Downloads CIEL Textile 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 Companys Registered Office, 5th Floor, Ebne Skies, Rue de llnstitut, Ebne. Yours faithfully,
P. Arnaud Dalais Chairman
CIEL Textile Limited Annual Report 2012
Contents
04
Notice of Annual Meeting
06
Group Profile
08
Group Structure
10
Corporate Information
12
14
Group Financial Chairmans Highlights and Ratios Statement
50
Company Secretarys Certificate
51
Independent Auditors Report
53
Statements of Financial Position
54
Income Statements
55
Statements of Comprehensive Income
57
Statements of Changes in Equity
2 CIEL Textile Limited Annual Report 2012
16
Key Dates
18
Executives Report
30
32
44
49
Corporate Corporate Social and Governance Report Environmental Responsibility
Other Statutory Statement of Disclosures Directors Reponsibilities
58
Statements of Cash Flows
59
Notes to the Financial Statements
115
Proxy Form
117
Postal Vote
Notice of
Annual
Meeting
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, Ebne Skies, Rue de lInstitut, Ebne. 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 Groups and the Companys audited financial statements for the year ended June 30, 2012. 4. To appoint Mr. Maurice P. Dalais1 as Director of the Company. 5. T o appoint Mr. Roger Espitalier Nol1 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, ACIS Per 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, Ebne Skies, Rue de lInstitut, Ebne 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) T he 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.
5.1
Annual production
million
sweaters
and 1,600 tonnes of yarns
Knitwear:
Floreal Knitwear Ltd Floreal Madagascar SA Floreal International Ltd Ferney Spinning Mills Ltd Ajax Sweaters Ltd
Group Profile
CIEL Textile Limited is the holding company of the CIEL Groups textile cluster. Through its subsidiaries, it is involved in three types of textile and apparel activities:
12
Knits:
Annual production
million
knitted shirts
12
Annual production
million
woven shirts
and 3,500 tonnes of knitted fabric
and 7.2 million metres of woven fabric
Woven:
Aquarelle Clothing Ltd Aquarelle International Ltd Consolidated Fabrics Ltd New Island Clothing Ltd Aquarelle (India) Private Ltd Aquarelle Madagascar SA Laguna Clothing Ltd
Tropic Knits Ltd TKL International Ltd Tropic Mad SA Consolidated Dyeing & Fabrics Ltd
Group Structure
June 30, 2012
Woven
Knits
100% Aquarelle Clothing Ltd
100% Tropic Knits Ltd 82.97% Consolidated Dyeing & Fabrics Ltd 17.03%
100% Industrial Consultancy Services Ltd
50%
New Island Clothing Ltd
100%
Consolidated Fabrics Ltd
100% Aquarelle International Ltd
100%
TKL International Ltd
80% International Fabrics Ltd 99.9% Aquarelle Madagascar S.A 20% Laguna Clothing Ltd 33.3% 33.3% 33.3% Tinka International Ltd Texaro SA 83.52% 99.98% Socit Soboma
98.80%
100%
100%
49.93%
Azzurri Aquarelle India New Island (Private) Ltd Clothing Company Ltd Madagascar SA
80% Tropic Mad S.A
C IE L Tex t il e L im i ted
Ciel Investment Limited

Knitwear Property Retail Other
100%
100% Ferney Spinning Mills Ltd
100% Floreal Knowledge Centre Ltd
100%
100%
Floreal Knitwear Ltd
Floreal Manufacturing Ltd
CTL Retail Ltd
Infoclick Consulting Co Ltd
De Nyon Ltd
100% Floreal International Ltd
SA
0.20%
99.80% Socit Civile Immobilire des Mascareignes 99.9% 0.10% 33.33% 33.33%33.33% 22% Harris Wilson Textiles S.A. (France)
99.48%
0.22%
Floreal Madagascar S.A
Ajax Sweaters Ltd
Cieltex S.A Pty Ltd
International Companies
GBL 1 Companies
Local Companies
100%
100%
Information
BOARD OF DIRECTORS
Corporate
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 Pitray Roger Espitalier Nol (as from June 18, 2012) P. Jrme Lagesse J. Harold Mayer Didier Merven (up to September 5, 2011) Alain Rey Eddy Yeung Kan Ching Jrme De Chasteauneuf (Alternate to P. Arnaud Dalais)
BOARD COMMITTEES CORPORATE GOVERNANCE, REMUNERATION AND NOMINATION COMMITTEE Henri de Simard de Pitray (Chairman) P. Arnaud Dalais Antoine Delaporte AUDIT AND RISK COMMITTEE Alain Rey (Chairman) Jrme De Chasteauneuf P. Jrme Lagesse
FINANCIAL & SECRETARIAL SERVICES CIEL Corporate Services Ltd 5th Floor, Ebne Skies, Rue de linstitut, Ebne Mauritius Tel: (230) 404 2200 Fax: (230) 404 2201 TREASURY SERVICES Azur Financial Services Limited REGISTRAR AND TRANSFER OFFICE If 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 Limited Raymond Lamusse Building 9-11, Sir William Newton Street Port Louis Tel: (230) 202 5397 Fax: (230) 208 1167 REGISTERED OFFICE 5th Floor, Ebne Skies Rue de lInstitut Ebne Tel: (230) 404-2200 Fax: (230) 404-2201 Email: info@cielgroup.com
MAIN BANKERS The Mauritius Commercial Bank Limited The Hong Kong and Shanghai Banking Corporation Limited Barclays Bank Plc Bank One Ltd Standard Bank (Mauritius) Ltd The State Bank of Mauritius Ltd EXTERNAL AUDITORS PricewaterhouseCoopers 18 CyberCity Ebne Tel: (230) 404-5000 Fax: (230) 404-5588/89 INTERNAL AUDITORS BDO & Co DCDM Building 10, Frre Flix de Valois Street Port Louis Tel: (230) 202-3000 Fax: (230) 202-9993 NOTARY Etude Montocchio dHotman LEGAL ADVISORS Etude de Comarmond-Koenig Me. Maxime Sauzier, Bar-at-Law Me. Patrice Doger de Spville, Bar-at-Law
11
Group Financial Highlights and Ratios

As at June 30
THE GROUP
2012 2011 7,876 232 214 56 (299) 170 2,501 3,526 1,250 99 2010 7,054 287 229 46 405 215 2,452 3,523 712 84 2009 6,863 84 49 38 337 187 2,101 2,994 909 106 2008 6,523 129 127 51 190 216 2,139 3,013 985 132
FINANCIAL HIGHLIGHTS
Turnover (Rs. M) Profit before Taxation (Rs. M) Profit after Taxation (Rs. M) Ordinary Dividends Paid (Rs. M) Net Cash Flow from Operations (Rs. M) Capital Expenditure (Rs. M) Shareholders Funds (Rs. M) Capital Employed (Rs. M) Net Borrowings (Rs. M) Interest Expense (Rs. M) 8,643 611 516 102 1,003 126 2,875 3,453 572 93
LIQUIDITY AND GEARING RATIOS

Current Ratio Acid Test Ratio Net Borrowings to Shareholders Funds Ratio Interest Cover (times) 1.43 0.69 0.20 7.57 1.39 0.68 0.50 3.34 1.42 0.78 0.29 4.42 1.32 0.76 0.43 1.79 1.26 0.67 0.46 1.98
PROFITABILITY
Return on Capital Employed (%) Return on Shareholders Funds (%) Net Profit Margin (%) 20.4 17.2 6.0 9.4 7.7 2.7 10.5 8.4 3.2 6.3 1.3 0.7 8.7 4.9 1.9
TURNOVER (Rs. M)
9, 000 8, 000 7, 000 6, 000 5, 000 4, 000 3, 000 2, 000 1, 000 0 2008 2009 2010 2011 2012
PROFIT AFTER TAXATION (Rs. M)
700 600 500 400 300 200 100 0 2008 2009 2010 2011 2012
RETURN ON CAPITAL EMPLOYED
NET BORROWINGS (Rs. M)

1,300 1,200 1,000 900
25 20 % 15 10 5 0 2008 2009 2010 2011 2012
800 700 600 500 400 0 2008 2009 2010 2011 2012
NET PROFIT MARGIN

7 6 5 % 4 3 2 1 0 2008 2009 2010 2011 2012
Chairmans
Statement
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 Results As 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 years 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 years results. The Groups 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. Outlook External 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. Dividend It 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 Ltd Floreal 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 Ltds 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 Floreals 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. Appreciation On 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 Nol 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 Executives Report for information on the operations of the different clusters of the Group. P. Arnaud Dalais Chairman September 26, 2012
15
CIEL Textile key dates
1971
Incorporation of Floreal Knitwear Ltd and construction of the factory in Mangalkhan.
1988
Floreal Knitwear Ltd takes over Rockwood Textiles Ltd (manufacturer of sweaters) and Tropic Knits Ltd (manufacturer of t-shirts). CIEL buys New Island Clothing Ltd (manufacturer of woven shirts).
1972
First export of sweaters to Europe.
1973
Acquisition of Floreal Knitwear Ltd by Sir Pierre Dalais on behalf of CIEL.
1990
Beginning of the Group's regional expansions. Floreal Knitwear Ltd starts operating in Madagascar.
1978
Creation of Ferney Spinning Mills Ltd and vertical integration with Floreal Knitwear Ltd.
1993
Tropic Knits Ltd opens a factory in Madagascar.
1980
Creation of Dyers & Finishers Ltd for dyeing wool.
1994
Launch of Aquarelle Clothing Ltd (shirt manufacturer).
2006
Creation of Pastel Blue Ltd (production of blouses for Women).
2007
Aquarelle Clothing Ltd and Floreal Knitwear Ltd start outsourcing their operations in Bangladesh.
1995
Aquarelle Clothing Ltd starts its operations in Madagascar renamed Consolidated Fabrics Ltd production of fabrics for shirts.
2010
Opening of Laguna Clothing Ltd, a partnership of Aquarelle Clothing Ltd with Tessitura Monti Spa, in Kanakapura near Bangalore, India. Floreal Knitwear Ltd starts its operations in its own factory in Bangladesh.
1997
Acquisition of Essar Textiles Ltd, renamed Consolidated Fabrics Ltd - production of fabrics for shirts.
2012
CIEL Textile Ltd produces 30 million sweaters, T-shirts and shirts. It employs 17,000 people in four different countries, namely Mauritius, Madagascar, India and Bangladesh. Its annual turnover is Rs. 8.6Bn and all businesses, both in Mauritius and abroad, are profitable, generating Rs. 515M profits after tax.
2001
Creation of CIEL Textile Ltd.
2 0 0 2 / 2 003
Capital and debt restructuring of CIEL Textile Ltd following a major political and social crisis in Madagascar.
2005
Aquarelle Clothing Ltd starts its operations in India.
17
Executives
Report
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 Groups profitability. Overall, the Groups 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 turnovers growth was achieved in Asia, whilst the lion share of profit growth was attributable to Aquarelle Groups 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 Groups 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 Groups turnover. The globalisation of Aquarelle Groups 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.
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. T he 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 KPIs 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 Groups 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.
19
Executives Report (Contd)
External Factors Globally 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 awish 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 Strategy Our 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 Aquarelles 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. Outlook The 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 Mayer Chief Executive Officer September 26, 2012
21
KNITS
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 mills 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 also given 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.
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. CDFLs 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 companys 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 Spville, 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
23
KNITWEAR
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: Mauritius 662,000 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 Madagascars and Bangladeshs operations. Madagascar 3,072,000 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. Bangladesh Our 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.
China Although 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 Future Due 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.
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.
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. Ferneys 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 Ferneys strategy of value innovation. The weaving and knitting collections of 2012 reflected Ferneys strategy with competitive and innovative blends for volume business with the right colour forecasts.
Jean-Baptiste de Spville, Chief Executive Officer of the Knits and Knitwear clusters Mushtaq Sooltangos, General Manager of FSM
25
WOVEN
The woven clusters 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 Executives 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 pieces It 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 Bangladeshs performance to the rest of the Group.
Formal Shirt: Laguna Clothing Limited (India) and New Island Clothing Limited (Mauritius) - 3.5M pieces 2011/2012 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 pieces 2011/2012 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 metres We 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 CFLs 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.
Outlook The 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
27
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.
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iate here
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29
CSER
Corporate Social
a n d E nv iro n m e nta l Re sp o n sib il i t y
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 Valle 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 Regard Accredited 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 Regards action this year. At the end of 2010, FNR launched a large-scale integrated community development project in partnership with Caritas: La Caze Lespwar.
education
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20%
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52%
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 Environment Sport 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 Valle 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 Valle de Ferney. The field station will also provide study experience opportunities to local nature NGOs, University of Mauritius students and foreign researchers.
31
Corporate Report
Governance
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 CTLs 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 Companys Constitution is available upon request in writing to the Company Secretary at the Registered Office of the Company, 5 th Floor, Ebne Skies, Rue de lInstitut, Ebne. 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. 3,500,1 00 represented by 100 Redeemable B shares. Shareholders holding more than 5% of ordinary shares of the Company at June 30, 2012, were: Shareholder Deep River Investment Limited IP Textile Holding Limited Pershing LLC CIEL Investment Limited Number of Shares Held 26,1 64,1 11 26,1 64,1 12 6,739,600 6,358,461 % Held 25.70 25.70 6.62 6.25
You may refer to page 8 for a detailed Group structure including the subsidiaries and associates of the Company.
33

