Who we are 3 Our Vision 4 Our Values 5 Chairman’s Message 6 Managing Director’s Report 7 Review of Operations 9 Aviation 9 Marine 9 Liquefied Petroleum Gas (LPG) 10 Retail 10 Contents Commercial 11 Lubricants 12 Customer Service Centre 12 Product Supplies and Distribution 13 Human Resources 15 Corporate Social Responsibility 15 Health, Safety, Security and Environment 16 History of Vivo Energy in Mauritius 18 Directors’ Report 24 Secretary’s Report 27 Corporate Governance Report 28 Statement of Compliance 53 Independent Auditor’s Report 54 Income Statement 55 Statement of Comprehensive Income 55 Statement of Financial Position 56 Statement of Changes In Equity 57 Statement of Cash Flows 58 Notes to the Financial Statements 59
Vivo Energy Mauritius Limited Annual Report 2014 1 A strong and growing presence in 16 countries across Africa
Who we are - Vivo Energy is the company behind the Shell brand in Africa and is jointly owned by Vitol, Helios Investment Partners and Shell. The company has a strong and growing presence in 16 countries across Africa. It sources, distributes, markets and supplies Shell’s high-quality fuels and lubricants to retail and commercial customers across the continent.
Vivo Energy was established on 01 December 2011 to distribute and market Shell-branded fuels and lubricants. Vitol and Helios each own 40% of Vivo Energy, with Shell holding the remaining 20%. Shell and Vivo Lubricants is 50% owned by Shell and 50% owned by Vitol and Helios Investment Partners.
Vivo Energy operates in Retail, Commercial Fuels, Marine, Aviation (in partnership with Vitol Aviation), Liquefied Petroleum Gas and Lubricants in Mauritius. The Shell brand has been present in Mauritius since 1905.
Vivo Energy Mauritius Limited (VEML) employs 124 people, operates 44 retail stations under the Shell brand and has access to 48,253 cubic metres of fuel and 2,675 metric tonnes of LPG storage capacity.
2 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 3 Creating Africa’s most respected energy business.
Our Vision - Our vision is to create Africa’s most respected energy business. Our Values - We are judged by how we act: our reputation is upheld by how we put into practice our core values of honesty, integrity and respect for people. These To create Africa’s most respected energy business is not an end in itself. It is the logical values underpin all the work we do and are the foundation of our business. We always consequence of doings things the right way, realising the full potential of our people and uphold them, in whatever situation we find ourselves in. Indeed, they are crucial to our our business partners, and creating a new benchmark for quality, excellence, safety and success and growth as a company, and to achieving our vision. responsibility in Africa’s downstream energy marketplace. These core values are encapsulated in our General Business Principles and Code We know that respect is earned and that actions speak louder than words. We strive of Conduct, which outline clear, concrete and detailed principles and ethical actions constantly to behave ethically, responsibly and honourably in everything we do. We take by which we should conduct ourselves, and drive the behaviour expected of every care of our people, our customers and the local communities and the environment in employee, in every Vivo Energy operation, at all times. which we operate. We employ a diverse group of people and value the benefits this brings. We respect the human rights of our employees and strive to provide them with safe working We meet the highest international Health, Safety, Security and Environmental (HSSE) conditions, promote the development of their talents and give them channels to report standards. We continue to invest in our operations, building stronger partnerships and concerns. implementing world-class safety practices. We set an example for others to follow. We also firmly believe in the fundamental importance of trust, openness, teamwork, Above all, we will grow our business by hiring, training and motivating the best local professionalism and pride in what we do. people, sharing the rewards of success and investing in the communities in which we operate.
4 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 5 Dear Shareholder, As we move forward, it is of utmost I am pleased to report on our 2014 even closer attention to these external importance that we strengthen our ties company performance, our third full year factors and their effect on our business. Although 2014 was a challenging year, with all stakeholders, particularly with you, as Vivo Energy Mauritius Limited. The situation has not only tested our we remained focused on our strategic our shareholders, who have placed your professionalism in dealing with such priority of growing your business. As a trust in us. While continuing to deliver on A lot has been said in 2014 about challenges but has also been a measure of result, our initiatives in the marketplace our strategic commitment, we will drive Mauritius becoming a petroleum hub the resilience of our business. Given that delivered encouraging results and allowed operational performance in order to in the region. VEML has been actively we performed well in the other business us to maintain our leadership position, create value for you. supporting this national aspiration. areas, we are still on track to meet our despite the highly competitive market. plan to grow the business in line with our Report I would like to take this opportunity to With the partial liberalisation of marine medium and long term strategy.
Message This outcome reaffirmed my confidence express my appreciation to our Managing fuels from the beginning of 2014, we have
that we will continue to capture smart Director, Mr. Pawan Juwaheer, who been at the forefront of importing our Conducting our business with the Managing growth opportunities as they emerge. manages our company with commitment own cargoes. We also introduced a new highest control standards is important Director’s
Chairman’s Chairman’s and ability, and to the employees of VEML grade, Marine Fuel Oil 380 cst, while also for us, our stakeholders and for you, our Our profit after tax was Rs 154 million for the unfailing dedication, hard work and enhancing our bunkering capacity with stakeholders. A Control Framework while our turnover was Rs 12.8 billion for passion that they display on a daily basis the new barge, Gulf Star 1. Meanwhile, Review was carried out by our Internal the year. Although these figures are lower to deliver their goals. I am convinced competition has increased as new Audit Team. This resulted in a “GOOD” than our 2013 results, the company had a that we have the right people to do what companies entered the storage landscape rating, which is a strong testimony solid year and we are satisfied with these needs to be done to continue to grow and commissioned their own storage reflecting the high level of integrity of our results, particularly given the economic our business in Mauritius in a smart way. facilities. More projects of this nature operations. climate. have been announced, both onshore and And lastly, I would like to convey offshore. Investment Our results were lower than expected my appreciation to my fellow board We have given ourselves the means to in the final quarter due to the drop in members for their support and for the The vehicle fleet has continued to grow compete effectively, with investment being the price of oil and rapidly fluctuating trust placed in me, as Chairman, during at a steady pace. However, the economic as intense as in previous years, allowing us currencies on the international market. the past three years. climate prevailing throughout 2014 has to grow the business. If they had been better, then we would brought a number of challenges too. have had an excellent year. Nonetheless, Some sectors that constitute our main We have upgraded the Causeway depot good work was achieved and the markets have been facing difficulties, to handle the expanded marine product company performed well overall. Christian Chammas including the construction industry. portfolio. We have built one new retail Chairman Generally, low growth has led to fiercer site in Laventure and upgraded a number The HSSE performance of VEML was competition, resulting in increased of others. Last, but not least, we have very good and goal zero was achieved. pressure on our margins in several replaced the purpose-built Tristar Glory Our reputation also continued to grow commercial operations. with a barge twice its capacity, Gulf Star and we are on our way to creating 1, which has been in operation since mid- the most respected energy business in The volatility in oil prices that we have November 2014. Mauritius and in Africa. We will always been experiencing since July 2014 has keep this vision front of mind. also inevitably impacted our inventories Customers Looking forward we expect 2015 to be and results. Our customers remain at the heart a period of turbulence and challenge. of everything we do and in 2014, we However, with this comes opportunity Business Performance innovated further to continue to improve and we will work hard to deliver what is Amidst these conditions, and despite our products and services. a challenging plan for your business. As falling oil prices impacting negatively in the previous years, strong emphasis our Marine and Aviation businesses, We expanded our marine product will be placed on profitable growth and our 2014 performance remained good. portfolio with the introduction of Fuel development. Whilst cheap oil is generally good for the Oil 380 cst making us the first company consumer, we were hit by holding stocks in the country to offer this product to as values declined by almost US$ 300 per customers. We continued to offer better metric tonne over a six month period. products to our customers by introducing This has been a wakeup call for us to pay Shell Helix Ultra with Shell PurePlus
6 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 7 Technology, a revolutionary process that governmental organisation, in educating recordable incidents and zero recordable converts natural gas into crystal-clear 900 children about workforce readiness, spills. base oil. entrepreneurship and financial literacy. Two one-day camps entitled “Vivo Energy Outlook We enhanced our sites to make Youth Day”, held in April and September, The economic environment continues customer experience as rewarding as proved a real success; attracting over to be more than challenging. VEML’s it is convenient. We partnered with 130 students and with 19 employees country leadership has prepared the reputable companies such as QuickFix volunteering and acting as mentors. company to meet the challenges of of ABC Group, Food Lovers and DHL 2015, and the years to come. We will to expand our retail offering, all with Traditionally, we have engaged adult continue to overcome obstacles through the aim of making our service stations drivers and professionals in road the commitment and professionalism one-stop shops. Thanks to the hard work safety initiatives. However in 2014, of our employees, customers and other of the local team at the end of 2014, we in partnership with the Ministry of stakeholders. succeeded in launching Shell Gas Lite Education and Human Resources, we - the first light-weight cylinders on the staged a Road Safety Day for children in I look forward to a profitable 2015 with market - at the beginning of 2015. all of the primary schools in Mauritius and the implementation of many key projects. Rodrigues that reached 100,000 children. We will keep investing and innovating to People improve our offer to customers, creating People are the cornerstone to Setting high standards for environment value for our shareholders, and keeping Aviation 2014 started well for Marine. The our success. Our growth plans are responsibility is important to us. Beyond our employees proud and motivated to Supplying products and related services business leveraged 2013 initiatives related underpinned by the investments we minimising the environmental impacts of work for the company. to the aviation industry. to the partial liberalisation of fuel imports make in recruiting, training and motivating our operations, we continued to invest in and the introduction of Marine Fuel Oil the best local people. In 2014, VEML the upgrade of the Roche Bois area. I am grateful to Board of Directors for The Aviation business was mainly 380 cst. VEML was the first company to recruited 13 new employees and two their support and guidance throughout impacted by the sharp decrease of Jet A1 introduce this product grade in Port- young graduates joined under the Heath, Safety, Security and the year. prices. Prices fell continuously, decreasing Louis in March 2014 and capitalised on Youth Employment Programme. 13 Environment (HSSE) 45% from January to December 2014, the growing demand. The business grew other employees were promoted and Our commitment to achieving and I would like to record my thanks to all with the peak decrease of 30 points taking faster than the industry, gaining market appointed to new roles. maintaining the highest international staff for their hard work and dedication place between October and year-end. share and being able to grow despite a Health, Safety, Security and Environment to deliver on our plan. My gratitude also This resulted in windfall losses on stocks downward trend on prices in the first ten Capacity building went hand in hand (HSSE) standards is at the heart of our goes to our contractors and customers and erosion of contractual margins. The months of 2014 (minus 10%).
