other payables 2 1,070,203 456,864 3,404

At June 30, 2011Borrowings 939,332 304,458 88,118 239,927 Trade and other payables - 1,538,167 260,267 -




34.1 Financial risk factors (continued)

THE COMPANY Between3 months

and 1 yearAt

callLess than3 months

Over1 year

Rs’000 Rs’000 Rs’000 Rs’000At June 30, 2012Borrowings 386 82 14,000 28,000 Trade and other payables - 3,729 374,870 -

At June 30, 2011Borrowings 479 77 14,000 42,000 Trade and other payables - 4,721 360,937 -

(d) Credit risk

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 the Group’s management based on prior experience and the current

economic environment.

The Group has no significant concentration of credit risk, with exposure spread over a large number of counterparties and

customers. The Group has policies in place to ensure that sales of products and services are made to customers with an appropriate

credit history.

The maximum exposure to credit risk at the end of the reporting period is equal to the carrying value of each financial asset.

(e) Fair value risk

Financial assets and liabilities, which are accounted for at historical cost, are assumed to approximatetheir fair values.




34.1Financial risk factors (continued)

The following table details the forward foreign currency (FC) contracts outstanding at the end of the reporting period:

Average Exchange

Rate 2012 2011 Contract Value Fair Value

Outstanding contracts 2012 2011 Sell Buy Sell Buy 2012 2011 2012 2011

FC’000 FC’000 FC’000 FC’000 Rs ‘000 Rs ‘000 Rs ‘000 Rs ‘000

Sell currency EUR and buy currency USD 1.27 1.42 11,382 14,461 8,943 12,729 453,573 356,369 5,918 (5,636)

Sell currency EUR and buy currency MUR 38.60 40.36 6,309 243,536 12,173 491,276 251,405 485,103 4,735 4,726

Buy currency EUR and sell currency MUR - - - - - - - - - -

Buy currency EUR and sell currency GBP 0.81 0.90 454 366 250 225 18,092 9,963 17 (9)

Sell currency GBP and buy currency USD 1.57 1.61 6,630 10,419 11,831 19,040 293,378 523,522 2,313 289

Sell currency GBP and buy currency MUR 47.20 46.09 6,704 316,441 3,175 146,351 296,652 140,494 4,213 5,298

Sell currency ZAR and buy currency EUR 12.91 - 2,272 176 - - - - 45 -

Sell currency ZAR and buy currency USD 8.19 6.90 36,062 4,405 48,491 7,030 146,413 196,874 3,093 (813)

Sell currency ZAR and buy currency MUR 3.65 4.07 142,173 519,094 134,232 546,183 577,222 544,984 11,851 6,286

Sell currency USD and buy currency MUR 30.11 27.95 5,823 175,337 1,667 46,575 159,946 45,781 1,042 (1,016)

Sell currency USD and buy currency INR 54.99 46.38 3,170 174,320 2,030 94,157 100,722 54,404 (4,180) -

Sell currency GBP and buy currency INR 87.33 74.22 818 71,437 1,395 103,532 41,276 59,821 (461) -

Sell currency EUR and buy currency INR 68.84 64.20 1,495 102,911 8,991 577,254 59,462 333,538 (1,576) -

Total 27,010 9,125

At June 30, 2012, if rupee had weakened/strengthened by 5% against Euros/GBP/US Dollar with all other variables held constant, post tax profit for the year would

have been Rs. 8,443,000 (2011: Rs. 8,040,000) higher/lower as a result of foreign exchange gains/losses on translation of Euros/GBP/US Dollar denominated trade

receivables, trade payables and borrowings and is as follows:2012 2011

Rs ‘000 Rs ‘000

Euros 10,452 7,617

GBP 415 7,861

US Dollar (23,804) (23,518)

(12,937) (8,040)


34.2 Fair value estimation of financial instruments

The fair value of financial instruments traded in active markets is based on quoted market prices at the endof the reporting period. The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Group uses a variety of methods namely the capitalised earnings, net asset basis and dividend yield and makes assumptions that are based on market conditions existing at the end of each reporting date.

The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values.

The fair value of those financial assets and liabilities not presented on the Group’s statements of financial position at the fair values are not materially different from their carrying amounts.

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 fair value, 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 and 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); and

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).

THE GROUP AND THE COMPANY

Level 1 Level 2 Level 3As at June 30, 2012 Rs’000 Rs’000 Rs’000

Available-for-sale financial assets - - 3,477 Forward exchange contracts - 27,010 -

Total - 27,010 3,477

As at June 30, 2011

Available-for-sale financial assets - - 3,243 Forward exchange contracts - 9,125 -

Total - 9,125 3,243

34.3 Capital risk management

The primary objectives of the Group and Company, when managing capital, are to safeguard the entity’s ability to continue as a going concern in order to provide returns for shareholders andbenefits for other stakeholders and to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.The Group and the Company manage its capital structure and make adjustment to it, in light of changes in economic conditions. In order to maintain or adjust the capital structure, the Group and the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. No changes were made in the objectives, policies or processes during the years ended June 30, 2012 and June 30, 2011.

The Group and the Company monitors capital on the basis of the debt-to-capital ratio. This ratio is calculated as net debt adjusted capital. Net debt is calculated as total debt (as shown in the statement of financial position) less cash and bank balances.

Adjusted capital comprises all components of equity (i.e. share capital, non-controlling interests, retained earnings, revaluation surplus and the redeemable preference shares).