Common Directors The names of the common Directors within the holding structure as at reporting date are as follows: CTL P. Arnaud Dalais Maurice P. Dalais Antoine Delaporte Roger Espitalier Nol P. Jrme 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) 1 - 500 501 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 50,000 50,001 - 100,000 100,001 - 250,000 250,001 - 500,000 500,001 - 1,000,000 Over 1,000,000 Total Number of Shareholders 820 162 410 126 243 56 48 9 6 10 1,890 Number of Shares Owned 108,633 123,662 1,055,383 915,583 5,700,816 3,862,219 7,624,732 2,702,019 4,900,572 74,813,970 101,807,589 % Holding 0.1 1 0.1 2 1.04 0.90 5.60 3.79 7.49 2.65 4.81 73.49 100.00 * ** Deep River Investment Limited IP Textile Holding Limited
Summary by Shareholder Category The ownership of ordinary share capital by category of shareholding was as follows as at June 30, 2012: Number of Shareholders 1,666 8 21 33 162 1,890 Number of Shares Owned 24,282,701 1,697,345 2,831,821 34,774,955 38,220,767 101,807,589 % Holding 23.85 1.67 2.78 34.1 6 37.54 100.00
Category Individuals Insurance & Assurance Companies Pensions and Provident Funds Investment and Trust Companies Other Corporate Bodies Total
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 Groups website, www.cielgroup.com. Shareholders are invited to attend the Companys Annual Meeting, which remains the ideal forum for discussions with the Directors and the management team. The calendar of events is as follows: Event Financial year end Last Annual Meeting of the shareholders Declaration of dividend (for the financial year ended June 30, 2012): - Interim - Final Publication of first quarter results Publication of half yearly results Publication of third quarter results Publication of full year results February June November February May September Month June December
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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 Companys and Groups 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 Companys 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. Dalais Non-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 Delaporte Non-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 Companys Corporate Governance, Nomination and Remuneration Committee of the Company. Directorship in listed companies in Mauritius: Vivo Energy Mauritius Limited Roger Espitalier Nol Non-Executive Director Mr. Roger Espitalier Nol 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 Pitray Independent Director Mr. Henri de Simard de Pitray was appointed Director of the Company on October 27, 2003. For the past 8 years, he has beena member of the Board of Spencer Stuart inc., one of the leadingglobalexecutive search firms, of which he also chaired the Governance Committee.Hecurrently 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. Jrme Lagesse Non-Executive Director Mr. P. Jrme 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. Directorship in listed companies in Mauritius: None J. Harold Mayer Executive 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. Directorship in listed companies in Mauritius: None Alain Rey Independent 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 Sucrire de Mont Choisy and has a long experience in the textile industry. He is the Chairman of the Companys Audit and Risk Committee. Directorship in listed companies in Mauritius: State Bank of Mauritius Ltd
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Eddy Yeung Kan Ching Independent 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 Jrme De Chasteauneuf Alternate Director Mr. Jrme 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 Groups restructuring in 2001. He is a member of the Companys 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 Mayer Chief Executive Officer Please refer to page 37. Eric Dorchies Chief Executive Officer of the Woven cluster Holder of a diploma from the Ecole Suprieure 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 Spville Chief 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 Spville 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 Companys and Groups audited financial statements, approved the Companys and Groups 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: Directors P. Arnaud Dalais, Chairman G. Christian Dalais* Maurice P. Dalais** Antoine Delaporte Roger Espitalier Nol** Henri de Simard de Pitray P. Jrme Lagesse J. Harold Mayer Alain Rey Eddy Yeung Kan Ching Number of Meetings Attended 3 out of 3 3 out of 3 1 out of 3 3 out of 3 1 out of 3 3 out of 3 3 out of 3 3 out of 3 2 out of 3 2 out of 3
* Mr. G. Christian Dalais resigned on June 18, 2012 ** Messrs. Maurice P. Dalais and Roger Espitalier Nol 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: Members Alain Rey, Chairman Jrme De Chasteauneuf P. Jrme Lagesse 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 Companys internal control and risk management systems; (iii) Monitor and supervise the effective function of the internal audit; and (iv) O versee the process for selecting the external auditor, assesses the continuing independence of the external auditor and approve the audit fees. Number of Meetings Attended 4 out of 4 4 out of 4 4 out of 4
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The Committee examined and made recommendations to the Board on the Companys 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. Jrme Lagesse (Chairman), Jrme 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: Members Henri de Simard de Pitray P. Arnaud Dalais Antoine Delaporte Number of Meetings Attended 2 out of 2 2 out of 2 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 Nol and Maurice P. Dalais as additional Directors in light of Messrs. Didier Mervens 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 Director P. Arnaud Dalais G. Christian Dalais Maurice P. Dalais Antoine Delaporte Roger Espitalier Nol Henri de Simard de Pitray Patrice Jrme Lagesse J. Harold Mayer Alain Rey Eddy Yeung Kan Ching Jrme De Chasteauneuf (Alternate to P. Arnaud Dalais) The Directors did not acquire or sell Companys 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 Companys 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 Groups and Companys 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 Groups and Companys financial performance. A description of the risk factors is given in the financial statements as well the risk management policies which have been applied. Direct Shareholding Number of Shares 1,813,840 106,729 5,000 1,778,259 3,052 13,1 40 418 Indirect Shareholding Number of Shares 1,550,097 100,000 56,723 95,578 2,389 -
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Statement of Remuneration Philosophy The Groups 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 Groups 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 Companys 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 Groups 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 Companys 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 July 31, 2011 August 31, 2011 September 30, 2011 October 31, 2011 November 30, 2011 December 31, 2011 January 31, 2012 February 29, 2012 March 31, 2012 April 30, 2012 May 31, 2012 June 30, 2012 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 Groups 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 Groups 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. Share Price - Rs . 15.90 15.60 15.30 15.20 15.90 15.40 15.50 14.70 14.80 15.00 16.00 16.00
Clothilde de Comarmond ACIS Per CIEL Corporate Services Ltd Company Secretary September 26, 2012
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Other Statutory Disclosures (Pursuant to Section 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 2012 Executive Directors Non-Executive & Independent Directors Rs.000 Nil 1,470 2011 Rs.000 Nil 1,630 2012 Rs.000 32,501 1,540 2012 Executive Directors of Subsidiaries Rs.000 35,428 Subsidiaries 2011 Rs.000 21,692 1,540 2011 Rs.000 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 Dora Brochetto Elvis Cateaux Firdhose Coovadia Sanjay Kumar Chooromoney P. Arnaud Dalais Aquarelle Clothing Ltd Aquarelle India (Private) Ltd Aquarelle International Ltd Aquarelle Madagascar SA Consolidated Dyeing and Fabrics Ltd Consolidated Fabrics Ltd CTL Retail Ltd De Nyon Ltd Ferney Spinning Mills Ltd Floreal International Ltd Floreal Knitwear Ltd Floreal Knowledge Centre Ltd Floreal Madagascar SA Floreal Manufacturing Ltd Industrial Consultancy Services Ltd Infoclick Consulting Co. Ltd International Fabrics Ltd New Island Clothing Ltd New Island Clothing Madagascar SA TKL International Ltd Tropic Knits Ltd Tropic Mad SA Aquarelle India (Private) Ltd Cieltex SA Pty Ltd New Island Clothing Madagascar SA Consolidated Fabrics Ltd Ajax Sweaters Ltd
Jrme De Chasteauneuf (Contd)
Consolidated Fabrics Ltd (Alt Dir of Eddy Yeung Kan Ching) CTL Retail Ltd De Nyon Ltd Ferney Spinning Mills Ltd Floreal International Ltd Floreal Knitwear Ltd Floreal Madagascar SA Floreal Manufacturing Ltd Infoclick Consulting Co. Ltd TKL International Ltd Tropic Knits Ltd Tropic Mad SA
Antoine Delaporte
Aquarelle Clothing Ltd Consolidated Dyeing and Fabrics Ltd Consolidated Fabrics Ltd CTL Retail Ltd Ferney Spinning Mills Ltd Floreal Knitwear Ltd Tropic Knits Ltd
Stphane de Rosnay
Aquarelle Madagascar SA Floreal Madagascar SA New Island Clothing Madagascar SA Tropic Mad SA
Jean-Baptiste Doger de Spville
Consolidated Dyeing and Fabrics Ltd Ferney Spinning Mills Ltd Floreal International Ltd Floreal Knitwear Ltd TKL International Ltd Tropic Knits Ltd Tropic Mad SA
Eric Dorchies Jrme De Chasteauneuf Aquarelle Clothing Ltd Ajax Sweaters Ltd Aquarelle International Ltd Aquarelle Madagascar SA Consolidated Dyeing and Fabrics Ltd
Aquarelle Clothing Ltd Aquarelle India (Private) Ltd Aquarelle International Ltd Aquarelle Madagascar SA Consolidated Fabrics Ltd
45
Eric Dorchies (Contd) International Fabrics Ltd Laguna Clothing Ltd New Island Clothing Ltd New Island Clothing Madagascar SA Tinka International Ltd Roger Espitalier Nol J. Harold Mayer Aquarelle Clothing Ltd Aquarelle India (Private) Ltd Aquarelle International Ltd Aquarelle Madagascar SA Consolidated Dyeing and Fabrics Ltd Consolidated Fabrics Ltd CTL Retail Ltd Aquarelle Madagascar SA Floreal Madagascar SA New Island Clothing Madagascar SA Tropic Mad SA Sarbajit Ghose Laguna Clothing Ltd New Island Clothing Ltd Uday Kumar Gujadhur Consolidated Fabrics Ltd International Fabrics Ltd Franoise Ip Aquarelle Madagascar SA Ajax Sweaters Ltd Floreal Madagascar SA Tropic Mad SA Rajesh Kumar P. Jrme Lagesse (Alternate Director of Antoine Delaporte) Laguna Clothing Ltd De Nyon Ltd Ferney Spinning Mills Ltd Floreal International Ltd Floreal Knitwear Ltd Floreal Knowledge Centre Ltd Floreal Madagascar SA Floreal Manufacturing Ltd Industrial Consultancy Services Ltd Infoclick Consulting Co. Ltd International Fabrics Ltd Laguna Clothing Ltd New Island Clothing Ltd New Island Clothing Madagascar SA Tinka International Ltd TKL International Ltd Tropic Knits Ltd Tropic Mad SA Bruno Monti Aquarelle Clothing Ltd Consolidated Dyeing and Fabrics Ltd CTL Retail Ltd Ferney Spinning Mills Ltd Floreal Knitwear Ltd Tropic Knits Ltd Neera Munisamy Nicolas Maigrot Ferney Spinning Mills Ltd Floreal Knitwear Ltd Bertrand Rivalland Aquarelle Madagascar SA Ajax Sweaters Ltd Cieltex Pty SA Floreal Madagascar SA Tropic Mad SA Ajax Sweaters Ltd Manuel Monti New Island Clothing Ltd Paolo Monti Laguna Clothing Ltd Laguna Clothing Ltd New Island Clothing Ltd
Vaidyanathan Pudugramam Venkata Subramanian Bertrand Thevenau
Eddy Yeung Kan Ching (Contd) Aquarelle India (Private) Ltd Tropic Knits Ltd Tropic Mad SA De Nyon Ltd Ferney Spinning Mills Ltd Floreal International Ltd Floreal Knitwear Ltd Floreal Manufacturing Ltd TKL International Ltd Tropic Knits Ltd Aquarelle Clothing Ltd Aquarelle International Ltd Consolidated Dyeing and Fabrics Ltd Consolidated Fabrics Ltd CTL Retail Ltd Pascal Walter Consolidated Fabrics Ltd
Eddy Yeung Kan Ching
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) 2012 Political Others 2011 Subsidiaries (Rs. 000) 2012 283 44 2011 67 668
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.
47
External Audit Fees External audit fees for the year were as follows: The Company (Rs.000) 2012 Audit fees paid to: PricewaterhouseCoopers Deloitte Overseas auditors Fees paid for other services provided by: PricewaterhouseCoopers* BDO & Co** Overseas auditors 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 35 725 760 10 800 810 1,300 300 408 2,008 890 75 471 1,436 475 475 450 450 5,025 2,547 7,572 4,550 325 2,268 7,1 43 2011 Subsidiaries (Rs.000) 2012 2011
P. Arnaud Dalais Chairman
Antoine Delaporte Director
September 26, 2012
Statement of Directors Responsibilities