with the demand that resulted from business and is a key differentiator for with whom we work closely. Review of Aviation business performed below plan, increased projects during the year. The Vivo Energy in Africa. Being the best in both in terms of volumes and margins. Adversely, from October, Marine Fuel Oil development of talent has created the HSSE is not an objective that sits apart And last, I would like to convey my Operations and Marine Gasoil world prices melted. dynamism, experience and skills needed from our overall ambitions. It is an integral appreciation to my management team The industry environment also remained While prices dropped by 55% between to deliver our plan. The average number and essential part of our business plan. members for their unflinching support challenging with low margin levels still January and December, the sharpest of training days per employee was 4.4 In 2014 our priority remained the health and collaboration in 2014. prevailing during the tender process. decrease of forty five points took place compared to 2.3 in 2013. and safety of our employees, contractors, in the last quarter. Port-Louis was no customers and others who are impacted We will continue to work hard to be Compared to 2013, industry volume longer competitive compared to its direct We continued with our recognition by our activities. recognised for our products and services; grew by 4%, with the increasing number competing ports (Singapore and Durban), program to reward and recognise rigorous standards of safety; exemplary of flights to the country. Our Aviation and as a result, demand slowed. A price performance and behaviour. We know that our retail, commercial ethical conduct; high quality teams; and business is prepared to adapt to war started in the market, impacting and marine customers recognise and our care for the communities in which we challenges and seize opportunities of the unit margins on all product grades. This Community Investment value the standards we set ourselves operate. market. pressure on prices was further increased In 2014, we engaged in high impact social in HSSE and social performance. All by the need to create tank capacity to investment projects aimed not only throughout the year, we maintained our Pawan K Juwaheer accommodate forthcoming shipments. at benefiting the community, but also focus on HSSE and compliance. Goal Managing Director Marine At the end of the year, positive results involving our employees more. zero was recorded thanks to the effort of Providing Marine Fuel Oil, Marine Gasoil were completely wiped out, and became all stakeholders involved and we closed and Shell Lubricants. negative. We continued supporting Junior 2014 reaching 1052 days without Lost Achievement Mascareignes, a non- Time Injury. In addition, we had zero
8 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 9 Review of Operations Review of Operations
Despite these unfavorable conditions, we guaranteeing a continuous and regular the Shell brand in the country. Shell With regards to operational excellence, continued our long-term objectives. In supply of LPG to our customers. We Unleaded Extra and Shell FuelSave Diesel we continued the “Mystery Motorist November, we introduced a new barge have a wide distribution network which with fuel economy formulation are the Program” to monitor and ensure quality which doubles our logistics capabilities at consists of some 900 resellers throughout latest differentiated products to be and enhance service to customers on site. anchorage. We also increased our storage Mauritius and Rodrigues. In addition, added to our network. These products capacities, both for Fuel Oil and Marine the company provides a home delivery have been designed by Shell, the pioneer VEML invested substantially in upgrading Gasoil. VEML wants to contribute to the service in selected regions through a in differentiated fuels development, to and growing its network and opened a development of Port-Louis maritime network of resellers. provide an upgraded offer to customers; new service station in Laventure in 2014. activities and is looking forward to and enable driving longer distances while grasping growth opportunities. ShellGas is sold in a variety of cylinder ensuring better efficiency and protection To make payment even more convenient sizes for various applications: 5kg and of engines. These improved fuels are sold for customers, besides our Shell Card, 12kg for domestic purposes, 50kg for at the same price as ordinary fuels. the company has continued rolling out Liquefied Petroleum Gas both domestic and commercial use, payment by VISA cards across its network. Providing LPG in various cylinder sizes 12kg for commercial use and industrial Our focus on continuous improvement and bulk for domestic, commercial and applications and 12/15kg for forklift ensures that our service stations are 2015 looks promising for further growth industrial applications. applications. Our product range is backed clean, efficient and welcoming with all through new offers and the planned by our expertise, dedicated account offering differentiated Shell fuels, Shell opening of a new service station. Liquefied Petroleum Gas (LPG), being managers and rigorous safety standards. lubricants and Shell Gas. We offer Shell a clean and convenient source of To respond to customers’ expectations Autogas, car wash and tyre service energy, is used worldwide for numerous and needs, in 2014 the company facilities on selected sites. Other services Commercial business applications in industry and prepared for the introduction of Shell Gas include Shell Card, an easy-to-use, Supplying transport and industrial fuels transportation, as well as for domestic Lite, the first lightweight LPG cylinders convenient and secured payment card to business-to-business customers in the use. VEML supplies Shell Gas to for domestic use in Mauritius. The new which ensures an efficient monitoring country. commercial sectors such as textiles, cylinder was launched at the start of of fuel expenses, Shell Select and Shell hotels, livestock breeding, catering, 2015 in Mauritius. Made from composite Shops which offer convenience retailing VEML is the preferred fuels supplier restaurants and industries. Easy to materials it is lighter, rust-free and more for quick purchases. for business-to-business customers. The transport and to store, LPG has long manageable than the traditional metal company delivers fuels to customers in been a competitive source of energy cylinders on the market. Besides being Our overall promise to customers is to the transport, construction, manufacturing, and for domestic applications it can be 7kg lighter than metal cylinders, the level provide them with consistent, clean and power, agriculture, hotels, restaurants and cheaper than electricity. of gas in the Shell Gas Lite cylinder is safe sites, and with smiling, friendly service textile sectors. visible as the new cylinder is translucent, at “every site, every visit, every day”. In recent years, the market has become allowing customers to see when the LPG With Shell’s high quality portfolio of more competitive, although despite this, is running low. In 2014, Retail experienced growth in differentiated fuels, the company offers the company has managed to limit the both gasoline and gasoil. A number of innovative energy solutions that add value impact on our LPG business, resulting in marketing activities were organised, to to the businesses, enhance the efficiency improved business performance for 2014, Retail leverage the benefits of Shell FuelSave of the operations and reduce the compared to 2013. The highest quality products and a Diesel, which provides fuel economy environmental impact of its commercial world-class retail experience. from the very first fill. The fuel promotion customers. The company draws upon VEML continually strives to deliver better, “Win a trip - visit your loved ones” was Shell’s expertise as a global leader in fuels safer and more reliable ways to meet VEML operates a well-distributed launched to reward our customers and innovation and R&D, and on its constant, the energy needs of customers, while network of 44 service stations under the winners won an air ticket to travel to continuing focus on further enhancing a destination of their choice. fuels technology and developing more efficient and cleaner products. In a continued effort to improve our offer on Retail service stations, VEML partnered Delivering Shell’s high-tech, differentiated with reputable companies to offer new products to customers’ high-performance services, with the aim of making our machines offers many diverse benefits, service stations one-stop-shops. including improved engine performance
10 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 11 Review of Operations Review of Operations
and protection, and reduced fuel giving our business-to-business partners lubricants, complaints handling, invoicing our agents to provide a quality service to consumption. access to Shell’s high quality lubricants and responding to queries on customer our customers. technology, we are also able to improve accounts. Our services also include 2014 was a year with negative industry their business performance. We provide debtor follow up, maintenance calls growth as the market declined compared them with not only innovative solutions management, lubricants and Liquefied Product Supplies and to 2013. This has resulted in competition but also expert advice and technical Petroleum Gas delivery scheduling and Distribution being fiercer and pressure on margins support to meet their most demanding telesales and telemarketing support. Supplies higher. business challenges. Calls are handled by our trained agents who act as business and service focal VEML coordinates the replenishment However, despite this, and thanks to 2014 results were above plan despite points for HSSE, Commercial, Lubricants, programme on behalf of the oil industry our customers’ continued trust in the a very challenging year in some key LPG, Aviation and Marine. We face an with the State Trading Corporation (STC) company, we have maintained a profitable segments. Our major partners renewed ever-growing demand for services both for both main products and LPG. position. their trust in the quality of the Shell internally and externally. lubricants as well as the excellent service Some 70,552 metric tonnes of LPG and from Vivo Energy. We continued to Besides being the only petroleum 839,328 metric tonnes of main products Lubricants innovate by introducing Shell Helix company operating such comprehensive were imported in 2014. LPG is received Providing a full range of lubricants Ultra with Shell PurePlus Technology - a customer service in the country, we are in consignments of 2,000 - 3,000 metric for automotive, marine and industrial revolutionary process that harnesses the continuously revisiting our processes and tonnes from LPG tankers while white and applications. power of natural gas, bringing together striving to maintain high performance black oils are received in 60,000 metric over 3,500 patents and 40 years of through focus and emphasis on people tonne tankers, combining oil industry and VEML offers the best of Shell’s complete research - to convert natural gas into development and staff motivation. Central Electricity Board requirements. range of lubricants and services to retail, crystal-clear base oil with virtually no commercial and marine customers, impurities. In September 2014, the company With partial liberalisation of bunker fuel available from our comprehensive invested in a new telephone system for imports, VEML worked with Vitol Trading network of Shell service-stations, spare- With such good news and Vivo Energy the Customer Service Centre providing for the import of marine products in parts shops and franchised as well as continuing to receive the full support of a number of new functions including call 2014. independent workshops. These include Shell Lubricants, we plan for better results recording, on line coaching and call review. Shell’s high quality lubricants; industry- in 2015. These new functions enable us to better The Shell Group Maritime Assurance leading technological and technical monitor our call centre and further train System (GMAS) for vetting tankers is expertise; and personal, dedicated customer service. Customer Service Centre A one-stop shop for our customers. In the retail segment, our superior automotive lubricants are specifically Through our call centre, we provide basic designed for customers who need the services, such as order taking from retail best formulations for their vehicles. By and commercial customers for fuels and
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for white oils and black oils. A fleet of employee was 4.4 compared to 2.3 in 17 vehicles distributes LPG cylinders 2013. 21 employees followed the career across the island to retailers, while bulk development training ‘Own Your Growth’ LPG is delivered through two specialised and four high performers participated in vehicles. Deliveries to marine customers an ‘Emerging Leaders’ workshop. is conducted either through bunkering barge or through pipelines at quays. We have in place a competitive reward and recognition programme for the contribution our people make through Human Resources performance-related pay and bonuses. Our people driving our performance. Excellent performance is recognised at quarterly staff communications days At Vivo Energy, we are committed to the and 16 employees were rewarded with continual development of our people. monetary special recognition awards We understand that, as a business, we in 2014. At the pan-African group level, can only be as good as the individuals VEML won the prestigious Vivo Award we employ, and for that reason we 2014 in the reputation category, with actively seek out people with the Mauritius winning a Vivo Award for rare combination of skill, experience, the third year in a row. Vivo Awards responsibility, commitment and ambition represent an opportunity for Vivo Energy that will help make VEML a respected employees to share best practice and and successful company and an employer celebrate outstanding performance. of choice. The company is very culturally diverse, which helps to bring different perspectives. Corporate Social Responsibility In 2014, VEML recruited 13 new employees, In addition, two young At Vivo Energy, we want to make a real graduates joined under the Youth and lasting difference to the communities Employment Programme. High in which we operate. We have chosen to performing leaders support all new focus on three key areas of community graduate recruits through coaching and investment: road safety, education and the help them grow through a mentoring environment. programme. The company also hired systematically utilised to ensure suitability marine and industrial customers. These of 3,000 metric tonnes capacity, in which three interns for short term assignments Our community investment programmes of all vessels before loading. Substandard two depots constitute a storage capacity VEML owns 50% equity. and helped them develop the skills they matter to us because we employ local vessels are therefore avoided, ensuring of 23,000 metric tonnes for white oils, need and acquire on-the-job experience. people and serve local businesses and better protection for Mauritian shores. 18,800 metric tonnes for black oils and The company holds 25% of the shares individuals. We want to create sustainable 1,175 metric tonnes for LPG, representing of Mer Rouge Oil Storage Terminal The company is committed to developing social and economic benefits for these Distribution 28%, 45% and 21% respectively of total Company Limited (MOST), a Joint and promoting local talent wherever communities and engage with them to VEML owns and operates two depots, oil industry storage capacity in Mauritius. Venture set up with the oil companies to possible. Employees who want to earn their respect and trust. namely Roche Bois and Causeway. Roche build and operate an additional 25,000 make a difference and have the energy, Bois is mainly used for the storage of VEML also operates three other depots metric tonnes motor gasoline depot in professionalism and drive to achieve More about our local projects is available white oils and includes an LPG depot on behalf of the oil industry, one at Fort Mer Rouge. more and motivate others are given on page 43. with a semiautomatic cylinder filling William for the storage of fuel oil on learning and growth opportunities. In plant, as well as packed lubricants stores. behalf of the Central Electricity Board, the Distribution to retail outlets, industrial 2014, 13 employees were promoted Causeway depot is essentially for the second one in Rodrigues Island, and the customers and the airport is effected and appointed to new roles. The storage and distribution of fuel oil to both third, a joint venture LPG storage, ESCOL, by a fleet of 11 bulk delivery vehicles average number of training days per
14 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 15 Review of Operations
Health, Safety, Security and This commitment is fundamental, Environment enduring and non-negotiable. Our First and foremost performance to date has been very positive, with the key metrics showing Our commitment to achieving and that we have met or exceeded our tough maintaining the highest international goals in many vital areas. Health, Safety, Security and the Environment (HSSE) standards is at We know that our retail, commercial and the heart of our business and is a key marine customers recognise and value differentiator for Vivo Energy in Africa. the standards we set ourselves in HSSE Being the best in HSSE is not an objective and social performance. We also know that sits apart from our overall ambitions. that the maintenance and advancement It is an integral and essential part of our of these standards will play a key role in business plan. winning new customers, building loyalty, engaging communities, motivating our Our goal is to lead by example and set employees and growing our business. a new benchmark for world-class HSSE policies and practices.