The gearing ratios at June 30, 2012 and June 30, 2011 were as follows:


Rs’000 Rs’000 Rs’000 Rs’000

Total debt (note 15) 813,659 1,448,253 42,468 56,556 Less: cash and bank balances (note 27(b)) (241,768) (198,207) (9,355) (7,957)Net Debt 571,891 1,250,046 33,113 48,599 Total equity 3,052,924 3,103,741 894,397 886,794 Gearing Ratio 18.73% 40.28% 3.70% 5.48%



35. PRIOR YEAR RESTATEMENT

In 2011, the Group income statement has been restated to afford a proper and more meaningful comparison of results as set out in the affected notes to the financial statements, and to be compliantwith the relevant IFRS. The 2011 Group income statement was restated as follows:

- Exchange differences have been reclassified from cost of sales to ‘other operating (losses)/income’;

- Government grants related to income have been reclassified from ‘cost of sales’ to ‘other operating (losses)/income) in accordance with IAS 20;

- Interest income has been reclassified from ‘other operating (losses)/income’ to finance income;

- Earnings per share calculations have been restated to exclude the preference dividends of Rs. 22,447,000 included in equity, in compliance with IAS 33.

The impact of the above restatements is best illustrated in the table below.

As PreviouslyStated Reclassifications As RestatedRs’000 Rs’000 Rs’000

Cost of sales (6,611,417) 104,054 (6,507,363)

Other operating (losses)/income 77,719 (108,247) (30,528)

Administrative and sellings expenses (994,583) (149) (994,732)

Net finance costs (99,101) 4,342 (94,759)

Basic and diluted earnings per share Rs. 2.07 1.86

The above prior year restatement has no impact on the profit for the year and on the statement of financial position. No statement of financial position was therefore necessary at the beginning of the earliest comparative period, that is, July 01, 2010.

36. THREE YEAR SUMMARYRestated Restated

2012 2011 2010Rs’000 Rs’000 Rs’000

(a) THE GROUP

Stated capital/Issued and paid up share capital 685,865 685,865 685,865 Retained earnings 1,534,899 1,178,885 1,084,597 Other reserves 654,653 636,733 681,817

Amount attributable to owners 2,875,417 2,501,483 2,452,279

Profit before taxation 610,679 231,582 284,811

Profit for the year 515,888 214,467 229,460

Dividends to Ordinary Shareholders 101,808 55,994 45,813

(b) THE COMPANY 2012 2011 2010Rs’000 Rs’000 Rs’000

Stated capital/Issued and paid up share capital 685,865 685,865 685,865 Revaluation surplus 121,396 113,500 113,500 Retained earnings 87,136 87,429 87,084

Total equity 894,397 886,794 886,449

Profit before taxation 104,008 57,024 62,530

Profit for the year 101,515 56,339 63,160

Dividends to Ordinary Shareholders 101,808 55,994 45,813


I/We

of

being a shareholder(s) of CIEL Textile Limited (the Company) hereby appoint

of

or, failing him/her

of

as my/our proxy to represent me/us and vote for me/us and on my/our behalf at the Annual Meeting of the shareholders of the Company to be held on

December 12, 2012 at 14:00 hours at the Company’s Registered Office, 5th Floor, Ebène Skies, Rue de l’Institut, Ebène and at any adjournment thereof.

I/We direct my/our proxy to vote in the following manner. (Please vote with a tick)

Signed this day of 2012.

Signature/s

Notes:

1. Any member entitled to attend and vote at the Meeting may appoint a proxy, whether a member or not, to attend and vote in his stead.

2. Proxy forms should be deposited at the Registered Office of the Company, Attention: The Secretary, at 5th Floor, Ebène Skies, rue de l’Institut, Ebène not less

than twenty-four (24) hours before the Meeting.

3. If the proxy form is returned without an indication as to how the proxy shall vote on any particular resolution, the proxy will exercise his discretion as to whether,

and if so, how he votes.

Proxy Form

RESOLUTIONS FOR AGAINST ABSTAIN


4. To appoint Mr. Maurice P. Dalais as Director of the Company.

5. To appoint Mr. Roger Espitalier Noël as Director of the Company.

6. To take note of the automatic re-appointment of Messrs. PricewaterhouseCoopers as external auditors in accordance with Section 200 of the Companies Act 2001 and to authorise the Directors to fix their remuneration.

7. To ratify the remuneration paid to the auditors for the year endedJune 30, 2012.


Posta l Vote

I/We

of

being a shareholder(s) of CIEL Textile Limited (the Company), do hereby cast my/our vote by post, by virtue of clause 19.10 of the Constitution of the Company, for

the Annual Meeting of the Shareholders of the Company to be held on December 12, 2012 at 14:00 hours at the Company’s Registered Office, 5th Floor, Ebène

Skies, Rue de l’Institut, Ebène and at any adjournment thereof.

I/We desire my/our vote to be cast on the Resolutions as follows: (Please vote with a tick)

Signed this day of 2012.

Signature/s

Notes:

The duly signed postal vote should reach the Registered Office of the Company (attention: The Secretary, at 5th Floor, Ebène Skies, Rue de l’Institut, Ebène),

forty-eight (48) hours before the Meeting.

RESOLUTIONS FOR AGAINST ABSTAIN


4. To appoint Mr. Maurice P. Dalais as Director of the Company.

5. To appoint Mr. Roger Espitalier Noël as Director of the Company.

6. To take note of the automatic re-appointment of Messrs. PricewaterhouseCoopers as external auditors in accordance with Section 200 of the Companies Act 2001 and to authorise the Directors to fix their remuneration.

7. To ratify the remuneration paid to the auditors for the year endedJune 30, 2012.


Notes

www.cielgroup.com downloads ciel textile annual report 2012

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