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
P. Arnaud Dalais Chairman Antoine Delaporte Director
September 26, 2012
49
Company Secretarys Certificate

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, ACIS Per CIEL Corporate Services Limited Company Secretary September 26, 2012
Independent Auditors Report To the Shareholders of CIEL Textile Limited

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 Groups and the Companys 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 Companys 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.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance 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 auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys 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 entitys 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.
51
Independent Auditors Report (Contd) To the Shareholders of CIEL Textile Limited

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 Companys 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 Financial Position As at June 30, 2012

Notes ASSETS Non-current assets Property, plant and equipment Intangible assets Investments in: - Subsidiary companies - Associates - Available for sale investments Non-current receivables Deferred income tax assets Current assets Inventories Trade and other receivables Cash in hand and at bank Non-current assets classified as held for sale TOTAL ASSETS EQUITY AND LIABILITIES Capital and reserves Share capital Revaluation and other reserves Retained earnings Owners interest Non-controlling interests Redeemable preference share capital Total equity Non-current liabilities Borrowings Deferred income tax liabilities Retirement benefit obligations Employee benefit liability Current liabilities Trade and other payables Borrowings Redeemable preference share capital Current income tax liabilities Employee benefit liability Dividends payable Total liabilities TOTAL EQUITY AND LIABILITIES
P. Arnaud Dalais Chairman Antoine Delaporte Director
2012 Rs000 2,200,185 9,416 3,477 3,477 12,998 32,628 2,258,704 2,036,376 1,643,122 241,768 3,921,266 22,366 6,202,336
THE GROUP 2011 Rs000 2,254,289 4,463 3,243 3,243 7,691 21,1 32 2,290,818 2,214,719 1,931,655 198,207 4,344,581 22,366 6,657,765
THE COMPANY 2012 2011 Rs000 Rs000 115,460 1,101,861 3,477 1,105,338 1,220,798 175,529 9,355 184,884 1,405,682 108,593 1,1 01,861 3,243 1,1 05,1 04 1,213,697 138,957 7,957 146,914 1,360,611
3 4 5 6 7 8 9 10 11
12
13
14
685,865 654,653 1,534,899 2,875,417 177,507 3,052,924 149,852 175,519 74,791 400,162 1,530,473 663,807 404,937 48, 761 9,760 91,512 2,749,250 3,149,412 6,202,336
685,865 636,733 1,1 78,885 2,501,483 153,321 448,937 3 ,1 0 3 , 741 199,826 148,097 64,663 9,659 422,245 1,798,434 1,248,427 18,177 8,661 58,080 3,1 31,779 3,554,024 6,657,765
685,865 121,396 87,136 894,397 894,397 28,000 18,883 46,883 378,599 14,468 70 71,265 464,402 511,285 1,405,682
685,865 113,500 87,429 886,794 886,794 42,000 15,970 57,970 365,658 14,556 35,633 415,847 473,817 1,3 60,611
15 9 17 18
19 15 14 20 18 26
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.
53
Income Statements Year Ended June 30, 2012

THE GROUP Restated Notes 2012 Rs000 Revenue Cost of sales Gross profit Other operating (losses)/income Fair value movement on outstanding forward exchange contracts Administrative and selling expenses 17,885 (1,063,003) 698,311 Finance income Finance costs Net finance costs Impairment of investment in associate Share of results of associates Profit before taxation Taxation Profit for the year 20 24 12 6 5,483 (93,115) (87,632) 610,679 (94,791) 515,888 9,125 (994,732) 352,742 4,342 (99,101) (94,759) (27,271) 870 231,582 ( 1 7,1 1 5 ) 214,467 (45) 106,234 4,419 (6,645) (2,226) 104,008 (2,493) 101,515 (59) 59,015 7,1 1 6 ( 9 ,1 0 7 ) (1,991) 5 7, 0 2 4 (685) 56,339 21 31 8,643,183 (6,865,232) 1,777,951 (34,522) 2011 Rs000 7,876,240 (6,507,363) 1,368,877 (30,528) THE COMPANY Restated 2012 Rs000 103,844 103,844 2,435 2011 Rs000 5 7,1 1 4 5 7,1 1 4 1,960
2012 Rs'000 Profit attributable to : Owners of the company Non-controlling interests Basic and diluted earnings per share 25 Rs. 476,269 39,619 515,888 4.50
2011 Rs'000 210,465 4,002 214,467 1.86
Statements of Comprehensive Income Year Ended June 30, 2012

THE GROUP 2012 Rs000 2011 Rs000 THE COMPANY 2012 Rs000 2011 Rs000
Profit for the year
515,888
214,467
101,515
56,339
Other comprehensive income Revaluation surplus (Note 16) Deferred tax on revaluation reserve (Note 9(a)) Movement on reserves of associates Translation differences on foreign subsidiaries Other comprehensive income/(loss) for the year Total comprehensive income for the year 56,261 (5,299) (33,565) 17,397 533,285 10,406 (4,285) 1,600 (61,503) (53,782) 160,685 9,513 (1,617) 7,896 109,411 56,339
Total comprehensive income attributable to: Owners of the company Non-controlling interests 494,189 39,096 533,285 169,384 (8,698) 160,685
55
Statements of Comprehensive Income Year Ended June 30, 2012

THE GROUP (Attributable to the Owners of the Company)
Capital Stated Redemption Revaluation General Capital Reserve Surplus Reserve Translation NonRetained of Foreign Controlling Earnings Operations Sub-Total Interests Redeemable Preference Share Capital
Notes
Total Equity Rs000
Rs000
At June 30, 2012 At July 1, 2011 Issue of shares to non-controlling interests Profit for the year Other comprehensive income Redemption of redeemable preference shares Reclassified to current liabilities Preference dividends Transactions with owners Ordinary dividends At June 30, 2012 26 685,865 685,865 -
Rs000
Rs000 Rs000
Rs000
Rs000
Rs000
Rs000
Rs000
75,000 -
556,638 44,414 -
1,505 -
1,1 78,885 476,269 (18,447)
3,590 2,501,483 (26,494) 476,269 17,920 (18,447)
153,321 2 39,619 (523) (3,999)
448,937 (44,000) (404,937) -
3,103,741 2 515,888 17,397 (44,000) (404,937) (22,446)
75,000
601,052
(101,808)
(101,808)
(10,913) 177,507
(112,721) 3,052,924
1,505 1,534,899
(22,904) 2,875,417
At June 30, 2011
At July 1, 2010 Acquisition of non-controlling interests Issue of shares to noncontrolling interests Profit for the year Other comprehensive income Preference dividends Ordinary dividends At June 30, 2011 26
685,865 685,865
75,000 75,000
548,807 7,831 556,638
1,505 1,505
1,084,597 (39,1 85) 210,465
56,505 2,452,279 (52,915) (39,185) 210,465 (45,084) (20,998) (55,994)
186,1 03 (36,637) 10,000 4,002 (8,698) (1,449) 153,321
448,937 448,937
3,087,319 (75,822) 10,000 214,467 (53,782) (22,447) (55,994) 3,103,741
(20,998) (55,994) 1,1 78,885
3,590 2,501,483
Statements of Changes in Equity Year Ended June 30, 2012

THE COMPANY Notes Stated Capital Rs000 Revaluation Surplus Rs000 Retained Earnings Rs000 Total Rs000
At July 1, 2011 Profit for the year Other comprehensive income Transactions with owners: Ordinary dividends At June 30, 2012 26
685,865 -
113,500 7,896
87,429 101,515 -
886,794 101,515 7,896
685,865
121,396
(101,808) 87,136
(101,808) 894,397
At July 1, 2010 Profit for the year Transactions with owners: Ordinary dividends At June 30, 2011 26
685,865 -
113,500 -
87,084 56,339
886,449 56,339
685,865
113,500
(55,994) 87,429
(55,994) 886,794
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Statements of Cash Flows Year Ended June 30, 2012