HSSE performance 2012-2014 2012 2013 2014 Fatality zero zero zero Total Recordable Cases 1 zero zero Total Recordable Occupational Illness Frequency zero zero zero Exposure Hours (‘000) 571 589 475 Lost Time Injury 1 zero zero
Spills NIL zero zero Kilometres driven (‘000s) 1, 921 2,141 1,902
2014 was the eighth year the company celebrated its annual safety day. Safety day is a significant milestone in the company’s journey to build a stronger safety culture in our pursuit of Goal Zero. The 2014 theme for the event was ‘‘Safety is in our hands.”
Our focus is on five critical areas: l Goal Zero – no harm to people or the environment is our number one priority. l Transport Safety – we invest significantly in training, technology and the adoption of best practice to continually improve in this area. l Process Safety – wherever we operate – service stations, terminals, LPG filling plants, tanks, shipping, aviation, and customer sites – we place the highest emphasis on process safety. l Contractor Safety Management – we require contractors and partners to manage their HSSE policies and practices in-line with ours. l Environmental Impact – we actively monitor our environmental impact, act decisively to minimise the impact of any incidents and are transparent in our public reporting.
We are equally diligent in reporting incidents and identifying potential incidents. It’s part of a company-wide culture that extends to employees, contractors and partners alike. Indeed, for our employees, adherence to HSSE policy and practice is a performance target linked directly to their pay.
16 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 17 History of Vivo History of Energy in Mauritius
Vivo Energy, a Shell licensee in 16 African markets, was established on 1st December 2011 to distribute and market Shell-branded fuels and lubricants.
18 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 19 in 1982, BP Ocean Islands Limited’s activities in Mauritius were taken over by Shell to become Shell Ocean Islands Limited. Both The Shell Company of the Islands Limited and Shell Ocean Islands Limited were given the status of a Public Limited Company (plc) as a result of a change in British Company Law. On January 1st 1991, the businesses of the local branch of both The Shell Company of the Islands plc and Shell Ocean Islands plc were transferred to a locally incorporated company, Shell Mauritius Limited, in exchange for shares About Vitol About Helios Investment About Royal Dutch Shell in the latter. This change in corporate Partners structure underlines Shell’s confidence in Vitol has 40% shareholding Shell has a 20% shareholding the future of Mauritius. In addition, the in Vivo Energy Helios Investment Partners in Vivo Energy. newly incorporated company was floated has a 40% shareholding in on the Mauritian Stock Exchange and the Vitol is one of the world’s largest Vivo Energy. The Shell name is one of the world’s Mauritian public currently owns 22.85% independent energy trading companies most recognised and respected. With Vitol and Helios each own 40% of Vivo partnership with Blyth has been the of its shares. with revenues of $307 billion in 2013. Helios is an Africa-focused private equity operations in over 70 countries and Energy, with Shell holding the remaining cornerstone of a successful development. They are physical traders who find, firm managing funds totaling $2 billion. nearly 90,000 employees worldwide, Shell 20%. Shell and Vivo Lubricants is 50% Most of the sites of current service During its 110-year presence in extract, refine, trade, store and transport Established in 2004, the firm is led and has expertise, experience and resources owned by Shell and 50% owned by Vitol stations, depot and customer portfolio Mauritius, the company has built up a materials and resources from where managed by a predominantly African that cover the full spectrum – from and Helios Investment Partners. Shell were acquired during this time. comprehensive business network in supply is abundant to where demand is team, bringing international capital and upstream to downstream. remains the overarching customer-facing the energy scene, backed up by strong great. knowhow to the continent. brand and the name on Vivo Energy’s As part of a regional corporate infrastructural investments, good technical The Shell brand is in Vivo Energy’s care fuels and lubricants. reorganisation in the late 1950s, the Shell know-how and professionalism. VEML With more than 200 ships at sea at any The firm has a record of successful wherever we operate in Africa. We Company of East Africa was replaced by accounts for nearly half of the imported given time and over 5 million barrels of investments, ranging from start-ups to understand and value the brand equity Vivo Energy operates in Retail; the Shell Company of the Islands Limited, energy demand of the island and is crude oil and products traded every day, corporate carve-outs, building African associated with Shell’s fuels and lubricants. Commercial Fuels; Marine; Aviation a branch of a company incorporated present in all sectors of this business Vitol has 360º capability right along the market leaders in core economic sectors. Equally, we know that Shell’s reputation (in partnership with Vitol Aviation); in the United Kingdom. After the activity. supply chain – from the well-head to the for quality and technological innovation Liquefied Petroleum Gas and Lubricants irreversible turmoil on the international service station. Helios’ combination of deep knowledge is reflected in products that combine in Mauritius. oil scene in the early 1970s and of the African market, extensive performance, efficiency and reliability recognising the need for oil companies Entrepreneurial, responsive and agile, Vitol investment experience, the capability to optimum effect. Building upon Shell’s The company employs 124 people, to have their own identity and direct has a breadth of resources and a degree to add value to portfolio company achievements in the African downstream operates 44 retail stations under the Shell dialogue with Government, Shell and of liquidity that enables the business to operations, and a strong network of market, our mission is to bring these brand and has access to 48,253 cubic Ireland Blyth Limited, who was then the seize opportunities quickly and make reliable and trusted local, industrial and exceptional products to the widest metres of fuel and 2,675 metric tonnes of oldest Shell agent in the world, negotiated things happen. financial contacts makes it an expert and possible customer base, adding value LPG storage capacity. the terms of the agency agreement. In highly insightful partner. wherever we can. 1976 Shell took over its own business Vitol’s increasing expansion into wholesale The Shell Company of East Africa Limited management in Mauritius, directly and retail marketing makes it the perfect Further details on Helios Investment For further information, visit: started its marketing operations in promoting its activities, engaging its own partner for Vivo Energy. The company’s Partners can be found at: www.shell.com Mauritius in 1905 through its managing staff and opening its own offices. ownership of Vitol Aviation and 50% www.heliosinvestment.com agents, Blyth Brothers and Company stake in VTTI – one of the world’s fastest Limited. As such, Shell was the first As a result of a decision made by the growing storage and terminals businesses international oil company to set up Shell and BP groups to deconsolidate – adds real strength and flexibility to the business on the island and its close their joint business interests in Africa Vivo Energy business.
Further details on Vitol are available on: www.vitol.com
20 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 21 Financial Statements
22 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 23 Directors’ Report (continued)
The directors present their annual report and the audited financial statements of Vivo Company law requires the directors to Mr Tim Taylor Energy Mauritius Limited (the “Company”) for the year ended 31 December 2014. prepare financial statements for each Mr Johan Depraetere (alternate to financial year which present fairly the Christian Chammas) PRINCIPAL ACTIVITIES financial position, financial performance Mr Bernard Le Goff (appointed on 03 and cash flows of the Company. In November 2014) The Company’s principal activity is the marketing and distribution of petroleum preparing those financial statements, the products. Its joint venture, Energy Storage Company Limited, is involved in the directors are required to: provision of LPG terminal usage facilities. CONTRACTS OF l select suitable accounting policies SIGNIFICANCE Report RESULTS AND DIVIDENDS and then apply them consistently; l make judgements and estimates The Company entered into the following The Company’s profit for the year is Rs 154,331,000 (2013 Rs 222,675,000). that are reasonable and prudent; contracts with related parties: Directors’ l state whether International Financial The financial statements of the Company for the year ended 31 December 2014 are Reporting Standards have been (a) with effect from 01 December 2011, set out on pages 55 to 92. The auditor’s report on these financial statements is on followed, subject to any material a licence agreement for the branding page 54. departures disclosed and explained of retail automotive fuel sites and other in the financial statements; and assets with Shell Brands International AG; The Company declared and paid the following dividends in 2013 and 2014: l prepare the financial statements on and the going concern basis unless it (b) with effect from 01 January 2014, a Dividend per share is inappropriate to presume that the contract for the provision of services with 2014 2013 Company will continue in business. Vivo Energy Africa Services Ltd. Rs Rs Declared on: The directors confirm that they have 14 November 2013 - 1.00 complied with the above requirements in MAJOR SHAREHOLDER 14 May 2014 2.80 - preparing the financial statements. 14 August 2014 1.40 - At 31 December 2014, Vivo Energy 12 November 2014 0.80 - The directors are responsible for keeping Mauritius Holdings BV holds directly 5.00 1.00 proper accounting records which disclose 77.15% of the ordinary share capital of with reasonable accuracy at any time the the Company. No other person holds 5% financial position of the Company and to or more of the ordinary share capital of Statement of Directors’ For the year ended 31 December 2014, the Company made a profit of Rs 5.26 (2013 enable them to ensure that the financial the Company. Rs 7.59) per share and declared an interim dividend of Rs 2.20 (2013 - statements comply with the Mauritian Rs 1.00) per share of which Rs 2.20 (2013 – Rs Nil) was paid during the year. Companies Act 2001. They are also responsible for safeguarding the assets SEGMENTAL ANALYSIS of the Company and hence for taking reasonable steps for the prevention and A business segment analysis of sales and detection of fraud and other irregularities. results is given in Note 5 to the financial statements. DIRECTORS SERVICE CONTRACTS responsibilities in respect of the financial statements The directors of the Company since 01 January 2014 and at the date of this Messrs Patrick Crighton and Pawan K report are: Juwaheer have service contracts without an expiry date. Mr Pawan K Juwaheer Service contracts of other directors are Mr Patrick Crighton terminable with a 3 months’ notice period Mr Roger K F Leung Shin Cheung by either party. Mr Christian Chammas
Vivo Energy Mauritius Limited Annual Report 2014 25 Directors’ Report (continued)
DIRECTORS’ INTERESTS The directors have no interests in the ordinary share capital of the Company, either Secretary’s Report directly or indirectly. to the Members of Vivo Energy Mauritius Limited THREE YEAR SUMMARY Under Section 166(d) of the Companies Act 2001 A three year financial summary is set out in Note 30 to the financial statements.
We certify that we have filed with the Registrar of Companies all such returns as are DONATIONS required of the Company under the Companies Act 2001.
During the year, the Company made donations of Rs 10,946 (2013 – Rs 10,913).
AUDITOR Executive Services Limited The fees charged by the auditor, PricewaterhouseCoopers, for audit and other services As per Christian Angseesing ACIS were: CORPORATE SECRETARY 26 March 2015
2014 2013 Rs000 Rs000 Statutory audit 1,750 1,960 Audit related services:- Quarterly reviews 558 535 Reporting to Group Auditors 225 250
The audit related services consist of (i) quarterly review of published financial statements and (ii) reporting to the group auditors. PricewaterhouseCoopers has indicated its willingness to continue in office and will be automatically reappointed at the Annual Meeting.
Approved by the Board of directors on 26 March 2015 and signed on its behalf by:
) DIRECTORS ) ) )
26 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 27 Corporate Governance Report (continued)
Mauritius Code of Corporate Governance compliance
The disclosures contained in this report are intended to provide the reader with a description of Vivo Energy Mauritius Limited corporate governance policies and practices. The directors firmly believe in and support high standards of corporate governance, which are critical to our business integrity.
The Board confirms compliance to the Mauritius Code of Corporate Governance. Holding structure Board of Directors Corporate
The Board of directors of Vivo Energy Mauritius Limited remains stringent when it comes to upholding the highest standards of integrity and transparency in their governance of the Company. The importance and the value of a balanced interplay between directors, management and shareholders within the Company has long been a major principle governing the conduct of Vivo Energy Mauritius Limited.
A Board of directors consisting of six directors manages Vivo Energy Mauritius Limited. Directors are appointed at the annual meeting of shareholders. They hold office until
ReportGovernance 80% 20% they retire or submit their resignation, unless removed earlier from office by the annual HV Investments BV Shell Overseas Investments (Netherlands) BV (Netherlands) meeting of shareholders.