Notes OPERATING ACTIVITIES Cash generated from operations Interest received Tax paid Interest paid Net cash generated from/(used in) operating activities INVESTING ACTIVITIES Purchase of property, plant and equipment Purchase of intangible assets Purchase of available for sale investments Net movement in non-current receivables Proceeds from disposal of property, plant and equipment Proceeds from disposal of investments Net cash used in investing activities FINANCING ACTIVITIES Net movement in bank and import loans Net movement on finance leases Net movement in debentures Redemption of Redeemable preference shares Net movement in loans from related companies Ordinary Dividends paid to owners of the parent Ordinary Dividends paid to non controlling interest Issue of shares to non controlling interest Acquisition of non controlling interest Preference dividends paid to Executive Directors Preference dividends paid to financial institutions Net cash used in financing activities 28 (26,085) (16,134) (14,000) (44,000) (66,177) (10,913) 2 (1,333) (24,647) (203,287) 34,330 (14,916) (14,000) (45,813) 10,000 (75,822) (1,425) (22,447) (130,093) (14,000) 5 (66,175) (80,170) (14,000) 75 (45,813) (59,738) 3 4 (125,631) (5,471) (234) (5,307) 6,444 (130,199) (169,713) (1,851) (6,244) 32,026 (145,782) (234) (234) 27(a) 1,134,703 5,483 (44,155) (93,115) 1,002,916 ( 1 8 5 ,1 5 9 ) 4,342 (18,631) ( 9 9 ,1 0 1 ) (298,549) 85,248 4,419 (1,127) (6,645) 81,895 7 1 ,1 79 7,1 1 6 ( 1 , 41 2 ) ( 9 ,1 0 7 ) 6 7, 7 76 THE GROUP 2012 2011 Rs000 Rs000 THE COMPANY 2012 2011 Rs000 Rs000
Net increase/(decrease) in cash and cash equivalents Exchange difference At July 1, At June 30, 27(b)
669,430 (7,141) (741,125) (78,836)
(574,424) 10,920 (177,621) (741,125)
1,491 7,478 8,969
8,038 (560) 7,478
Notes to the Financial 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 5 th Floor Ebne Skies, Rue de lInstitut, Ebne. 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 years 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 Companys 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 governmentrelated 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 Companys 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; M aximum 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 Companys financial statements.
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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 Companys financial statements. (b) Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the Group umerous new standards, amendments and interpretations to existing standards have been issued but are N 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 Groups 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 IASBs 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 effective on January 01, 2013. 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.
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2 Accounting Policies (CONTINUED) 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 effective on January 01, 2013. 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 Groups 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 entitys 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 Groups 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 all unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.
2 Accounting Policies (CONTINUED) 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.
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2 Accounting Policies (CONTINUED) 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 Companys 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.
2 Accounting Policies (CONTINUED) (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.
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2 Accounting Policies (CONTINUED) (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 Buildings on leasehold land Plant and machinery Motor vehicles Furniture and equipment Computer equipment Other items - 2 % p.a - 2 % p.a - 10% - 20% p.a - 20% p.a - 5% - 20% p.a - 20% p.a - 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.
2 Accounting Policies (CONTINUED) (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 interests proportionate share of the acquirees 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 Groups 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 noncontrolling 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 Groups 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 Groups 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 Groups 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.
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2 Accounting Policies (CONTINUED) (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 Groups 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 Groups commitment on behalf of the associated company. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Groups 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 assets recoverable amount. An assets recoverable amount is the higher of an assets or cash-generating units 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 assets 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 assets revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
2 Accounting Policies (CONTINUED) (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 Groups 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 Groups 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 acquirers 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 Groups share of associates 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.
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2 Accounting Policies (CONTINUED) (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 noncurrent 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.
2 Accounting Policies (CONTINUED) (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 arms 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 assets 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.
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2 Accounting Policies (CONTINUED) (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: t he rights to receive cash flows from the asset have expired; t he 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 t he 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.
2 Accounting Policies (CONTINUED) (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 Groups 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 Groups 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 Groups 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 assets carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial assets 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.
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2 Accounting Policies (CONTINUED) (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 assets 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 Finished goods and work in progress purchase cost on a weighted average cost basis; c ost 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.
2 Accounting Policies (CONTINUED) (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.
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2 Accounting Policies (CONTINUED) (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 Groups 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.
2 Accounting Policies (CONTINUED) (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: w here 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 i n 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: w here 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 i n 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.
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2 Accounting Policies (CONTINUED)
Value Added Tax Revenues, expenses and assets are recognised net of the amount of value added tax except: w here 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.
2 Accounting Policies (CONTINUED) (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. D ividend income - when the shareholders 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 Companys 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 Companys equity holders. (y) Dividend Distribution Dividend distribution to the Companys shareholders is recognised as a liability in the Groups financial statements in the period in which the dividends are approved by the Companys 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.
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3. PROPERTY, PLANT AND EQUIPMENT (a) THE GROUP Freehold Land and Buildings Rs000 At June 30, 2012 COST OR VALUATION At July 1, 2011 Additions Disposals Reclassifications Assets written off Transfer to intangible assets (Note 4) Revaluation surplus Translation adjustments At June 30, 2012 DEPRECIATION At July 1, 2011 Charge for the year Disposals Reclassifications Assets written off Transfer to intangible assets (Note 4) Revaluation adjustments Translation adjustments At June 30, 2012 NET BOOK VALUES At June 30, 2012 Buildings on Leasehold Land Rs000 Plant and Machinery Rs000 Motor Vehicles Rs000 Furniture and Equipment Rs000 Assets Computer Under Equipment Construction Rs000 Rs000 Other Items Rs000
Total Rs000
885,213 8,328 44 15,1 17 (16,1 73) 892,529
725,280 4,993 (269) (3,794) 13,297 739,507
2,706,931 79,226 (7,978) 12,694 (31,980) (23,351) 2,735,542
91,329 20,267 (9,826) (6,747) (1,077) 93,946
476,1 38 14,301 (1,334) (4,264) (7,394) (2,444) 475,003
132,966 7,516 (650) (740) (25,779) (11,292) (971) 101,050
29,798 2,827 (12,878) (1,225) 18,522
1,991 635 5,413 (558) (204) 7,277
5,049,646 138,093 (19,788) (77,477) (11,292) 28,414 (44,220) 5,063,376
83,616 14,565 (7,624) (1,288) 89,269
135,666 15,329 (181) (3,667) (20,223) 126,924
2,001,622 131,973 (6,856) 5 (28,858) (6,401) 2,091,485
55,010 12,330 (9,1 38) (3,375) (416) 54,411
399,927 16,937 (161) 509 (6,392) (1,071) 409,749
115,648 7,418 (595) (371) (25,778) (8,894) (300) 87,128
2,1 94 259 2,453
1,674 617 38 (558) 1 1,772
2,795,357 199,428 (16,750) (68,628) (8,894) (27,847) (9,475) 2,863,191
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 and Buildings Rs000 At June 30, 2011 COST OR VALUATION At July 1, 2010 Additions Disposals Reclassifications Assets written off Transfer to intangible assets (Note 4) Transfer to non current receivables Revaluation surplus Translation adjustments At June 30, 2011 DEPRECIATION At July 1, 2010 Charge for the year Disposals Reclassifications Assets written off Transfer to intangible assets (Note 4) Translation adjustments At June 30, 2011 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 70,375 13,922 (1,1 21) 726 (268) (18) 83,616 122,791 14,809 (1,934) 135,666 1,879,555 129,809 (7,689) 2,1 33 (1,367) (819) 2,001,622 63,281 12,1 60 (15,529) (2,1 70) (2,677) (55) 55,010 377,333 17,1 76 (607) 8,537 (2,284) (228) 399,927 150,1 57 9,1 41 (359) (9,227) (33,862) (76) (126) 115,648 259 1,935 2,194 1,557 117 1,674 2,665,049 197,393 (25,305) (40,458) (76) (1,246) 2,795,357 861,945 37,367 (7,094) 1,315 (935) 10,406 (17,791) 885,213 726,991 11,1 37 (12,936) 88 725,280 2,665,385 67,354 (13,531) 808 (1,367) (11,718) 2,706,931 94,250 18,823 (18,666) (2,677) (401) 91,329 450,462 24,1 18 (1,1 28) 7,413 (2,577) (2,1 50) 476,138 171,1 15 6,463 (390) (9,536) (33,881) (357) (448) 132,966 16,862 12,936 29,798 14,588 21 (10,963) (766) (889) 1,991 4,984,736 182,145 (51,772) (41,437) (357) (766) 10,406 (33,309) 5,049,646 Buildings on Leasehold Land Rs000 Plant and Machinery Rs000 Motor Vehicles Rs000 Furniture and Equipment Rs000 Assets Computer Under Equipment Construction Rs000 Rs000 Other Items Rs000
Total Rs000
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3. PROPERTY, PLANT AND EQUIPMENT (CONTINUED) Buildings on Leasehold Land Rs000 Plant and Machinery Rs000 (c) THE COMPANY At June 30, 2012 COST OR VALUATION At July 1, 2011 Revaluation surplus At June 30, 2012 DEPRECIATION At July 1, 2011 Charge for the year At June 30, 2012 NET BOOK VALUES At June 30, 2012 Total Rs000
134,344 9,513 143,857
5,748 5,748
140,092 9,513 149,605
25,752 2,645 28,397
5,748 5,748
31,500 2,645 34,145
115,460
115,460
Buildings on Leasehold Land Rs000 At June 30, 2011 COST OR VALUATION At July 1, 2010 and June 30, 2011 DEPRECIATION At July 1, 2010 Charge for the year At June 30, 2011 NET BOOK VALUES At June 30, 2011
Plant and Machinery Rs000
Total Rs000
134,345
5,748
140,093
23,1 07 2,645 25,752
5,748 5,748
28,855 2,645 31,500
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 2012 2011 Rs000 Rs000 Cost Accumulated depreciation Net book values 1,385,455 (977,376) 408,079 1,376,1 53 (949,667) 426,486 THE COMPANY 2012 2011 Rs000 Rs000 18,364 (10,208) 8,156 18,364 (9,965) 8,399
(d) Property, plant and equipment above include leased assets as follows: Plant and Machinery Rs000 54,936 (14,011) 40,925 43,272 Motor Vehicles Rs000 39,599 (18,547) 21,052 20,205 2012 Total Rs000 94,535 (32,558) 61,977 63,477
THE GROUP Cost Accumulated depreciation Net book values at June 30, 2012 Net book values at June 30, 2011 Leased assets are pledged as security for the related finance lease liabilities. (e) Depreciation charge is analysed as follows:
THE GROUP 2012 2011 Rs000 Rs000 172,215 27,213 199,428 169,714 27,679 197,393
Cost of sales Administrative and selling expenses
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.
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4. INTANGIBLE ASSETS THE GROUP COST At July 1, 2011 Additions Transfer from property, plant and equipment (Note 3) Write off Translation adjustment At June 30, 2012 At July 1, 2010 Additions Transfer from property, plant and equipment (Note 3) Translation adjustment At June 30, 2011 AMORTISATION At July 1, 2011 Charge for the year Transfer from property, plant and equipment (Note 3) Write off Translation adjustment At June 30, 2012 At July 1, 2010 Charge for the year Transfer from property, plant and equipment (Note 3) Translation adjustment At June 30, 2011 NET BOOK VALUES at 30 June 2012 NET BOOK VALUES at 30 June 2011 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. Unquoted 2012 2011 Rs000 Rs000 1,340,661 1,340,661 Computer Software Rs000 11,543 3,356 11,292 (61) (226) 25,904 9,398 1,851 357 (63) 11,543 Development Cost Rs000 2,115 (2) 2,113 Total Rs000 11,543 5,471 11,292 (61) (228) 28,017 9,398 1,851 357 (63) 11,543
7,080 2,718 8,894 (28) (80) 18,584 5,384 1,632 76 (12) 7,080 7,320 4,463
19 (2) 17 2,096 -
7,080 2,737 8,894 (28) (82) 18,601 5,384 1,632 76 (12) 7,080 9,416 4,463
5. INVESTMENTS IN SUBSIDIARY COMPANIES THE COMPANY (a) COST At July 1, and at June 30, IMPAIRMENT PROVISIONS At July 1, and at June 30,
(238,800) 1,101,861
(238,800) 1,1 01,861
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: Class of Shares Denominated Name of Company Held Currency Ajax Sweaters Limited Floreal Knitwear Ltd (2) Floreal Madagascar SA Floreal Creation SA Floreal Boutique SARL Ferney Spinning Mills Limited (3) Floreal International Ltd Floreal Knowledge Centre Limited Floreal Cashmere Limited (2) Ferney Manufacturing Industries Limited (3) Socit Civile Immobilires des Mascareignes Infoclick Limited Texaro CIELTex SA (Proprietary) Limited Fibretex SA (Proprietary) Limited (6) CTL Retail Ltd De Nyon Limited Tropic Knits Limited Tropic Madagascar SA Consolidated Dyeing & Fabrics Limited (5) Consolidated Dyeing Co Limited (5) TKL International Ltd Floreal Manufacturing Limited Societe Bonnetiere Malagasy Aquarelle Clothing Ltd (4) Aquarelle Madagascar SARL Aquarelle International Limited Aquarelle India Private Limited (7),(8) Consolidated Fabrics Ltd International Fabrics Ltd Pastel Blue Ltd (4) Laguna Clothing Ltd (1).(8) Tinka International Ltd Industrial Consultancy Services Ltd New Island Clothing Limited (1) Azzurri Company Ltd (1) New Island Clothing Madagascar SA Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Taka Rs. MGA Euro MGA Rs. Rs. Rs. Rs. Rs. MGA Rs. MGA ZAR ZAR Rs. Rs. Rs. MGA Rs. Rs. Rs. Rs. MGA Rs. MGA Rs. INR Rs. USD Rs. INR HKG Rs. Rs. USD MGA
Stated Capital 000s 36,036 203,824 300,000 50 2,000 9,564 14,000 25 22,625 15,750 2,000 10 260,000 1 1 10,001 33,547 15,000 6,500,000 100,000 107,500 3,814 5,750 390,000 180,000 225,000 7,404 24,000 25,743 11,328 40,000 74,900 100 25 20,000 400 10,000
Country of Incorporation Bangladesh Mauritius Madagascar France Madagascar Mauritius Mauritius Mauritius Mauritius Mauritius Madagascar Mauritius Madagascar South Africa South Africa Mauritius Mauritius Mauritius Madagascar Mauritius Mauritius Mauritius Mauritius Madagascar Mauritius Madagascar Mauritius India Mauritius Mauritius Mauritius India Hong Kong Mauritius Mauritius Mauritius Madagascar
2012 % Holding Direct Indirect 100.00% 100.00% 100.00% 100.00% 100.00% 0.20% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 99.70% 100.00% 99.80% 83.55% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 80.00% 80.00% 100.00% 50.00% 100.00% 100.00% 50.00% 50.00% 98.80%
2011 % Holding Direct 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 0.20% 100.00% 100.00% 100.00% 43.00% 100.00% 100.00% Indirect 100.00% 99.70% 100.00% 99.80% 100.00% 100.00% 100.00% 100.00% 100.00% 57.00% 100.00% 100.00% 100.00% 100.00% 80.00% 80.00% 100.00% 50.00% 100.00% 100.00% 50.00% 50.00% -
Main Business
Knitwear Knitwear Knitwear Knitwear Knitwear Knitwear Knitwear Knitwear Knitwear Knitwear Knitwear Knitwear Knitwear Retail Retail Retail Knits Knits Knits Knits Knits Knits Knits Knits Woven Woven Woven Woven Woven Woven Woven Woven Woven Woven Woven Woven 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.
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6. INVESTMENTS IN ASSOCIATES (a) THE GROUP At July 1, Share of results Movement in reserves Transfer to non-current assets classified as held-for-sale (Note 12) At June 30, (b) The associates are as follows: Name of Company Country of Year ended Incorporation Unquoted 2012 2011 Rs000 Rs000 47,1 67 870 1,600 (49,637) 2012 & 2011 % Holding Direct Indirect
Harris Wilson Textiles SA AMTECS (International) Ltd
June 30, 2012 June 30, 2012
France Mauritius
21.90% 30.00%
(c) The following table illustrates summarised financial information of the groups investment in its associates, now reclassified as held for sale: 2012 2011 Rs000 Rs000 Income statement 958,348 Revenues 966,318 1,895 15,354 Profit 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 2011 Rs000 Rs000 3,243 3,243 234 3,477 3,243
At July 1, Additions At June 30,
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 GROUP 2012 2011 Rs000 Rs000 12,998 THE GROUP 2012 2011 Rs000 Rs000 175,519 (32,628) 142,891 2012 Rs000 126,965 (673) 5,299 11,300 142,891 148,097 (21,1 32) 126,965 7,691
Long-term deposits 9. DEFERRED TAX (ASSETS)/LIABILITIES (a) THE GROUP Deferred tax liabilities Deferred tax assets Net deferred tax liabilities The movement in deferred tax during the year is as follows : 2011 Rs000 125,1 23 (225) 4,285 (2,218) 126,965
THE COMPANY 2012 2011 Rs000 Rs000 18,883 18,883 2012 Rs000 15,970 1,617 1,296 18,883 15,970 15,970
At July 1, Translation adjustment Other comprehensive income Income statement (Note 20 (b)) At June 30,
2011 Rs000 16,339 (369) 15,970
Deferred tax assets and liabilities, deferred tax charge/(credit) in the Statement of Comprehensive Income are attributable to the following items : At June 30, 2011 Rs000 64,1 22 83,996 (21) 148,097 Other Income Comprehensive I ncome Statement Rs000 Rs000 42,707 (20,515) (69) 22,1 23 At June 30, 2012 Rs000 106,829 68,780 (90) 175,519
THE GROUP Deferred tax liabilities Accelerated tax depreciation Revaluation of properties Others
5,299 5,299
Deferred tax assets Retirement benefit obligations Tax losses Provisions Investment tax credit Others
1,1 23 4,831 6,960 3,901 4,317 21,1 32 126,965
117 (6,630) 6,595 799 10,615 11,496 10,627
5,299
1,240 (1,799) 13,555 4,700 14,932 32,628 142,891
Net Deferred tax liabilities
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9. DEFERRED TAX (CONTINUED) (b) THE COMPANY At June 30, 2011 Rs000 Deferred tax liability Accelerated tax depreciation Revaluation of property Deferred tax asset Tax losses Net Deferred Tax Liabilities 15,595 3,520 19,1 15 (3,1 45) 15,970 Other Income comprehensive statement income Rs000 Rs000 (2,330) 481 (1,849) 3,1 45 1,296 At June 30, 2012 Rs000 13,265 5,618 18,883 18,883
1,617
THE GROUP 2012 2011 Rs000 Rs000 (c) Unused tax losses available for offset against future taxable profits 10. INVENTORIES 7,555 21,040
Raw materials (NRV) Other stocks (NRV) Work in progress (NRV) Finished goods (NRV) Goods in transit (Cost)
THE GROUP 2012 2011 Rs000 Rs000 650,732 846,790 74,206 48,433 1,109,657 1,1 35,045 125,332 89,1 35 76,449 95,316 2,036,376 2,214,719
The amount of inventories recognised as an expense during the year is Rs. 5,069,011,1 19 (2011 : Rs. 6,086,417,000). 11. TRADE AND OTHER RECEIVABLES THE GROUP 2012 2011 Rs000 Rs000 1,364,338 1,592,867 (26,794) (30,665) 1,337,544 1,562,202 5,583 2,491 14,878 21,1 72 33,228 16,599 251,889 329,1 91 1,643,122 1,931,655 THE COMPANY 2012 2011 Rs000 Rs000 173,383 136,422 2,146 2,535 175,529 138,957
Trade receivables Less : provision for impairment Trade receivables - net Amount receivable from subsidiaries Amount receivable from related companies Advances to Executive Directors Fair value asset on forward contracts Other receivables and prepayments (Note 11 (viii))
11. TRADE AND OTHER RECEIVABLES (CONTD) 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 nor Past Due not Impaired Impaired Total 30 days 30 - 60 days 60 - 90 days Rs000 Rs000 Rs000 Rs000 Rs000 2012 2011 1,337,544 1,562,202 1,186,348 991,032 95,218 255,709 26,319 158,652 20,702 95,503
90 days Rs000 8,957 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 Groups trade and other receivables are denominated in the following THE GROUP currencies: 2012 2011 Rs000 Rs000 180,120 Rupee 222,1 39 307,003 US Dollar 411,877 212,983 UK Pound 250,511 424,291 Euro 642,563 261,973 ZAR 235,346 165,895 INR 152,674 90,857 16,545 Other currencies 1,643,122 1,931,655 (iv) Movements on the provision for impairment of trade receivables are as follows: THE GROUP 2012 2011 Rs000 Rs000 (30,665) (31,809) 6,910 677 2,978 21,1 87 (6,017) (20,720) (26,794) (30,665) THE COMPANY 2012 2011 Rs000 Rs000 175,529 138,957 175,529 138,957
At July 1, Receivables written off during the year as uncollectible Unused amounts reversed Increase in provision for the year At June 30, (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.
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11. TRADE AND OTHER RECEIVABLES (CONTD) (viii) Other receivables and prepayments Other receivables and prepayments consist of: Deposits Taxes and grants Advance payments to suppliers Advances to employees Receivables from Executive Directors Interest receivable Staff loan Dividends receivable Others 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 2011 THE GROUP Rs000 Rs000 22,366 At July 1, Transfer from investment in associate (Note 6) 49,637 (27,271) Impairment At June 30, 22,366 22,366 13. SHARE CAPITAL 2012 Rs000 Stated capital 101,807,589 no par value ordinary shares 14. REDEEMABLE PREFERENCE SHARE CAPITAL 685,865 2011 Rs000 685,865 THE GROUP 2012 2011 Rs000 Rs000 12,787 45,194 28,357 10,186 4,170 151,195 251,889 15,747 66,787 112,421 11,338 6,1 88 116,710 329,1 91 THE COMPANY 2012 2011 Rs000 Rs000 2,146 2,146 2,535 2,535
THE GROUP 2012 2011 Rs000 Rs000 448,937 (44,000) (404,937) 448,937 448,937
Redeemable Preference Shares at Rs. 1,000 each At July 1, Repaid during the year Reclassified to current liabilities At June 30,
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 2012 2011 Rs000 Rs000 51,538 30,000 38,524 28,000 1,790 149,852 320,604 54,837 255,976 14,000 16,086 2,304 663,807 813,659 68,1 65 30,000 43,631 42,000 16,030 199,826 939,332 9,639 268,682 14,000 14,651 2,1 23 1,248,427 1,448,253
THE COMPANY 2012 2011 Rs000 Rs000 28,000 28,000 386 14,000 82 14,468 42,468 42,000 42,000 479 14,000 77 14,556 56,556
(a) Non-current Bank loans- note (b) 9% Redeemable preference shares - note (c) Obligations under finance leases - note (d) Debentures - note (f) Others Current Bank overdrafts - note (e) Bank loans - note (b) Import loan -note (g) Debentures - note (f) Obligations under finance leases - note (d) Others
Total borrowings
(b) Bank loans Within one year After one year and before two years After two years and before three years After three years and before five years After five years
THE GROUP 2012 2011 Rs000 Rs000 54,837 9,639 14,053 22,1 24 7,889 13,835 9,243 15,725 20,353 16,481 106,375 77,804
THE COMPANY 2012 2011 Rs000 Rs000 -
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 subsidiarys option on or before June 30, 2014. On winding up, the shares are privileged in respect of outstanding capital and interest.
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15. BORROWINGS (CONTD) (d) Obligations under finance leases THE GROUP 2012 2011 Rs000 Rs000 20,592 19,379 17,891 5,406 923 64,191 (9,581) 54,610 19,994 18,488 16,621 14,611 1,267 70,981 (12,699) 58,282 THE COMPANY 2012 2011 Rs000 Rs000 -
Finance lease liabilities - minimum lease payments: Within one year After one year and before two years After two years and before three years After three years and before five years After five years Finance charges allocated to future periods Present value of finance lease liabilities The present value of finance lease liabilities may be analysed as follows :
Within one year After one year and before two years After two years and before three years After three years and before five years After five years
THE GROUP 2012 2011 Rs000 Rs000 16,086 14,651 16,381 14,552 15,583 14,319 5,725 13,551 835 1,209 54,610 58,282
THE COMPANY 2012 2011 Rs000 Rs000 -
(e) The bank overdrafts are secured by fixed and floating charges over the assets of the Group and the Company. (f) Debentures THE GROUP 2012 2011 Rs000 Rs000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 42,000 56,000 THE COMPANY 2012 2011 Rs000 Rs000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 42,000 56,000
Within one year After one year and before two years After two years and before three years After three years and before five years
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 Groups and Companys borrowings are denominated in the following currencies: THE GROUP 2012 2011 Rs000 Rs000 165,019 545,886 360,261 420,745 145,386 212,278 94,521 44,754 39,151 180,1 51 9,321 44,439 813,659 1,448,253 THE COMPANY 2012 2011 Rs000 Rs000 42,468 56,556 42,468 56,556
Rupee US Dollar Euro GBP INR Other currencies
(i) The fair values of the non-current borrowings are approximately equal to their carrying value.
16. OTHER COMPREHENSIVE INCOME (a) THE GROUP Revaluation Surplus Rs000 56,261 (5,299) 50,962 Translation of foreign operations Rs000 (33,565) (33,565) Total Rs000 56,261 (5,299) (33,565) 17,397
2012 Revaluation surplus Deferred tax on revaluation reserve Translation differences on foreign subsidiaries Other comprehensive income/(loss) for year 2012
2011 Revaluation surplus Deferred tax on revaluation reserve Movement on reserves of associate Translation differences on foreign subsidiaries Other comprehensive income/(loss) for year 2011 10,406 (4,285) 6,121 1,600 (61,503) (59,903) 10,406 (4,285) 1,600 (61,503) (53,782)
(b) THE COMPANY Revaluation Surplus Rs000 9,513 (1,617) 7,896
2012 Revaluation surplus Deferred tax on revaluation reserve Release of fair value of available-for-sale investment Other comprehensive income/(loss) for year 2012 2011 Revaluation surplus Deferred tax on revaluation reserve Release of fair value of available-for-sale investment Other comprehensive income/(loss) for year 2011
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17. RETIREMENT BENEFIT OBLIGATIONS
Amounts recognised in the Statement of financial position: Pension benefits (note (a)) Other post retirement benefits (note (b))
THE GROUP 2012 2011 Rs 000 Rs 000 16,858 14,655 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. Funded Retirement Benefit Plan for Existing Employees 2012 2011 Rs 000 Rs 000 (65,599) (59,021) 62,640 64,044 (2,959) 5,023 (1,812) (7,583) (4,771) (2,560) Funded Retirement Benefit Plan for Existing Employees 2012 2011 Rs 000 Rs 000 3,641 4,061 632 638 606 531 5,919 5,706 (6,472) (6,390) (417) 3,909 (269) 4,277 Unfunded Retirement Benefit plan for existing employees 2012 2011 Rs 000 Rs 000 (1,485) (1,294) (1,485) (1,294) (880) (961) (2,365) (2,255) Unfunded Retirement Benefit plan for existing employees 2012 2011 Rs 000 Rs 000 46 73 127 121 (62) 111 (57) 137 Unfunded Retirement Benefit plan for former Employees 2012 2011 Rs 000 Rs 000 (10,716) (10,838) (10,716) (10,838) 994 998 (9,722) (9,840) Unfunded Retirement Benefit plan for former Employees 2012 2011 Rs 000 Rs 000 970 994 68 1,038 7 1,001
Total 2012 Rs 000 (77,800) 62,640 (15,160) (1,698) (16,858) 2011 Rs 000 (71,1 53) 64,044 (7,1 09) (7,546) (14,655)
Benefit liability Defined benefit obligation Fair value of plan assets Unrecognised actuarial (gains)/losses Benefit liability
Total 2012 Rs 000 3,687 632 606 7,016 (6,472) (411) 5,058
(1,190)
Net benefit expense Current service cost Scheme expenses Cost of insuring risk benefits Interest cost on benefit obligation Expected return on plan assets Effect of settlement Net actuarial (loss)/gain recognised in the year Net benefit expense
Actual return on plan assets
2011 Rs 000 4,1 34 638 531 6,821 (6,390) (319) 5,415

3,849
17. RETIREMENT BENEFIT OBLIGATIONS (CONTINUED) The amounts recognised on the statement of financial position are as follows: THE GROUP 2012 2011 Rs000 Rs000 14,655 14,502 5,058 5,415 (2,855) (5,262) 16,858 14,655
At July 1, Total expense Employer contributions At June 30, Changes in the present value of the defined benefit obligation are as follows: Funded Retirement Benefit Plan for Existing Employees Rs000 (54,880) (5,706) (4,061) 1,375 4,251 (59,021) (5,919) (3,641) 675 2,307 (65,599) Unfunded Retirement Benefit For Existing Employees Rs000 (1,213) (121) (73) 113 (1,294) (127) (46) (18) (1,485)
Defined benefit obligations at June 30, 2010 Interest cost Current service cost Benefits paid Actuarial losses/(gains) Defined benefit obligations at June 30, 2011 Interest cost Current service cost Benefits paid Actuarial losses/(gains) Defined benefit obligations at June 30, 2012
Unfunded Retirement Benefit for Former Employees Rs000 (10,557) (994) 1,1 55 (442) (10,838) (970) 1,1 55 (63) (10,716)
Total Rs000 (66,650) (6,821) (4,1 34) 2,530 3,922 (71,1 53) (7,016) (3,687) 1,830 2,226 (77,800) Rs000
Changes in the fair value of plan assets of the funded retirement benefit plan are as follows :
Fair value of plan assets at June 30, 2010 Expected return Contributions by employer Scheme expenses Cost of insuring risk benefits Benefits paid Actuarial losses Fair value of plan assets at June 30, 2011 Expected return Contributions by employer Scheme expenses Cost of insuring risk benefits Benefits paid Actuarial losses Fair value of plan assets at June 30, 2012 The Group expects to contribute Rs. 4,000,000 to the pension scheme for the year ending June 30, 2013.
58,630 6,390 4,1 06 (638) (531) (1,375) (2,538) 64,044 6,472 1,700 (632) (606) (676) (7,662) 62,640
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17. RETIREMENT BENEFIT OBLIGATIONS (CONTINUED) 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 24% 26% 44% 43% 32% 31%
Local equities Overseas equities Fixed interest
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 Discount rates Expected rate of return on assets Future salary increases Future pension increases Amounts for the current and previous years are as follows: 2012 Rs '000 (77,800) 62,640 (15,160) 2,226 (7,662) 2011 Rs '000 (71,1 53) 64,044 (7,1 09) 3,922 (2,538) 2010 Rs '000 (66,650) 58,630 (8,020) 8,052 (6,848) 2009 Rs 000 (65,647) 57,733 (7,914) 2,035 (3,913) 2008 Rs 000 (60,637) 53,824 (6,813) 1,1 73 (8,1 57) 9.5% 10.0% 7.5% - 8.0% 0.0% 2011 9.5% 10.0% 7.5%-8% 0.0% 2010 10.0% 10.5% 8.0% 0.0%
Defined benefit obligation Plan assets Deficit Experience adjustments on plan liabilities Experience adjustments on plan assets
17. RETIREMENT BENEFIT OBLIGATIONS (CONTINUED) (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 GROUP 2012 2011 Rs000 Rs000 (61,155) (53,291) 3,222 3,283 (57,933) (50,008) THE GROUP 2012 2011 Rs000 Rs000 5,668 7,099 4,703 4,1 78 (147) (1,219) 10,224 10,058 THE GROUP 2012 2011 Rs000 Rs000 (50,008) (40,343) (10,224) (10,058) 2,299 393 (57,933) (50,008) THE GROUP 2012 2011 Rs000 Rs000 (53,291) (40,343) (5,688) (7,099) (4,703) (4,1 78) 228 (2,064) 2,299 393 (61,155) (53,291) 2012 Rs 000 (61,155) 2011 Rs 000 (53,291) 2010 Rs 000 (40,343)
Present value of plan liability Unrecognised actuarial loss Liability in the statement of financial position The amounts recognised in the income statement are as follows:
Current service cost Interest cost Actuarial gain Total, included in employee benefit expense The amounts recognised on the statement of financial position are as follows:
At July 1, Total expense as above Benefits paid At June 30, The movement in the defined benefit obligation over the year is as follows:
At July 1, Current service cost Interest cost Employees contribution Past service cost Actuarial gains/(losses) Benefits paid At June 30, Amounts for the current and previous years are as follows: Defined benefit obligation The principal actuarial assumptions used for accounting purposes were: Discount rate Future long term salary increase
THE GROUP 2012 2011 8.6% - 9.5% 8.0% - 9.5% 5.0% - 10.0% 5.0% - 10.0%
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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 In FKL Chief Executive Officer - CIEL Textile In ACL Chief Executive Officer - CIEL Textile Chief Executive Officer of the Woven cluster In TKL Chief Executive Officer - CIEL Textile 200 Issue Price Rs. 1,1 13
200 300 200
6,824 6,824 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 : THE GROUP 2012 2011 Rs000 Rs000 9,760 18,320 9,760 18,320 THE GROUP 2012 2011 Rs000 Rs000 9,659 9,760 8,661 9,760 18,320 THE COMPANY 2012 2011 Rs000 Rs000 THE COMPANY 2012 2011 Rs000 Rs000 -
Redeemable C Shares
Analysed as follows :
Non current Current
19. TRADE AND OTHER PAYABLES THE GROUP 2012 2011 Rs000 Rs000 546,177 668,026 315,480 540,393 74,480 411 190 4,523 6,218 7,474 587,928 577,607 1,530,473 1,798,434 THE COMPANY 2012 2011 Rs000 Rs000 374,870 360,937 3,729 4,721 378,599 365,658
Trade payables Bills discounted Amount payable to subsidiaries Amount payable to related parties Amount payable to associates Fair value liability on forward contracts Other payables and accruals (note 19(a))
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19. TRADE AND OTHER PAYABLES (CONTINUED) The carrying amount of the Groups and the Companys trade and other payables are denominated in the following currencies: THE GROUP 2012 2011 Rs000 Rs000 668,164 614,090 422,816 470,350 110,156 93,300 69,863 277,604 89,729 131,641 169,745 211,449 1,530,473 1,798,434 THE COMPANY 2012 2011 Rs000 Rs000 378,599 365,658 378,599 365,658
Rupee US Dollar UK Pound Euro INR Other currencies
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 2012 2011 Rs000 Rs000 56,078 14,965 258,111 35,464 118,470 1,470 103,370 587,928 42,080 53,036 290,834 7,433 79,1 63 1,630 103,431 577,607 THE COMPANY 2012 2011 Rs000 Rs000 1,470 2,259 3,729 1,630 3,091 4,721
Other payables and accruals consist of : Accrued expenses Deposits from customers Provisions (Note 19(b)) Goods in transit Employees related expenses Directors fees Other payables
(b) Movement in provisions during the year is as follows:
At July 1, Additional provisions Amounts incurred and charged against provisions Exchange differences At June 30,
THE GROUP 2012 2011 Rs000 Rs000 290,834 426,453 100,302 145,570 (131,745) (278,781) (1,280) (2,408) 258,111 290,834
Provisions consist mainly of performance-related bonuses, mandatory end-of-year bonus, claims and air freight. 20. INCOME TAX THE GROUP 2012 2011 Rs000 Rs000 18,177 83,198 3,119 (8,752) (5,602) 2,776 (44,155) 48,761 18,657 19,385 815 (1,1 82) (3,725) 2,858 (18,631) 18,1 77 THE COMPANY 2012 2011 Rs000 Rs000 70 1,127 (1,127) 70 358 (235) 1,289 (1,412) -
(a) Income Tax - Statement of Financial Position At July 1, Current tax on adjusted profits for the year Alternative Minimum Tax Exchange Difference Over provision of prior years Corporate Social Responsibility Paid during the year At June 30,
20. INCOME TAX (CONTINUED) (b) Income Tax - Income Statement Current tax on adjusted profits for the year Alternative Minimum Tax Corporate Social Responsibility Over provision of prior years Deferred tax (Note 9 ) THE GROUP 2012 2011 Rs000 Rs000 83,198 19,385 3,119 815 2,776 2,858 (5,602) (3,725) 83,491 19,333 11,300 (2,218) 94,791 17,1 15 THE COMPANY 2012 2011 Rs000 Rs000 70 1,127 1,289 (235) 1,197 1,054 1,296 (369) 2,493 685
(c) The tax on the Groups and Companys profit before tax differs from the theoretical amount that would arise using the basic tax rate of the Group as follows: THE GROUP 2012 2011 Rs000 Rs000 Profit before tax Tax calculated at a rate of 17% (2011 : 15%) Adjustments for:Non-deductible expenses Exempt income Alternative Minimum Tax (AMT) Tax losses-net Effect of different tax rate Effect of change in tax law Underprovision of deferred tax in prior years Over provision of prior years Double tax relief Corporate Social Responsibility Investment tax credit Others 21. OTHER OPERATING (LOSSES) / INCOME THE GROUP Restated 2012 2011 Rs000 Rs000 (1,181) 5,559 69,712 68,258 (118,975) (134,053) 15,922 29,708 (34,522) (30,528) THE COMPANY Restated 2012 2011 Rs000 Rs000 1,308 671 1,127 1,289 2,435 1,960 610,679 103,815 4,581 (1,028) 3,119 (951) 26,590 1,309 (7,117) (5,602) (12,532) 2,776 (15,225) (4,944) 94,791 231,582 34,737 6,222 (27,1 87) 815 119 4,549 (5,716) (3,725) (3,752) 2,858 494 7,701 17,1 15 THE COMPANY 2012 2011 Rs000 Rs000 104,008 17,681 386 (18,446) 2,130 (385) 1,127 2,493 57,024 8,554 (8,567) (235) 1,289 (356) 685
Profit on disposal of property, plant and equipment Duty drawback Net foreign exchange differences Other services
Duty drawback relates to export incentives obtained from Indian authorities and are recognised on an accruals basis. 22. EMPLOYEE BENEFIT EXPENSE THE GROUP 2012 2011 Rs000 Rs000 1,494,939 1,245,535 83,124 78,254 7,925 13,849 5,058 5,415 23,604 19,809 41,049 37,510 1,655,699 1,400,372 CIEL Textile Limited Annual Report 2012
Wages and salaries Social security costs Other post retirement benefits (Note 17(b)) Pension costs-defined benefit plans (Note 17(a)) Pension costs- defined contribution plans Others
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23. PROFIT BEFORE TAXATION THE GROUP 2012 2011 Rs000 Rs000 Profit before taxation is arrived at after crediting : Profit on disposal of property, plant and equipment and charging: Depreciation on property, plant and equipment - owned assets - leased assets Amortisation of intangible assets Cost of inventories recognised as expense Employee benefit expense (Note 22) No. of employees at year end 24. NET FINANCE COSTS THE GROUP 2012 2011 Rs000 Rs000 Interest expense on: - Bank overdrafts - Bills discounted - Bank and other loans - Import loans - Finance leases - Debentures - Preference share dividends - Others Finance costs Interest income on: - Loans and Advances - Bank Balances - Others Finance income Net finance costs 25. EARNINGS PER SHARE THE GROUP Restated 2012 2011 Rs000 Rs000 476,269 210,465 (18,447) (20,998) 457,822 189,467 101,807,589 4.50 101,807,589 1.86 (23,286) (25,898) (14,397) (8,387) (5,956) (4,382) (4,736) (6,073) (93,115) 1,219 3,899 365 5,483 (87,632) (45,325) (19,443) (10,013) (6,082) (6,218) (5,522) (3,820) (2,678) (99,1 01) 71 2,878 1,393 4,342 (94,759) THE COMPANY 2012 2011 Rs000 Rs000 (227) (4,382) (2,036) (6,645) 4,387 32 4,419 (2,226) (5,521) (1,1 20) (2,466) (9,1 07) 7,1 16 7,1 16 (1,991) 3,406 THE COMPANY 2012 2011 Rs000 Rs000 -
5,559
188,899 10,529 2,737 5,069,011 1,655,699 16,477
183,975 13,418 1,632 6,086,417 1,400,372 14,787
2,645 -
2,645 -
Profit attributable to owners of the parent Preference dividends attributable to owners of the parent
Number of shares in issue Basic and diluted earnings per share
26. DIVIDENDS THE GROUP 2012 2011 Rs000 Rs000 Amounts recognised as distribution to owners of the parent in the year: Interim dividend of Rs. 0.30 (2011: Rs. 0.20) per share Final dividend of Rs. 0.70 (2011: Rs. 0.35) per share 30,543 71,265 101,808 THE COMPANY 2012 2011 Rs000 Rs000 30,543 71,265 101,808
20,361 35,633 55,994
20,361 35,633 55,994
Dividends payable at year end June 30 : Final Dividend to Ordinary Shareholders (payable by the holding company) Preference dividend to financial institutions (payable by the Group)
71,265 20,247 91,512
35,633 22,447 58,080
71,265 71,265
35,633 35,633
27. NOTES TO THE STATEMENTS OF CASH FLOWS THE GROUP 2012 2011 Rs000 Rs000 (a) Cash generated from operations Profit before taxation Adjustments for: - Depreciation of property, plant and equipment - Profit on disposal of property, plant and equipment - Property, plant and equipment written off - Amortisation of intangible assets - Intangible assets written off - Impairment of non current asset held for sale - Retirement benefit obligations - Employee benefit liability - Share of results of associates - Provision for doubtful debts - Unrealised foreign exchange differences - Interest income - Interest expense Cash generated from operations before changes in working capital 610,679 199,427 (3,406) 8,849 2,737 33 10,128 16,727 (5,483) 93,115 932,806 231,582 197,393 (5,559) 979 1,632 27,271 14,002 (13,780) (870) 20,720 (84,743) (4,342) 99,1 01 483,386 THE COMPANY 2012 2011 Rs000 Rs000 104,008 2,645 (4,419) 6,645 108,879 57,024 2,645 (7,1 16) 9,1 07 61,660
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27. NOTES TO THE STATEMENTS OF CASH FLOWS (CONTINUED) 2012 Rs000 Cash generated from operations before changes in working capital Changes in working capital: - Inventories - Trade and other receivables - Trade and other payables Cash generated from operations (b) Cash and cash equivalents Cash in hand and at bank Bank overdrafts (note 15 - Borrowings) 932,806 178,343 386,331 (362,777) 1,134,703 2012 Rs000 241,768 (320,604) (78,836) THE GROUP 2011 Rs000 483,386 (492,007) (214,1 07) 37,569 (185,1 59) 2011 Rs000 198,207 (939,332) (741,1 25) THE COMPANY 2012 2011 Rs000 Rs000 108,879 (36,572) 12,941 85,248 2012 Rs000 9,355 (386) 8,969 61,660 (20,778) 30,297 71,1 79 2011 Rs000 7,957 (479) 7,478
28. AMALGAMATIONS AND ACQUISITIONS 2012 A 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. 2011 Acquisition -Aquarelle India (Private) Ltd The Group acquired the additional 50% of Aquarelle India (Private) Ltd on September 30, 2010. Purchase consideration Assets Property, plant and equipment Deferred tax assets Inventories Trade and other receivables Liabilities Retirement benefit obligations Trade and other payables Borrowings Bank overdraft Rs000 75,822
25,1 63 21 33,376 93,614
(1,872) (12,791) (63,293) (944) 73,274 36,637 39,1 85
Acquisition of non controlling interests Loss on acquisition of non-controlling interests
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 GROUP 2012 2011 Rs000 Rs000 17,208 14,471 17,843 12,455 4,881 35,051 31,807
Not later than one year Later than one year and not later than five years Later than five years The average lease terms range from three to ten years.
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31. SEGMENTAL INFORMATION - GROUP THE GROUP Segment information The following is an analysis of the groups revenue and results from continuing operations by reportable segment: June 30, 2012 Knitwear Fine Knits Rs000 Rs000 2,1 35,1 37 2,135,137 210,1 08 (34,644) (2,751) 172,713 (19,288) 153,425 153,425 1,988,435 1,988,435 88,719 (11,940) 19,202 95,981 (3,442) 92,539 92,539 Woven Rs000 4,457,721 4,457,721 379,787 (40,318) 1,434 340,903 (71,979) 268,924 (39,619) 229,305 Woven Rs000 Retail Adjustments Rs000 Rs000 61,890 61,890 1,812 (730) 1,082 (82) 1,000 1,000 Retail Rs000 47,614 1,373 48,987 Consolidation Adjustments Rs000 Total Rs000 8,643,1 83 8,643,183 680,426 (87,632) 17,885 610,679 (94,791) 515,888 (39,619) 476,269 Total Rs000
Total segment revenues Revenues from external customers Segment profit Net finance costs Fair value gains on outstanding forward exchange contracts Profit before taxation Income tax expense Profit after taxation Non-controlling interests Profit attributable to owners of the parent June 30, 2012
Knitwear Fine Knits Rs000 Rs000 ASSETS Other segment assets Deferred income tax assets Consolidated total assets LIABILITIES Other segment liabilities Current income tax liabilities Deferred income tax liabilities Borrowings Consolidated total liabilities Equity attributable to shareholders of parent Preference share capital in subsidiaries Non-controlling interests 2,540,259 10,372 2,550,631
1,310,000 2,641,778 2,409 18,474 1,312,409 2,660,252
(369,943) 6,1 69,708 32,628 (369,943) 6,202,336
745,950 4,581 96,491 438,717 1,285,739
678,739 105 17,1 69 148,478 844,491
942,098 44,075 61,859 222,389 1,270,421
11,362 7,701 19,063
(266,676) 2,1 11,473 48,761 175,519 (3,626) 813,659 (270,302) 3,149,412 2,875,417 177,507 6,202,336
OTHER INFORMATION Capital additions Depreciation and amortisation
47,864 51,878
34,241 56,300
54,900 89,363
1,088 1,887
138,093 199,428
31. SEGMENTAL INFORMATION - GROUP (CONTINUED) June 30, 2011 Knitwear Rs000 ASSETS Other segment assets Deferred income tax assets Consolidated total assets LIABILITIES Other segment liabilities Current income tax liabilities Deferred income tax liabilities Borrowings Consolidated total liabilities Equity attributable to shareholders of parent Preference share capital in subsidiaries Non-controlling interests 2,553,037 7,966 2,561,003 Fine Knits Rs000 Woven Rs000 Retail Rs000 45,017 1,454 46,471 Consolidation Adjustments Rs000 (344,897) (344,897) Total Rs000 6,636,633 21,1 32 6,657,765
1,618,847 2,764,629 2,618 9,094 1,621,465 2,773,723
798,341 4,423 75,630 595,483 1,473,877
589,1 03 100 13,306 375,777 978,286
913,318 13,654 59,1 61 468,915 1,455,048
9,469 8,078 17,547
(370,734) 1,939,497 18,1 77 148,097 1,448,253 (370,734) 3,554,024 2,501,483 448,937 153,321 6,657,765
OTHER INFORMATION Capital additions Depreciation and amortisation Geographical information
54,641 56,235
27,845 58,465
98,523 80,658
1,136 2,035
182,145 197,393
Mauritius Madagascar Asia South Africa Total
Revenues from External Customers 2012 2011 Rs000 Rs000 6,522,711 5,760,804 2,566 5,897 1,639,759 1,576,789 478,147 532,750 8,643,183 7,876,240
Non-Current Assets 2012 2011 Rs000 Rs000 1,644,158 1,632,1 10 307,467 359,218 274,052 278,004 399 354 2,226,076 2,269,686
Capital Additions 2012 2011 Rs000 Rs000 97,468 76,1 66 14,148 17,489 26,242 88,027 235 463 138,093 182,1 45
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.
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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 Corporate groups with common Directors/ Shareholders Rs000 Corporate groups with common Directors/ Shareholders Rs000 Key Management Personnel Rs000 1,861 75,257 2,161 2,036
June 30, 2012
Treasury and corporate management fees Amount due to Amount due from Short term benefits Other post employment benefits Dividend
Related Companies Rs000 25,952 74,670 5,583 -
June 30, 2011
Treasury and corporate management fees Amount due to Amount due from Short term benefits Other post employment benefits Dividend
Related Companies Rs000 19,383 4,934 2,491 -
Key Management Personnel Rs000 3,854 62,1 78 1,991 1,1 20
Directors 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 COMPANY 2012 Rs000 173,383 374,870 103,844 2011 Rs000 100,077 360,937 57,1 14
Amount due from subsidiaries Amount due to subsidiaries Dividends from subsidiaries 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 Groups and Companys 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 Groups and the Companys 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 Groups and the Companys 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 Groups and Companys overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Groups and Companys 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 Mauritian Rupee Euro United States Dollar Loans - Fixed Mauritian Rupee Euro Finance lease Mauritian Rupee Bills Discounted Mauritian Rupee Euro United States Dollar Preference Shares Mauritian Rupee Debentures Mauritian Rupee 2012 Prime lending rate Euribor + 1.5%/ + 3.0% Libor + 1.5%/ + 3.0% Prime lending rate + 1% Euribor + 3% 8% - 13% Prime lending rate Euribor + 1.5%/ + 3.5% Libor + 1.5%/ + 3.5% 5% - 9% Bank lending rate + 1.0% 2011 Prime lending rate Euribor + 1.5%/ + 3.0% Libor + 1.5%/ + 3.0% Prime lending rate + 1% Euribor + 3% 10% - 13% Prime lending rate Euribor + 1.5%/ + 3.0% Libor + 1.5%/ + 3.0% 5% - 9% Bank lending rate + 1.0%
109