The board delegates the day-to-day running of the Company to the Managing Director. The board delegates operational issues to the management team and is directly accountable to the shareholders for the performance of the Company. 100% During the year ended December 31, 2014, four board meetings were held. Vivo Energy Holding BV (Netherlands) The offices of Chairman and Managing Director were separated on November 17, 2003 in order to align board governance with the Mauritius Code of Corporate Governance. A Non-executive Director occupies the Office of Chairman and an Executive Director occupies the office of Chief Executive. The Chairman and Managing Director ensure 77.15% that the members of the board receive accurate, timely and clear information. Vivo Energy Mauritius Holding BV (Netherlands) 22.85% Local Shareholders
Vivo Energy Mauritius Limited
28 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 29 Corporate Governance Report (continued) Corporate Governance Report (continued)
Christian Chammas Bernard Le Goff Pawan K Juwaheer Patrick Crighton Mr Roger Leung (aged 60) (aged 53) (aged 51) (aged 55) (aged 68) Chairman and Non-Executive Director Non-Executive Director Managing Director Executive Director and Finance Manager Independent and Non-Executive Director Christian Chammas, joined Vivo Energy, A graduate from HEC Paris, Bernard Le Pawan Juwaheer was appointed Country Fellow of the Association of Chartered a Shell licensee in 16 African countries, Goff spent 24 years in Total, of which Chairman of Vivo Energy Mauritius Certified Accountants, Patrick Crighton Member of the Association of the as Chief Executive Officer on 01 January 17 years in Africa. Starting with various Limited in July 2006 and has since been a joined Vivo Energy Mauritius Limited in Chartered Institute of bankers in UK 2012. positions in the Finance area, he moved to member of the board. He was nominated January 1987. He has since occupied the and a fellow member of the Mauritius the general management of downstream as Managing Director in January 2012. Mr positions of Management Accountant, Institute of Directors, Roger Leung has Mr. Chammas has extensive experience activities (10 years), as Managing Director Juwaheer studied mechanical engineering Legal and Tax Accountant, Treasury been appointed a Director on Vivo
Profile of Directors in the energy sector. Prior to joining of Total subsidiaries in French Guinea, at the University of Manchester Institute and Corporate Accountant and Credit Energy Mauritius Limited board in June Vivo Energy, he was at Total for 31 Zambia and Tanzania, before taking over of Science and Technology, UK. He joined Manager before being appointed 2006. He retired from Barclays Bank in years where he held several positions in the position of Regional Vice President for the Company in 1986 and has over the Finance Manager in 2001. Mr Crighton September 2005 as Regional Corporate Central America, the Caribbean and India. Eastern and Central Europe of AS24, the years occupied different positions across is the holder of a Masters in Business Director. He has been trustee of the However, it is in Africa where most of his Total Group subsidiary supplying fuel to the business in Mauritius, Tunisia and Administration from Napier University. Barclays Employees Pension Fund and a career has developed. As an engineer, he European haulage contractors; he was in Kenya. Mr Juwaheer is a past Chairman of He is a member on the Vivo Energy Director of the Barclays Leasing Company worked on his first project in Nigeria. He charge of 20 countries. In 2009, he joined the Mauritius Chamber of Commerce and Mauritius Limited board since January (Mauritius) Limited. He also works as a later served as Chief Executive Officer for Galana where he was in charge of all Industry and is currently a member of the 2005. Consultant in business restructuring and in Total Group of Companies in Cameroon Southern and Eastern Africa downstream Chamber. performance optimisation. and Kenya. In his last role, Mr Chammas business, based in Maputo, Mozambique. Directorship in other companies was the Executive Vice President for the Mr Le Goff joined ORYX in February Directorship in other companies l Société Malgache des Pétroles Vivo Directorship in other companies Middle East and North Africa division of 2010 as Managing Director of ORYX l Vivo Energy Indian Ocean Holding Energy l Mauritius Development Investment Total’s refining and marketing division. South Africa, based in Johannesburg, (Chairman) Trust South Africa, in charge of all Southern and l Energy Storage Company Limited l Investment Professionals Fund Ltd Mr Chammas is based in London but Eastern Africa downstream business. l Mer Rouge Oil Storage Terminal (IPRO Fund Ltd) spends the majority of his time with Company Limited l Dolberg Asset Finance Limited employees, customers and other key Mr Le Goff joined Vivo Energy in August l Mauritius Cargo Community Services l Dolberg Financial Holding Ltd stakeholders in the Vivo Energy businesses 2012, as Regional Vice President for West Limited l Bank One Limited (Chairman) across Africa. Africa, Botswana and Namibia, based in l Barclays Bank Mauritius Limited l Indian Ocean Financial Holding Ltd Abidjan, Côte d’Ivoire. In September, l Société Malgache des Pétroles Vivo l BNI Madagascar he moved to Nairobi, Kenya, where he Energy took over the position of Regional Vice l Logistique Pétrolière SA (Madagascar) President for East and Southern Africa, also in charge of Indian Ocean Islands. He is a member of Vivo Energy Group Management Team and of Vivo Energy Executive Committee.
30 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 31 Corporate Governance Report (continued) Corporate Governance Report (continued)
Tim Taylor Directors’ emoluments (aged 68) Independent and Non-Executive 2014 2013 Director 0 – MUR 200,000 2 3 Between MUR 200,000 to MUR 1 m 2 2 Tim Taylor holds a BA (Hons) in Industrial Between MUR 1 m to MUR 3 m 0 0 Economics from Nottingham University Above MUR 3 m 2 2 in the United Kingdom. He worked in United Kingdom until 1972 when he returned to Mauritius and joined During the year ended 31 December 2014, executive directors received an aggregate Rogers, a leading Mauritian Commercial amount of MUR 20,099,745 (2013 - MUR 16,365,018) as remuneration and and Services Group. He became benefits from the Company. The non-executive directors received an aggregate amount Chief Executive of Rogers in 1999 and of MUR 523,742 (2013 - MUR 528,000) as remuneration and benefits from the retired in December 2006. He became Company during the same period. During 2012, the corporate governance committee Chairman (non-executive) of Rogers met to consider whether the Company would disclose directors’ remuneration on an in 2007, retiring in October 2012. He individual basis going forward. Eventually it was decided to continue disclosing salaries is currently Chairman (non-executive) by bands to protect personal privacy of individuals, which is also in line with current of Cim Financial Services Ltd and Scott market practice. & Co Ltd. Mr Taylor is the Honorary Consul of Norway in Mauritius and a past Chairman of the Mauritius Chamber The Vivo Energy Mauritius Limited management team is responsible for supervising the of Commerce and Industry. He is general course of business of the Company and advises the Board of directors. Chairman of the National Committee on Corporate Governance. He has The team from left to right always had an interest in environmental Afsar Soobadar, Distribution Manager; Patrick Crighton, Finance Manager; Nancy and conservation issues. He has been a Young, HR Manager; Pawan K Juwaheer, Managing Director; Shalini Bunwaree-Nagdan, member of the Council of the Mauritian Team Marketing Manager; Krishnen Vencadachellum, Retail Manager; Rajanah Dhaliah, Business Wildlife Foundation since 2006 and to Business Manager and Ashvin Ramdenee, Marine and Aviation Manager. President since 2009.
Directorship in other listed companies Profile of l Cim Financial Services (non-executive Chairman) Management
32 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 33 Corporate Governance Report (continued) Corporate Governance Report (continued)
Nancy Young he was appointed Operations Excellence Ashvin Ramdenee The board meets on a regular basis and elect the board members each year Cluster Human Resource Manager Coordinator, Network Planner for East Marine and Aviation Manager has a formal schedule of matters reserved at the annual meeting. Each director is and South East Africa in 2011, before for it. This includes matters such as elected by a separate resolution for a Nancy Young, Human Resources Manager, becoming Executive Assistant to the VP In March 2015, Ashvin Ramdenee has approval of the Annual Report, approval term of one year. The full list of matters joined Vivo Energy Mauritius Limited in Indian Ocean Islands. Mr Vencadachellum been appointed Marine and Aviation of interim dividends and recommendation reserved to the board for decision is 1990. Mrs. Young is a certified graduate was appointed Retail Manager in 2012. Manager and was until recently, the of final dividends, approval of material available from the Company Secretary. interviewer and assessor and a registered Engineering Manager for Vivo Energy contracts and nomination of candidates trainer in Human Resources Management. Mauritius limited. Mr Ramdenee joined for board membership. The shareholders She holds a Masters degree in Psychology Afsar Soobadar the Company in 2000 as Plant and with specialisation in Industrial Psychology Distribution Manager Speciality Engineer. Thereafter from 2003 from the University of Bordeaux, France. to 2009, he occupied the positions of Attendance of board meetings in 2014 Afsar Soobadar, Distribution Manager, Customer Service Manager, Terminal joined Vivo Energy Mauritius Limited Operations Manager and Senior Global In 2014, the attendance of the directors was as follows: Rajanah Dhaliah in 2004. He has since occupied Maintenance Execution Engineer. In 2010, Business-to-Business Manager the posts of Transport and Logistics Mr Ramdenee was appointed Distribution Mar 28 May 14 Aug 14 Nov 12 Manager then Terminal Operations Planning and Strategy Advisor for Africa 2014 2014 2014 2014 Rajanah Dhaliah, Business-to-Business Manager. Mr Soobadar holds a master’s and then moved on to the position of Manager, is holder of a degree in degree in manufacturing engineering Distribution MI and Lubes Supply Chain Chairman Mechanical Engineering and an MBA and management from the University Coordinator for Africa. Mr Ramdenee is Mr Christian Chammas X X
degree from the University of Mauritius. of Manchester, UK. Before joining holder of a Master of Engineering degree Board Meetings Mr Johan Depraetere X He joined the Company in 1990 and the Company, he gathered 10 years’ in Mechatronics from the University of (alternate to Mr C Chammas) (Chairperson) has worked in Lubricants, LPG, Retail experience at various levels in Operations Leeds, UK. Mr Bernard Le Goff X and HR occupying several jobs at local, Management. Mr Soobadar is a Director (Appointed on 03/11/2014) Regional, African and Global levels. In on ESCOL board (Energy Storage these roles, he had the opportunity to Company Limited), an associate Company Managing Director drive several projects such as Business of Vivo Energy Mauritius Limited. Mr Pawan Kumar Juwaheer X X X X Process Reengineering and Sales First. Mr Dhaliah is an expert in adult learning Directors and competence development as he has Shalini Bunwaree-Nagdan Mr Patrick Crighton X X X X been Competence and Learning Manager Marketing Manager Mr Timothy Taylor X X X X for Africa and MECAS (Middle East Mr Roger Leung X X X X Central Asia South) regions in the Global Shalini Bunwaree-Nagdan is holder of (Chairperson) Lubes Organisation. He is also a skilled a degree in Industrial Economics from marketer having occupied the post of the University of Nottingham, UK and With effect from November 2012, each time the Chairman is not in a position to chair B2C Marketing Manager for Commercial an MBA degree from the University Board meetings, the Chairmanship will be held by an independent director. businesses in Africa for several years. of Mauritius. Mrs Nagdan joined the Company in 2001 as Sector Sales Board committees Manager. Throughout the years, she has Krishnen Vencadachellum developed diverse sales and marketing The Board has three standing committees made up of Executive and Non-executive Retail Manager experience in the oil industry. In 2005, Directors to assist in the discharge of its duties. The committees, which are set out below, she was appointed Fuels and Bitumen meet regularly under the terms of reference set by the board. Holder of a degree in Mechanical HSSE Manager for the Indian Ocean Engineering from the NIT Allahabad, cluster after which, she became the B2B/ As from March 27, 2007 the Nomination and Remuneration committee forms part of the India and a Masters degree in Business B2C Marketing Manager for Mauritius Corporate Governance committee. Administration from the University of in 2007. Prior to her appointment as Mauritius, Krishnen Vencadachellum Marketing Manager in 2014, Mrs Nagdan joined the Company in 2004 as Retail has occupied the position of Fuels Sales Engineer and Property Manager. In 2009, Manager since 2009.