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 2012 2011 Rs000 Rs000 825 2,729 THE GROUP 2012 2011 Rs000 Rs000 727 1,061 THE GROUP 2012 2011 Rs000 Rs000 1,801 2,1 04 THE COMPANY 2012 2011 Rs000 Rs000 212 283 THE COMPANY 2012 2011 Rs000 Rs000 THE COMPANY 2012 2011 Rs000 Rs000 -
Effect higher/lower on post tax profit Euro-denominated borrowings
Effect higher/lower on post tax profit USD-denominated borrowings
Effect higher/lower on post tax profit (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 Groups 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 At Call Rs000 At June 30, 2012 Borrowings Trade and other payables At June 30, 2011 Borrowings Trade and other payables 320,604 2 Less than 3 months Rs000 293,765 1,070,203 Between 3 months and 1 year Rs000 62,894 456,864
Over 1 year Rs000 164,050 3,404
939,332 -
304,458 1,538,1 67
88,1 18 260,267
239,927 -
34. FINANCIAL RISK MANAGEMENT AND POLICIES (CONTINUED) 34.1 Financial risk factors (continued) THE COMPANY At call Rs000 At June 30, 2012 Borrowings Trade and other payables At June 30, 2011 Borrowings Trade and other payables (d) Credit risk The Groups 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 Groups 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. 386 Less than 3 months Rs000 82 3,729 Between 3 months and 1 year Rs000 14,000 374,870
Over 1 year Rs000 28,000 -
479 -
77 4,721
14,000 360,937
42,000 -
111

34. FINANCIAL RISK MANAGEMENT AND POLICIES (CONTINUED) 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 2012 Sell Buy FC000 FC000 11,382 6,309 454 6,630 6,704 2,272 36,062 142,173 5,823 3,170 818 1,495 14,461 243,536 366 10,419 316,441 176 4,405 519,094 175,337 174,320 71,437 102,911 2011 Sell Buy FC000 FC000 8,943 12,1 73 250 11,831 3,1 75 48,491 134,232 1,667 2,030 1,395 8,991 12,729 491,276 225 19,040 146,351 7,030 546,1 83 46,575 94,1 57 103,532 577,254 Contract Value 2012 2011 Rs 000 Rs 000 453,573 251,405 18,092 293,378 296,652 146,413 577,222 159,946 100,722 41,276 59,462 356,369 485,1 03 9,963 523,522 140,494 196,874 544,984 45,781 54,404 59,821 333,538 Fair Value 2012 2011 Rs 000 Rs 000 5,918 4,735 17 2,313 4,213 45 3,093 11,851 1,042 (4,180) (461) (1,576) 27,010 (5,636) 4,726 (9) 289 5,298 (813) 6,286 (1,016) 9,1 25
Outstanding contracts
Sell currency EUR and buy currency USD Sell currency EUR and buy currency MUR Buy currency EUR and sell currency MUR Buy currency EUR and sell currency GBP Sell currency GBP and buy currency USD Sell currency GBP and buy currency MUR Sell currency ZAR and buy currency EUR Sell currency ZAR and buy currency USD Sell currency ZAR and buy currency MUR Sell currency USD and buy currency MUR Sell currency USD and buy currency INR Sell currency GBP and buy currency INR Sell currency EUR and buy currency INR Total
1.27 38.60 0.81 1.57 47.20 12.91 8.19 3.65 30.11 54.99 87.33 68.84
1.42 40.36 0.90 1.61 46.09 6.90 4.07 27.95 46.38 74.22 64.20
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 Rs 000 10,452 415 (23,804) (12,937) 2011 Rs 000 7,617 7,861 (23,518) (8,040)
Euros GBP US Dollar
34. FINANCIAL RISK MANAGEMENT AND POLICIES (CONTINUED) 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 Groups 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 As at June 30, 2012 Available-for-sale financial assets Forward exchange contracts Total As at June 30, 2011 Available-for-sale financial assets Forward exchange contracts Total 34.3 Capital risk management T he primary objectives of the Group and Company, when managing capital, are to safeguard the entitys 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: THE GROUP 2012 2011 Rs000 Rs000 Total debt (note 15) Less: cash and bank balances (note 27(b)) Net Debt Total equity Gearing Ratio 813,659 (241,768) 571,891 3,052,924 18.73% 1,448,253 (198,207) 1,250,046 3,1 03,741 40.28% THE COMPANY 2012 2011 Rs000 Rs000 42,468 (9,355) 33,113 894,397 3.70% 56,556 (7,957) 48,599 886,794 5.48% 9,1 25 9,1 25 3,243 3,243 Level 1 Rs000 Level 2 Rs000 27,010 27,010 Level 3 Rs000 3,477 3,477
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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; - G overnment 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 Previously Stated Reclassifications As Restated Rs000 Rs000 Rs000 Cost of sales Other operating (losses)/income Administrative and sellings expenses Net finance costs Basic and diluted earnings per share Rs. (6,611,417) 77,719 (994,583) (99,1 01) 2.07 104,054 (6,507,363) (108,247) (149) 4,342 (30,528) (994,732) (94,759) 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 SUMMARY 2012 Rs000 685,865 1,534,899 654,653 2,875,417 610,679 515,888 101,808 2012 Rs000 685,865 121,396 87,136 894,397 104,008 101,515 101,808 Restated 2011 Rs000 685,865 1,1 78,885 636,733 2,501,483 231,582 214,467 55,994 2011 Rs000 685,865 113,500 87,429 886,794 57,024 56,339 55,994 Restated 2010 Rs000 685,865 1,084,597 681,817 2,452,279 284,811 229,460 45,813 2010 Rs000 685,865 113,500 87,084 886,449 62,530 63,1 60 45,813
(a) THE GROUP Stated capital/Issued and paid up share capital Retained earnings Other reserves Amount attributable to owners Profit before taxation Profit for the year Dividends to Ordinary Shareholders (b) THE COMPANY Stated capital/Issued and paid up share capital Revaluation surplus Retained earnings Total equity Profit before taxation Profit for the year Dividends to Ordinary Shareholders
Proxy Form
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 Companys Registered Office, 5th Floor, Ebne Skies, Rue de lInstitut, Ebne and at any adjournment thereof. I/We direct my/our proxy to vote in the following manner. RESOLUTIONS 3. 4. 5. 6. To consider and adopt the Groups and the Companys audited financial statements for the year ended June 30, 2012. To appoint Mr. Maurice P. Dalais as Director of the Company. To appoint Mr. Roger Espitalier Nol as Director of the Company. 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. To ratify the remuneration paid to the auditors for the year ended June 30, 2012. day of 2012. FOR AGAINST (Please vote with a tick) ABSTAIN
7.
Signed this
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, Ebne Skies, rue de lInstitut, Ebne 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. CIEL Textile Limited Annual Report 2012
115
Postal 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 Companys Registered Office, 5th Floor, Ebne Skies, Rue de lInstitut, Ebne and at any adjournment thereof. I/We desire my/our vote to be cast on the Resolutions as follows: RESOLUTIONS 3. 4. 5. 6. To consider and adopt the Groups and the Companys audited financial statements for the year ended June 30, 2012. To appoint Mr. Maurice P. Dalais as Director of the Company. To appoint Mr. Roger Espitalier Nol as Director of the Company. 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. To ratify the remuneration paid to the auditors for the year ended June 30, 2012. FOR AGAINST (Please vote with a tick) ABSTAIN
7.
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, Ebne Skies, Rue de lInstitut, Ebne), forty-eight (48) hours before the Meeting.
117
Notes
119
Notes