34 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 35 Corporate Governance Report (continued) Corporate Governance Report (continued)
Terms of Reference of Audit The ARC committee will maintain provision on non-audit services by the and Risk Committee (ARC) effective working relationships with the external auditors. board of directors, management, and the The internal audit manager reports Constitution external and internal auditors. The duties functionally to the chairman of the audit The ARC, established by the Board of and responsibilities of a member of the and risk committee (and administratively the Company, shall consist of at least two audit and risk committee are in addition to the General Manager). but not exceeding three Non-executive to those set out for a member of the Directors (NED). The Chairperson of the board of directors. committee shall be an independent NED Main responsibilities (as defined by the Code of Corporate The basic responsibility of the members Governance of Mauritius). Meetings of the audit and risk committee is to Only committee members will attend exercise their business judgement to act Each member shall be financially meetings. A quorum of any meeting shall in what they reasonably believe to be literate. At least one member must have be two (2) members. The audit and risk in the best interests of the Company accounting or related financial expertise. committee may invite such other persons and its shareholders. In discharging that (e.g. other directors, the General Manager, obligation members should be entitled Members shall be appointed for two head of finance, head of internal audit to rely on the honesty and integrity of (2) years term of notice so long as they and external audit senior partner) to its the Company senior executives and its remain a director of the Company. meetings, as it deems necessary. outside advisors and auditors, to the fullest extent permitted by law. Audit and risk committee members shall The external and internal auditors shall not serve simultaneously on the audit be invited to make presentations to the Key responsibility in respect committee of companies in the same field audit and risk committee as appropriate. of financial reporting as the present Company and of more At least once a year, the committee shall The background material must include professionals (accountants, lawyers and The committee shall:
l
of Reference Terms than two other public companies without meet with the head of internal audit and all such management accounts, financial so on) as it deems necessary to carry Review the interim financial statements, the approval of the full board. senior partner of the external auditors statements, internal and external audit out its duties, annual financial statements and without the presence of executive reports and internal control evaluations l Instruct any officer or employee of preliminary announcements prior to management to discuss any matters that that are available. the Company to attend any meetings their release, Objectives either the committee or these two parties and provide pertinent information as l Meet with management internal The audit and risk committee shall assist believe should be discussed privately. The chairman of the committee or necessary and appropriate, auditors and the external auditors the board in monitoring and overseeing another member of the committee shall l Have unrestricted access to members to review the financial statements, its financial responsibilities. Its main The committee shall meet as often as it attend the board meeting at which the of management, employees and the critical accounting policies and objectives shall be to: determines necessary or appropriate but financial statements are approved. relevant information, practices, and the results of their audit, not less frequently than quarterly. l Establish procedures for dealing with l Ensure that significant adjustments, l Oversee the integrity of the financial The committee should meet with in- concern of employees regarding unadjusted differences, disagreements reporting process and ensure the The committee chairman shall convene a house legal adviser on a regular basis (if accounting, internal controls and with management and management transparency and performance of meeting upon request of any committee one is appointed). Meetings with outside auditing matters, letter are discussed with the external published financial information. member who considers it necessary. legal adviser should be held if it is deemed l Make recommendations to the auditors; and l Review the effectiveness and necessary. board in relation to the appointment, l Review the other sections of the performance of the Company’s internal The secretary of the audit and risk termination and remuneration of annual report before its release and financial control and risk management committee shall be the Company external auditors and evaluate the consider whether the information system. secretary, or such other person as Board authority (et al) work of the latter, is understandable, consistent with l Evaluate the work of the internal audit nominated by the board. The board authorises the audit and l Review the performance of the members’ knowledge of the Company function and of the external auditors. The secretary of the committee shall risk committee, within the scope of its external auditors and exercise and unbiased. l Review the Company’s process circulate the minutes, agenda, and responsibilities to: final approval on the appointment or compliance with legal and regulatory background materials of meetings to the l Investigate any activity it deems discharge of the auditors; and Key responsibility in respect requirements affecting financial members of the committee and to the appropriate, l Pre-approve all audit services fees and of internal control reporting and, if applicable, its code of chairman of the board at least a week l Appoint independent advisers and terms as well as review policies for the The committee shall: business conduct. before the meeting.
36 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 37 Corporate Governance Report (continued) Corporate Governance Report (continued)
l Discuss the internal controls, adhered l Consider the independence and Terms of reference - Authority l determine the level of non-executive to by the Company’s management, objectivity of the external auditor. Corporate Governance The Committee is authorised by the Board directors and independent non- financial, accounting and internal audit l Discuss and review the external committee to: executive directors fees to be personnel, auditors’ proposed audit scope, l Investigate, or cause to be investigated, recommended to the shareholders at l Discuss with management the planning and approach in the light Membership any activity within its terms of reference; the Meeting of Shareholders Company’s major risk exposures and of the Company’s circumstances The membership, including the l Obtain external legal or independent l ascertain whether potential new the steps management has taken to and changes in regulatory and other chairmanship, of the Committee shall be professional advice and such advisors directors are fit and proper and are not monitor and control such exposures, requirements; and appointed by the Board. The Corporate may be invited to attend meetings as disqualified from being directors. Prior l Evaluate the overall effectiveness of the l Ensure that significant findings, Governance Committee shall consist of necessary. to their appointment, their backgrounds internal control and risk management accounting adjustments and not less than three members including should be investigated thoroughly; frameworks and consider whether recommendations noted by the the Managing Director of the Company. Duties l ensure that the potential new director is recommendations made by the internal external auditors and management’s It should be composed of a majority of The responsibilities of the Committee shall fully cognisant of what is expected from and external auditors have been proposed response are discussed and independent non-executive directors. A be to: a director, in general, and from him or implemented by management, appropriately acted on. quorum shall be two members. l Determine, agree and develop the her in particular l Ensure that significant findings and Company’s general policy on corporate l ensure that the right balance of recommendations noted by the Responsibility in respect of Evaluating performance and reporting governance in accordance with skills ,expertise and independence is internal auditors and management’s compliance with laws and responsibilities (Continued) the applicable Code of Corporate maintained; proposed response are discussed and regulations Governance. l ensure that there is a clearly defined appropriately acted on; and The committee shall: Attendance at meetings l Prepare the corporate governance and transparent procedure for l Evaluate the internal control matrix l Review the effectiveness of the system The Chairman of the Board, the Group report to be published in the shareholders to recommend potential of the Company on a quarterly basis for monitoring compliance with laws Chief Executive, the Group Human Company’s Annual Report. candidates; and obtain management comments on and regulations and the results of Resources Director and other members of l Ensure that disclosures are made in the l ensure that potential candidates are fluctuations in the score. management’s investigation and follow- management shall attend the meetings, if Annual Report in compliance with the free from material conflicts of interest up (including disciplinary action) of any invited by the Committee. disclosure in the Code of Corporate and are not likely to simply act in fraudulent acts or non-compliance, Executive Services Ltd shall be secretary of Governance the interest of a major shareholder, Key responsibility in respect l Oversee the Company’s compliance the Committee. l determine, agree and develop the substantial creditor or significant supplier of internal audit with legal and regulatory provisions, its company’s general policy on executive of the company. This is of particular The committee shall: articles of association, code of conduct, Meetings and senior management remuneration importance when a candidate has been l Ensure that the Company has an by-laws and any rules established by Meetings of the Committee will be held l determine specific remuneration nominated by virtue of a shareholder’s appropriate internal audit function, the board; and as the Committee deems appropriate. packages for executive directors of the agreement, or other such agreement. l Review the effectiveness of the internal l Conduct and authorise investigations However the Committee should meet company, including but not limited to l ensure that those directors who, in the audit function and ensure that it into any matters within the audit at least once a year. The Chairperson of basic salary, benefits in kind, any annual opinion of the board, have either acted has appropriate standing within the and risk committee’s scope of the Committee or any member of the bonuses, performance-based incentives, in accordance with the instructions of a Company; and responsibilities. Committee may call a meeting at any share incentives, pensions and other third party or have not discharged their l Evaluate the internal audit department other time. benefits. duties as directors to the satisfaction and its impact on the accounting Evaluating performance and The quorum for decisions of the l determining any criteria necessary to of the board, not be nominated for re- practices internal controls and financial reporting responsibilities Committee shall be any two members measure the performance of executive election. reporting of the Company. The committee shall: present throughout the meeting who shall directors in discharging their functions l Assess the achievement of the duties vote on the matter for decision. and responsibilities Key responsibility in respect specified in the charter annually and of external audit make regular report of their findings to The committee shall: the board, l Review on an annual basis the l Review and reassess the adequacy of performance of the external auditors its charter every two (2) years and based on the scope and results of their discuss any required changes with the work and make recommendations board; and to the board of the appointment, l Recommend approval of the annual reappointment or termination of the report and accounts to the board. appointment of the external auditors,
38 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 39 Corporate Governance Report (continued) Corporate Governance Report (continued)
Corporate Governance committee Mer Rouge Oil Storage Terminal Company Limited (Remuneration and Nomination committee) Vivo Energy Mauritius Limited holds 25% of the shares of Mer Rouge Oil Storage Terminal Mr Timothy Taylor (Chairman) Company Limited (MOST), a joint venture set up with the oil companies to build and Mr Pawan K Juwaheer operate an additional 25,000 metric tons motor gasoline depot in Mer Rouge. Mr Roger Leung September 04 Feb 10 Mar 19 2014 2014 2014 Chairman Chairman Mr Ranjan Kumar Mohapatra X Mr Timothy Taylor X X Directors Directors Mrs Joan Njeri Njoroge X Mr Pawan Kumar Juwaheer X X Mr Pawan Kumar Juwaheer X Mr Roger Leung X X Mr David Muraguri Mureithi - Mrs Anne-Solange Marie Bernadette Francoise Renouard X Mrs Zalhatta Ali Ben Ali X Audit and Risk Management committee Mr Rajeev Mohan X Mr Mohunlall Banydeen X Mr Roger Leung (Chairman) Mr Patrick Crighton (alternate to Mr David Muraguri Mureithi) X Mr Timothy Taylor
Mar 19 May 07 Aug 08 Nov 07 2014 2014 2014 2014 Vivo Energy HR Performance and reward policies should Chairman performance, rewards and help people excel, foster affiliation with Mr Roger Leung X X X X benefits philosophy Vivo Energy, and encourage behaviour Director that leads to the achievement of business Mr Timothy Taylor X X X X People in Vivo Energy are critical to the and personal objectives. achievement of our business objectives. Vivo Energy compensation policies, Benefits that are provided or enabled Directors in joint venture practices, and systems are intended to by Vivo Energy companies are another recognise and support: important component of the employee Energy Storage Company Limited value proposition and support our l Individual and business performance; attraction and retention strategies. Vivo Energy Mauritius Limited holds 50% of the shares of Energy Storage Company both short and long term; Benefits that are common foster Limited (ESCOL). The Board directors of ESCOL and their attendance to the ESCOL l Vivo Energy core values, business affiliation and community spirit and offer board meeting in 2014 are as follows: principles and people principles; a foundation for the total compensation l Business and people strategies; package. April 10 Nov 27 l Our strong commitment to sustainable 2014 2014 development; Our pay and benefits philosophy, Chairman l Market competitiveness and the objectives and standards apply to Vivo Mr Bashirally A Currimjee - - importance of internal relationships; Energy companies that employ people Directors and on Vivo Energy terms and conditions and Mr David Muraguri Murriithi - X l Different business and country should be broadly communicated and Mr Pawan Kumar Juwaheer X X economic, social, legal, and regulatory understood by all. Mr Mohammed Afsar Soobadar X X environments. Mrs Anne-Solange Marie Bernadette Francoise Renouard X X Mr Mathieu Soulas (alternate to Mr Bashirally A Currimjee) X X (Chairperson) (Chairperson) Mr Patrick Crighton (alternate to Mr David Muraguri Mureithi) X -
40 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 41 Corporate Governance Report (continued) Corporate Governance Report (continued)
Objectives l Support sharing of responsibility Declaration of conflict of interest of General Business Principles which between the state, the employer and Employees must avoid conflicts of interest provides the foundation for how Vivo We manage the social impacts of our Vivo Energy companies will operate the employee. between their private activities and their Energy companies do business around the business activities carefully and work with performance, reward and benefit systems part in the conduct of Company business. world. Many of these principles contain others to enhance the benefits to local that: Standards They must also declare in writing to the legal and ethical compliance requirements. communities, and to mitigate any negative Company potential conflicts of interest. The code is a single source of impacts from our activities. l Align employee and shareholder All reward and benefit programmes must All business transactions on behalf of a information about what those compliance interests; comply fully with appropriate laws and Vivo Energy Company must be reflected requirements mean, with guidance on In addition, Vivo Energy companies take a l Support the attraction and retention of regulations and our Business Principles: accurately and fairly in the accounts of the when to use them, how to use them and constructive interest in societal matters, the best talent at all levels who fit our l Our competitive reference: To compare Company in accordance with established how to be sure. directly or indirectly related to our business needs; to representative employers in the procedures and are subject to audit and business. l Assist mobility and avoid creating markets in which we compete for disclosure. We report annually on any Responsibility to employees barriers to movement within a talent. breaches of our ‘no bribes’ policy. We provide employees with good and Corporate Social business, country or Vivo Energy; l Our competitive objective: To have safe working conditions, and competitive Responsibility l Recognise both common interests and salary and benefits that result in a Our assurance letter process helps us terms and conditions of employment. individual preferences; and fair and competitive market position to monitor whether we are living by Vivo Energy Mauritius Limited is l Are transparent and well explained. among the competitive reference our Principles, in accordance with both Responsibility to customers committed to being a responsible group. The pay element within the total external laws and regulations and with We remain at the forefront of innovation, corporate citizen and caring for the In addition to these shared objectives, mix is more important than benefits our internal standards. Each year, the in consistently offering top quality communities in which it operates. To the different elements of the total in our competitive positioning - aimed Managing Director reports back to the products to our customers at very this end, the Company is fully engaged in compensation package focus on different, at delivering a competitive position on Chief Executive Officer of Vivo Energy, competitive prices. Community Investment projects which although complementary, goals. Total Cash and Total Compensation in writing, whether Vivo Energy Mauritius promote road safety awareness among (including benefits). Limited has acted in line with these Company’s policies and the country’s youth and the general Performance and rewards requirements and to report material practices with regards to public; provide educational training Policies and practice on exceptions. Action is taken to address social issues programmes for underprivileged learners; l Differentiate on the basis of ethics areas of non-compliance. and encourage environmental awareness performance and value to the business; Vivo Energy companies aim to be good and sustainable development. and Our approach to business integrity Code of Conduct neighbours by continuously improving the l Encourage growth and development as Our commitment to business integrity The Code of Conduct helps us to live ways in which we contribute directly or In 2014, the Company ran the second individuals and team players. is clear and unequivocal; Vivo Energy by our business principles. As Shell indirectly to the general well-being of the edition of Cite Zen, the social investment Mauritius Limited insists on honesty, Licensee, we fully abide by the Statement communities within which we work. project on road safety education targeting Benefits integrity and fairness in all aspects of our business and expects the same in our l Provide a standardised platform that relationships with all those with whom allows other elements of the reward we do business. We do not bribe, nor do strategy to differentiate on the basis of we accept bribes. We do not effect illegal performance; payments of any kind and investigate all l Are cost effective and tax advantaged, suspicious circumstances. Serious action where Vivo Energy purchasing power is taken against any employee found to provides leverage over individual have breached our firm ‘no bribes’ policy. purchasing power to provide for cost Corruption can occur in all parts of the reduction and risk sharing; world and at all levels. Our policy is l Support long-term social objectives that the direct or indirect offer, payment, for the communities within which we soliciting or acceptance of bribes in work; any form is unacceptable. Facilitation l Recognise the legislative environments payments are also bribes and should not and competitive markets within these be made. environments; and
42 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 43 Corporate Governance Report (continued) Corporate Governance Report (continued)
young students. A Road Safety Day, Political donations provided by the Statement of General with the Statement of General Business where we sensitised 100,000 primary Business Principles, the primary control Principles and other important topics; school children, was successfully run Vivo Energy Mauritius Limited has no mechanisms are self-appraisal processes as part of this process business integrity in collaboration with the Ministry of mandate to participate in party politics, in combination with strict accountability concerns or instances of bribery or illegal Education and Human Resources. although, as a major generator of for results. These mechanisms are payments are to be reported. Assurance economic wealth, the energy industry underpinned by established policies, letter results including any material Vivo Energy Mauritius Limited is active clearly has considerable social and standards and guidance material qualifications are reviewed by Vivo Energy in the development and delivery of a political impact. However, when dealing that relate to particular types of risk; Audit and Risk Committee and support range of educational initiatives across with government, Vivo Energy Mauritius structured investment decision processes, representations made to the external the country. Many are aimed at children Limited has the right and responsibility to timely and effective reporting systems and auditors. and young people, with the objective make its position known on any matter, performance appraisal. of fostering academic achievement, which affects the Company, its employees, In addition to these structured self- entrepreneurship and learning. Others its customers, or its shareholders. Vivo Examples of specific risk management appraisals, the assurance framework are focused on skills and knowledge Energy Mauritius Limited has also the mechanisms include: relies upon objective appraisals by for life. In partnership with the Non- right to make its position known on l regular review of significant risks by the internal audit. The results of internal Governmental Organisation, Junior matters affecting the community, where management team; audit’s risk-based reviews of operations Achievement Mascareignes (JAM), the Company has a contribution to make. l a common health, safety, security and provide an independent view regarding we support life-skills education for We do not make donations to political environment (HSSE) policy, a common the effectiveness of risk and control underprivileged children. Since the parties and treat this issue in the same requirement for HSSE management management systems. These established beginning of the partnership, we have way as bribery and corruption. We systems, and external certification of reviews; reporting and assurance sponsored 5,400 children. report annually on the implementation of the environmental component of such processes enable Vivo Energy to regularly this policy of no political payments. systems for major installations; consider the overall effectiveness of In 2015, we organised business skills l a financial control handbook that the system of internal control and to training for upper secondary students During the year, the Company made no establishes standards for the application perform a full annual review of the with the participation of our employees. political donations. of internal financial controls; system’s effectiveness. Taken together, Employees who volunteered to support l arrangements for the management of these processes and practices provide and act as mentors to the students, Risk management and property, liability and treasury risks; and confirmation to Vivo Energy holding alongside the educators, found it a most internal control l a business control incident reporting companies that relevant policies are enriching experience. The Company also process that enables monitoring and adopted and procedures implemented sponsored the technical education of two The approach to internal control is appropriate follow-up actions for with respect to risk and control students studying at College Technique based on the underlying principle of incidents arising as a result of control management. Saint Gabriel. line management’s accountability for risk breakdowns. Lessons learned from and control management. The risk and these incidents are used to improve Risk related to credit We are committed to protecting the internal control policy explicitly states that the overall control framework. Credit risk is one of the Company’s key environment. Clearly, we have a direct the Company has a risk-based approach risks. Vivo Energy has devised a set of responsibility for the impact that Vivo to internal control and that management A formalised self-appraisal and assurance rules that apply across the continent on Energy Mauritius Limited makes as a is responsible for implementing, operating letter process is in place. Annually, the that subject. Items on which this policy business and we work hard to reduce our and monitoring the system of internal management of every business unit place a lot of emphasis include carrying impact on the environment. We invested control, which is designed to provide provides assurance as to the adequacy out customer risk assessment before any in maintaining and enhancing the area reasonable but not absolute assurance of of governance arrangements, risk and delivery is made to a customer and also close to our office in Roche Bois. achieving business objectives. internal control management, HSSE at regular intervals, setting of a credit limit management, financial controls and by customer and using the Enterprise In 2014, the Company contributed Rs 4.0 The approach to internal control reporting, treasury management, Resource Planning system to avoid trading million to Corporate Social Responsibility includes a number of general and brand management and information outside of approved conditions. projects. specific risk management processes and management. The Managing Director also policies. Within the essential framework provides assurance regarding compliance
44 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 45 Corporate Governance Report (continued) Corporate Governance Report (continued)
monthly and regulated by the Automatic Pricing Mechanism, international sales are not price controlled, very seasonal and unpredictable. In this respect, efficient management of the product replenishment cycle, product availability and freight are therefore of essence to ensure continuity of service. The risk to the business is product shortage or stock out causing curtailment of sales, loss of revenue and business.
Risk related to Health, Safety, Security and Environment (HSSE) Vivo Energy Mauritius Limited operates under a common set of business principles, supported by policies and business controls. These include a Health, Safety, Security, Environment (HSSE) and Social Performance (SP) Commitment and Policy, which require that our Company shall have a systematic approach to HSSE & SP management. We have put in place the Vivo Energy Risk related to information security perceptions of key stakeholders through Risk related to fluctuating oil prices mandatory procedure for an HSSE Vivo Energy Mauritius Limited has in place a variety of methods. Included are Oil and oil products prices can vary Management System (HSSE MS), which an Information Security programme that statements of our commitments, policies as a result of various factors, including is a structured set of controls for ensures it adheres to the Information and standards and human resource natural disasters, political instability or managing the business and to ensure and security based on ISO 27001. Disaster roles of Communications and Managing conflicts, economic conditions or action demonstrate that business objectives recovery plans are in place and tested to Director. The role of the Managing taken by major oil-exporting countries. are met. This management system takes ensure that there is minimum business Director, in particular, is specifically Fluctuations in these prices could test our into account HSSE MS implementation disruption in the event of a disaster. All designed to protect the reputation business assumptions, and could have an requirements, incorporated in the new staff and contractors are continually of Vivo Energy companies operating adverse impact on Vivo Energy Mauritius business level HSSE MS as well as the coached to complete the mandatory in a country with the support from Limited investment decisions, operational various classes of business HSSE MSs e-learning information security training Communications both locally and at Vivo performance and financial position. relevant to our operations. Classes of module, the objective of the training Energy level. Statements of commitments, business are distribution, marine, aviation, being to enhance awareness, education policies and standards adopted by Vivo Risk related to operational hazards, business-to-business, LPG, lubricants and and behaviour against information Energy Mauritius Limited include the natural disasters and pandemics retail. The elements of this management security threats. Statement of General Business Principles, The activities of Vivo Energy Mauritius Risk related to foreign exchange Regularity of supplies is of vital system are organised according to Vivo Code of Conduct, Commitment to Limited place it at the risk of operational More than one third of the Company’s importance to enable Vivo Energy Energy guidance of how to integrate Risk related to reputation Sustainable Development, HSSE & SP hazards, natural disasters and pandemics, business is carried out in foreign Mauritius Limited to meet the needs HSSE into the business and manage HSSE Vivo Energy Mauritius Limited and Commitment and Policy, Diversity and which could result in loss of life, adverse currency. The Company’s risk mitigation of its customers; consequently Vivo matters as any other critical activity. In the Vivo Energy companies value the Inclusiveness Standard, Environmental impact on the environment and policy with respect to foreign currency Energy has secured the position of Oil line with our HSSE & SP policy to achieve perception of stakeholders as no Minimum Standards, Environmental, Social cause disruption to business activities. is to minimise exposure by matching Industry coordinator with The State continuous performance improvement, Company or business operates in a and Health Impact Assessment, Minimum Realisation of these risks could have currencies whenever feasible and entering Trading Corporation for the monitoring the individual classes of business action vacuum. Our licence to operate and our Health Standards, Security Standards, HIV/ an adverse effect on the results of forward contracts whenever possible and of all product imports. Whereas plans have been well observed and very existence rely on the understanding, AIDS Policy, Human Rights Standard, Road operations and financial position of the economically viable. product demand for inland trade is fairly completed. goodwill and emotion of stakeholders. Transport Safety Policy, Code of Ethics Company. Risk related to supplies predictable, with transfer prices fixed As such, Vivo Energy Mauritius Limited and adoption of the Mauritian Code of addresses the interests, concerns and Corporate Governance.