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Dear Shareholder, The Board of Directors (the Board) of CIEL Textile Limited (the Company) is pleased to present its

P. Arnaud Dalais Chairman

CIEL Textile Limited Annual Report 2012

Group Financial Chairmans Highlights and Ratios Statement

2 CIEL Textile Limited Annual Report 2012

Corporate Corporate Social and Governance Report Environmental Responsibility

Other Statutory Statement of Disclosures Directors Reponsibilities

CIEL Textile Limited Annual Report 2012

4 CIEL Textile Limited Annual Report 2012

CIEL Textile Limited Annual Report 2012

and 1,600 tonnes of yarns

6 CIEL Textile Limited Annual Report 2012

and 3,500 tonnes of knitted fabric

and 7.2 million metres of woven fabric

CIEL Textile Limited Annual Report 2012

June 30, 2012

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CIEL Textile Limited Annual Report 2012

10 CIEL Textile Limited Annual Report 2012

CIEL Textile Limited Annual Report 2012

Group Financial Highlights and Ratios

LIQUIDITY AND GEARING RATIOS

PROFIT AFTER TAXATION (Rs. M)

RETURN ON CAPITAL EMPLOYED

NET BORROWINGS (Rs. M)

25 20 % 15 10 5 0 2008 2009 2010 2011 2012

NET PROFIT MARGIN

14 CIEL Textile Limited Annual Report 2012

CIEL Textile key dates

16 CIEL Textile Limited Annual Report 2012

18 CIEL Textile Limited Annual Report 2012

CIEL Textile Limited Annual Report 2012

Executives Report (Contd)

20 CIEL Textile Limited Annual Report 2012

J. Harold Mayer Chief Executive Officer September 26, 2012

CIEL Textile Limited Annual Report 2012

CIEL Textile Limited Annual Report 2012

Ferney Spinning Mills Limited (FSM or Ferney)

CIEL Textile Limited Annual Report 2012

CIEL Textile Limited Annual Report 2012

CIEL Textile Limited Annual Report 2012

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CIEL Textile Limited Annual Report 2012

32 CIEL Textile Limited Annual Report 2012

Corporate Governance Report Year Ended June 30, 2012