46 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 47 Corporate Governance Report (continued) Corporate Governance Report (continued)
Risk related to change in legislation and and control the operations, behaviours controls are reviewed at regular intervals fiscal and regulatory policies and performance of business activities of in all operating units. The operations of Vivo Energy Mauritius other parties with whom the Company is Management agreements Shareholder Limited are subject to risk of change engaged. This could result in damage to in legislation, taxation and regulation, staff, assets and financial results. changes that could have an adverse effect The Company does not have any on the results of operations and financial Risk related to economic and financial shareholders’ agreement that affects market conditions Information position of the Company. the governance of the Company by Vivo Energy Mauritius Limited is subject the Board. As mentioned in page 3 of Risk related to effective governance to differing economic and financial market the directors report, the Company has Shareholder communications The resolutions of the Annual Meeting annual meetings, shareholders may cast one Successful delivery of the Vivo Energy conditions. There are risks from political a licence agreement with Shell Brands of Shareholders shall, except in those vote for each ordinary share held by them. Mauritius Limited strategy requires and economic instability. Realisation of International AG and a contract for the The Board recognises the importance cases where the law or the Constitution effective governance. There is a risk of one of these risks could have an adverse provision of services with Vivo Energy of two-way communications with its prescribe a larger majority, be passed by incorrect design and operation of internal impact on the results of operations and Africa Services. Apart from these two shareholders and, in addition to giving a absolute majority of the votes cast. At control, which may result in damage to financial position of Vivo Energy Mauritius contracts, the Company does not have balanced report of results and progress the Company’s reputation, financial results Limited. any management agreement with third at each annual meeting, Vivo Energy Vivo Energy Mauritius Limited share price 3 January to 31 December 2014 compared to SEMTRI (MUR) and employees. parties where the third party is a director Mauritius Limited responds to questions Internal controls or a Company owned by a director. and issues raised by institutions and private 160,000 7500 Risk related to partners and ventures shareholders. Information about Vivo 155,000 There is a risk that Vivo Energy Mauritius The Group has an internal audit plan in Energy Mauritius Limited is available on the 7000 www.vivoenergy.com 150,000 Limited could lose the ability to influence place. The plan is set up such that internal website . In addition, 6500
shareholders’ questions can be asked via 145,000 the telephone line (+230 206 1234), the 6000 fax line (+230 240 1043), the website, the 140,000 5500 Facebook and Twitter pages of Vivo Energy. 135,000 5000 Annual Meeting of 130,000 Shareholders 125,000 4500
120,000 4000 r r r The Annual Meeting of Shareholders of v v v 02 juil 14 juil 24 juil 06 ja n 16 ja n 29 ja n 12 fé v 24 fé v 02 av 14 av 24 av 02 oct 14 oct 27 oct 10 juin 20 juin 07 mai 29 mai 19 mai 11 déc 23 déc 06 no 18 no 28 no 07 mar 20 mar 10 sept 22 sept Vivo Energy Mauritius Limited is held once 06 août 19 août 29 août a year to discuss the report of the Board of VEML SEMTRI directors, to approve the audited financial statements, to elect any new directors, to appoint the auditors and to authorise the Vivo Energy Mauritius Limited share price 3 January to 31 December 2014 compared to SEMDEX directors to fix their remuneration, to ratify
the dividends declared by the Board of 195 directors. 2180 175
The Annual Meeting of Shareholders shall 2135 155 be called by the Board of directors. The items to be dealt with at the meeting are 135 2090 determined by the Board of directors and are specified in the agenda included in the 115 notice of convocation. A Special Meeting 2045 95 of Shareholders may be called by the Board
on written request of shareholders holding 75 2000 r r r shares carrying together not less than 5% v v v 02 juil 14 juil 24 juil 06 ja n 16 ja n 29 ja n 12 fé v 24 fé v 02 av 14 av 24 av 02 oct 14 oct 27 oct 10 juin 20 juin 07 mai 29 mai 19 mai 11 déc 23 déc 06 no 18 no 28 no 07 mar 20 mar 10 sept 22 sept of the voting rights entitled to vote on an 06 août 19 août 29 août VEML SEMDEX issue.
48 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 49 Corporate Governance Report (continued) Corporate Governance Report (continued)
Data Analysis on Shareholding Shareholders’ diary
Number of Shares Number of Shareholders Number of Shares Owned % of Total Issued Shares Financial Year End December 31, 2014 1 - 500 2,292 451,492 1.54 Annual Meeting of Shareholders May 15, 2015 501 - 1,000 545 486,426 1.66 Reports and profits statement 1,001 - 5,000 463 1,164,854 3.97 Income Statement for the year ended 31 December 2014 Published March 31, 2015 5,001 - 10,000 103 754,215 2.57 Condensed Interim Income Statement for the quarter ended 31 March 2015 Published May 15, 2015 10,001 - 50,000 88 1,819,338 6.20 Condensed Interim Income Statement for the six months ended 30 June 2015 Published August 15, 2015 50,001 - 100,000 5 340,258 1.16 Condensed Interim Income Statement for the nine months ended 100,001 - 250,000 4 661,267 2.26 30 September 2015 Published November 15, 2015 250,001 - 500,000 1 273,937 0.93 Income Statement for the year ended 31 December 2015 Published March 31, 2016 (at latest) 500,001 - 1,000,000 1 747,149 2.55 Over 1,000,000 1 22,623,316 77.15 Dividend Total 3,503 29,322,252 100.00 Interim Dividend To be announced May 15, 2015 (at latest) Interim Dividend Payable June 30, 2015 (at latest) Final Dividend To be announced March 31, 2016 (at latest) List of 10 Major Security Holders as at 31 December 31, 2014 Final Dividend Payable July 31, 2016 (at latest)
SECURITY HOLDER’S FULL NAME NO. OF SECURITIES % HOLDING 1 VIVO ENERGY MAURITIUS HOLDINGS B.V. 22,623,316 77.1541 2 NATIONAL PENSIONS FUND 747,149 2.5481 3 MR LIMBERG LAM PO TANG 273,937 0.9342 Constitution Dividend Policy 4 MR LIM KWAT CHOW LAM PO TANG 224,552 0.7658 5 STATE INSURANCE COMPANY OF MAURITIUS LTD 164,615 0.5615 The Company’s constitution is in The Company will pay dividends on a 6 SECTIONS ROLLING LIMITED 137,100 0.4676 conformity with the provisions of the quarterly basis. The timing of Board 7 MR N J P MAURICE RAFFRAY 135,000 0.4604 Companies Act 2001 and those of the meetings should be planned so as to 8 NATIONAL SAVINGS FUND 84,700 0.2889 Listing Rules of the Stock Exchange of meet this objective. Dividend payments 9 MR GARY LAM PO TANG 82,415 0.2811 Mauritius. should take into account the dividend 10 THE ANGLO-MAURITIUS ASSURANCE SOCIETY LTD 64,290 0.2193 calendar of trading rules of the Stock Its salient features are: Exchange. Ideally, dividends should be declared at the Board meetings which are Apart from Vivo Energy Mauritius Holdings B.V, no other shareholder owns more than 5% of the share capital of the Company. l There are restrictions on pre-emptive held in May and November each year. rights attached to the shares. l The Company may acquire and own The Dividend Policy of Vivo Energy Shares held by each director at December 31, 2014 its shares. Mauritius Limited is to declare up to a l The Company may not issue fractions maximum of 50% of Net Income after The directors follow the principles of the model code on securities transactions by directors as detailed in Appendix 6 of the Mauritius shares. Tax (NIAT) subject to sufficient funds Stock Exchange rules. l Shareholders may cast their votes by and solvency certificate. The solvency post. certificate should be signed and approved The directors have not held or traded in any shares of the Company during the year. l The Board consists of not less than by the Board of directors in accordance two (2) or more than eleven directors with the Companies Act. (11). l There is rotation of directors every year except for the one who is elected Insider dealing as chairperson who retires every four years. Vivo Energy believes it important in order to protect the reputation for honesty and
50 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 51 Corporate Governance Report (continued)
integrity enjoyed by both Vivo Energy Going concern and its employees that, where part of the The directors have a reasonable share capital of a Vivo Energy Company expectation that the Company has Statement is traded on a Stock Exchange, there adequate resources to continue in an should be no possibility of suspicion operational existence for the foreseeable that an employee or contractor of the future, as set out in the Chairman and Company or a person connected with Managing Director’s reports, and for this of Compliance that employee or contractor while dealing reason has adopted the going concern in the Company’s quoted shares has used basis in preparing the annual financial (Section 75(3) of the Financial Reporting Act) confidential knowledge for either his statements. own benefit or that of another person. Between the dates a period is closed and Registered office Name: Vivo Energy Mauritius Limited (“the Company”) the results are published, a notice is sent to all staff asking them not to deal with Vivo Energy Mauritius Limited Reporting Period: Year ended 31 December 2014 shares during such periods. Cemetery Road Roche Bois On behalf of the Board of Directors of the Company, we confirm that to the best of our knowledge, the Company has not complied Related party transactions PO Box 85, Port Louis with section 2.8. Website: www.vivoenergy.com Related party transactions are disclosed in Reason for non-compliance is as follows: note 28 of the financial statements. By order of the Board Disclosing salaries by bands protects the personal privacy of individuals and this is also in line with current market practice.
Non-audit services Executive Services Limited Per Christian Angseesing SIGNED BY: During the year, the external auditors Secretary ) have rendered no non-audit services. ) ) DIRECTORS )
52 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 53 Income Statement for the year ended 31 December 2014
Restated Independent 2014 2013 Note Rs’000 Rs’000
Sales 12,784,100 13,148,448 Auditor’s Report Cost of sales ( 12,079,052) ( 12,416,626) To the Shareholders of Vivo Energy Mauritius Limited Gross profit 705,048 731,822 Other income 6 60,940 52,963 Report on the Financial statements. The procedures selected our capacity as auditor; Other losses on exchange - net ( 10,794) ( 4,211) Statements depend on the auditor’s judgement, (b) we have obtained all the information Distribution costs ( 93,467) ( 92,949) including the assessment of the risks of and explanations we have required; and ( 480,045) We have audited the financial statements material misstatement of the financial (c) in our opinion, proper accounting Administrative expenses ( 432,911) of Vivo Energy Mauritius Limited (the statements, whether due to fraud or error. records have been kept by the Company Operating profit 7 181,682 254,714 “Company”) on pages 55 to 92 which In making those risk assessments, the as far as appears from our examination of comprise the statement of financial auditor considers internal control relevant those records. Finance income 8 677 436 position as at 31 December 2014 and to the entity’s preparation and fair Finance costs 8 ( 9,540) ( 10,474) the income statement, statements of presentation of the financial statements in Financial Reporting Act 2004 comprehensive income, changes in equity order to design audit procedures that are The directors are responsible for Finance costs - net 8 ( 8,863) ( 10,038) and cash flows for the year then ended, appropriate in the circumstances, but not preparing the corporate governance Share of profit of joint venture 10,679 9,594 and a summary of significant accounting for the purpose of expressing an opinion report. Our responsibility is to report on Profit before income tax 183,498 254,270 policies and other explanatory notes. on the effectiveness of the entity’s internal the extent of compliance with the Code Income tax expense 9 ( 29,167) ( 31,595) control. An audit also includes evaluating of Corporate Governance (the “Code”) Profit for the year 154,331 222,675 Directors’ Responsibility for the the appropriateness of accounting as disclosed in the annual report on pages
Financial Statements policies used and the reasonableness 28 to 52 and on whether the disclosure 5.26 The Company’s directors are responsible of accounting estimates made by the is consistent with the requirements of the Basic and diluted earnings per share Rs 7.59 29,322 for the preparation and fair presentation directors, as well as evaluating the overall Code. Number of shares used in the calculation (000’s) 29,322 of these financial statements in presentation of the financial statements. accordance with International Financial We believe that the audit evidence we In our opinion, the disclosure in the annual Reporting Standards and in compliance have obtained is sufficient and appropriate report on pages 28 to 52 is consistent Statement of Comprehensive Income for the year ended 31 December 2014 with the requirements of the Mauritian to provide a basis for our audit opinion. with the requirements of the Code. Companies Act 2001, and for such internal 2014 2013 control as the directors determine is Opinion Other Matter Note Rs’000 Rs’000 necessary to enable the preparation of In our opinion, the financial statements financial statements that are free from on pages 55 to 92 give a true and fair This report, including the opinion, has Profit for the year 154,331 222,675 material misstatement, whether due to view of the financial position of the been prepared for and only for the fraud or error. Company at 31 December 2014 and of Company’s shareholders, as a body, in Other comprehensive income its financial performance and its cash flows accordance with Section 205 of the Items that will not be reclassified to profit or loss: Auditor’s Responsibility for the year then ended in accordance Mauritian Companies Act 2001 and for no Our responsibility is to express an opinion with International Financial Reporting other purpose. We do not, in giving this on these financial statements based on Standards and comply with the Mauritian opinion, accept or assume responsibility Remeasurements of post employment benefit our audit. We conducted our audit in Companies Act 2001. for any other purpose or to any other obligations 21 27,541 ( 69,896) accordance with International Standards person to whom this report is shown Deferred tax (liability)/asset on remeasurements of on Auditing. Those Standards require Report on Other Legal and or into whose hands it may come save post employment benefit obligations 20 ( 4,682) 11,883 that we comply with ethical requirements Regulatory Requirements where expressly agreed by our prior and plan and perform the audit to obtain consent in writing. Other comprehensive income for the year 22,859 ( 58,013) reasonable assurance about whether the Companies Act 2001 financial statements are free from material The Mauritian Companies Act 2001 Profit and total comprehensive income for the year 177,190 164,662 misstatement. requires that in carrying out our audit we consider and report to you on the An audit involves performing procedures following matters. We confirm that: PricewaterhouseCoopers to obtain audit evidence about the (a) we have no relationship with or Robert Coutet, licensed by FRC amounts and disclosures in the financial interests in the Company other than in Date: 26 March 2015
54 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 55 Statement of Financial Position - 31 December 2014 Statement of Changes in Equity for the year ended 31 December 2014
Share Retained Total 2014 2013 capital earnings equity Note Rs’000 Rs’000 Rs’000 Rs’000 Rs’000
ASSETS At 01 January 2013 293,223 49,396 342,619 Non-current assets Comprehensive income Property, plant and equipment 12 908,682 821,957 Profit for the year - 222,675 222,675 Intangible assets 13 - - Other comprehensive income - ( 58,013) ( 58,013) Prepaid operating leases 14 604 672 Other long term assets 15 11,425 10,230 Total comprehensive income - 164,662 164,662 Interest in joint venture 16 35,807 18,128 956,518 850,987 Transactions with owners Dividends declared - ( 29,322) ( 29,322) Current assets Inventories 17 666,951 995,452 Total transactions with owners - ( 29,322) ( 29,322) Trade and other receivables 18 1,018,886 1,173,452 Cash and cash equivalents 24 55,990 183,387 At 31 December 2013 293,223 184,736 477,959 Income tax asset 9 3,587 - 1,745,414 2,352,291 Total assets 2,701,932 3,203,278 At 01 January 2014 293,223 184,736 477,959 EQUITY & LIABILITIES Equity Comprehensive income Share capital 19 293,223 293,223 Profit for the year - 154,331 154,331 Retained earnings 215,315 184,736 Other comprehensive income - 22,859 22,859 Total equity 508,538 477,959 Total comprehensive income - 177,190 177,190 LIABILITIES Non-current liabilities Transactions with owners Deferred income tax liabilities 20 60,616 49,466 Dividends declared - ( 146,611) ( 146,611) Retirement benefit obligations 21 81,723 108,363 142,339 157,829 Total transactions with owners - ( 146,611) ( 146,611)
Current liabilities At 31 December 2014 293,223 215,315 508,538 Bank overdrafts 24 416,569 6,369 Trade and other payables 22 1,339,987 2,267,745 Deposits on LPG cylinders 23 294,499 287,751 Current income tax liabilities 9 - 5,625 2,051,055 2,567,490 Total liabilities 2,193,394 2,725,319 Total equity and liabilities 2,701,932 3,203,278
Approved by the Board of directors on 26 March 2015 and signed on its behalf by: ) ) ) DIRECTORS )
56 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 57 Notes to the Financial Statements - 31 December 2014
Statement of Cash Flows for the year ended 31 December 2014 1 GENERAL in conformity with IFRS requires the use IFRS 9, ‘Financial instruments’, addresses INFORMATION of certain critical accounting estimates. It the classification, measurement and 2013 2013 also requires management to exercise its recognition of financial assets and financial Rs’000 Rs’000 Vivo Energy Mauritius Limited (the judgement in the process of applying the liabilities. The complete version of IFRS “Company”), is a limited liability company Company’s accounting policies. The areas 9 was issued in July 2014. It replaces Cash flows from operating activities listed on the Stock Exchange of Mauritius involving a higher degree of judgement or the guidance in IAS 39 that relates to Profit before income tax 183,498 254,270 and is incorporated and domiciled in complexity, or areas where assumptions the classification and measurement Adjustments for: Mauritius. and estimates are significant to the of financial instruments. IFRS 9 retains Depreciation on property, plant and equipment (Note 12) 90,568 82,600 financial statements are discussed in but simplifies the mixed measurement Provision for impairment of receivables (Note 18) 3,715 ( 1,424) Amortisation of intangible assets (Note 13) - - The Company’s principal activity is the Note 3. model and establishes three primary Amortisation of prepaid operating leases (Note 14) 68 68 marketing and distribution of petroleum measurement categories for financial Interest expense (Note 8) 9,540 10,474 products. Its joint venture, Energy Storage Changes in accounting policies assets: amortised cost, fair value through (Profit)/loss on disposal of property, plant and equipment ( 131) 261 Company Limited, is involved in the and disclosures OCI and fair value through P&L. The basis Interest income (Note 8) ( 677) ( 436) provision of LPG terminal usage facilities. of classification depends on the entity’s Unrealised loss on exchange 17,108 9,143 The Company has invested in a new joint (a) New standards, amendments and business model and the contractual cash Share of profit of joint venture (Note 16) ( 10,679) ( 9,594) interpretations adopted by the Company Increase/(decrease) in retirement benefit obligations 901 ( 5,291) venture, Mer Rouge Oil Storage Terminal flow characteristics of the financial asset. Co.Ltd, which is involved in the storage of Investments in equity instruments are Cash generated before working capital changes 293,911 340,071 petroleum products. The following standards have been required to be measured at fair value Decrease/(increase) in inventories 328,501 ( 207,920) adopted by the Company for the first time through profit or loss with the irrevocable Decrease/(increase) in receivables and prepayments 158,099 ( 123,204) These financial statements were for the financial year beginning on or after option at inception to present changes (Decrease)/increase in trade and other payables ( 899,834) 699,387 authorised for issue by the board of 1 January 2014 but are not expected to in fair value in OCI not recycling. There Increase in deposits on LPG cylinders 6,748 14,919 directors on 26 March 2015. have a material impact on the Company: is now a new expected credit losses Cash (used in)/generated from operations ( 112,575) 723,253 model that replaces the incurred loss Interest paid ( 9,540) ( 10,474) Amendment to IAS 32, ‘Financial impairment model used in IAS 39. For Income tax paid (Note 9) ( 31,911) ( 20,800) 2 SUMMARY OF instruments:Presentation’ on offsetting financial liabilities there were no changes SIGNIFICANT financial assets and financial liabilities. to classification and measurement Net cash (used in)/generated from operating activities ( 154,026) 691,979 ACCOUNTING POLICIES This amendment clarifies that the right of except for the recognition of changes in Cash flows from investing activities set-off must not be contingent on a future own credit risk in other comprehensive Proceeds from disposal of property, plant and equipment 206 36 The principal accounting policies applied event. It must also be legally enforceable income, for liabilities designated at Interest received 677 436 in the preparation of these financial for all counterparties in the normal fair value through profit or loss. IFRS Loan to dealers ( 10,800) ( 12,200) statements, are set out below. These course of business, as well as in the event 9 relaxes the requirements for hedge Dividends received from joint venture (Note 16) 10,000 10,000 policies have been consistently applied to of default, insolvency or bankruptcy. The effectiveness by replacing the bright line Payments for purchase of property, plant and equipment (Note 12) ( 177,368) ( 125,402) all the years presented, unless otherwise amendment also considers settlement hedge effectiveness tests. It requires Investment in joint venture (Note 16) ( 17,000) - stated. mechanisms. The amendment did not an economic relationship between the Net cash used in investing activities ( 194,285) ( 127,130) have a significant effect on the Company hedged item and hedging instrument and Basis of preparation financial statements. for the ‘hedged ratio’ to be the same as Cash flows from financing activities the one management actually uses for risk Dividends paid to company’s shareholders ( 175,933) - The financial statements of Vivo Energy (b) New standards, amendments and management purposes. Contemporaneous Mauritius Limited have been prepared in interpretations not yet adopted documentation is still required but is Net cash used in financing activities ( 175,933) - accordance with International Financial different to that currently prepared Net (decrease)/increase in cash, cash equivalents and bank overdrafts ( 524,244) 564,849 Reporting Standards (“IFRS”) and IFRS A number of new standards and under IAS 39. The standard is effective for Cash, cash equivalents and bank overdrafts at beginning of year 177,018 ( 376,537) Interpretation Committee (IFRS IC) amendments to standards and accounting periods beginning on or after 1 Effect of exchange rate changes on cash and bank overdrafts ( 13,353) ( 11,294) applicable to companies reporting under interpretations are effective for annual January 2018. Early adoption is permitted. IFRS. The financial statements have periods beginning after 1 January 2014, The Company is yet to assess IFRS 9’s full Cash, cash equivalents and bank overdrafts at end of year ( 360,579) 177,018 been prepared under the historical cost and have not been applied in preparing impact. convention. The financial statements are these financial statements. None of these presented in Mauritian Rupees (‘Rs’), is expected to have a significant effect on IFRS 15, ‘Revenue from contracts with rounded to the nearest thousand. the financial statements of the Company, customers’ deals with revenue recognition The preparation of financial statements except the following set out below: and establishes principles for reporting
58 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 59 Notes to the Financial Statements - 31 December 2014 (continued) Notes to the Financial Statements - 31 December 2014 (continued)
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Changes in accounting policies and disclosures (continued) Intangible assets (continued) useful information to users of financial where items are re-measured. Foreign estimated useful lives. The annual rates l There is an ability to use or sell the assets are grouped at the lowest levels enforceable right to offset the recognised statements about the nature, amount, exchange gains and losses resulting from used are: software product; for which there are largely independent amounts and there is an intention to settle timing and uncertainty of revenue the settlement of such transactions l It can be demonstrated how the cash inflows (cash-generating units). Prior on a net basis or realise the asset and and cash flows arising from an entity’s and from the translation at year-end Freehold Buildings 5.0% software product will generate probable impairments of non-financial assets (other settle the liability simultaneously. contracts with customers. Revenue is exchange rates of monetary assets Plant and equipment 5.0% - 10.0% future economic benefits; than goodwill) are reviewed for possible recognised when a customer obtains and liabilities denominated in foreign Motor vehicles 15.0% - 25.0% l Adequate technical, financial and other reversal at each reporting date. Impairment of financial assets control of a good or service and thus has currencies are recognised in the income Computer equipment 33.3% resources to complete the development the ability to direct the use and obtain the statement, except when deferred in other Furniture and fittings 15.0% and to use or sell the software product Financial assets Assets carried at amortised cost benefits from the good or service. The comprehensive income as qualifying cash are available; and The Company assesses at the end of standard replaces IAS 18 ‘Revenue’ and flow hedges and qualifying net investment The assets’ residual values and useful lives l The expenditure attributable to Classification each reporting period whether there is IAS 11 ‘Construction contracts’ and related hedges. are reviewed, and adjusted if appropriate, the software product during its The Company classifies its financial assets objective evidence that a financial asset interpretations. The standard is effective at the end of each reporting period. development can be reliably measured. in the category ‘Loans and receivables’. The or group of financial assets is impaired. A for annual periods beginning on or after Foreign exchange gains and losses are classification depends on the purpose for financial asset or a group of financial assets 1 January 2017 and earlier application is presented in the income statement within An asset’s carrying amount is written Directly attributable costs that are which the financial assets were acquired. is impaired and impairment losses are permitted. The Company is assessing the ‘Other gains / losses on exchange – net’. down immediately to its recoverable capitalised as part of the software product Management determines the classification incurred only if there is objective evidence impact of IFRS 15. amount if the asset’s carrying amount is include the software development of its financial assets at initial recognition. of impairment as a result of one or more Property, plant and equipment greater than its estimated recoverable employee costs and an appropriate events that occurred after the initial Segment reporting and depreciation amount. portion of relevant overheads. Loans and receivables recognition of the asset (a ‘loss event’) and Loans and receivables are non-derivative that loss event (or events) has an impact Operating segments are reported in Property, plant and equipment is stated at Gains and losses on disposals are Other development expenditures that do financial assets with fixed or determinable on the estimated future cash flows of the a manner consistent with the internal historical cost less depreciation. Historical determined by comparing the proceeds not meet these criteria are recognised as payments that are not quoted in an active financial asset or group of financial assets reporting provided to the chief operating cost includes expenditure that is directly with the carrying amount and are an expense as incurred. Development market. They are included in current assets, that can be reliably estimated. decision-maker. The chief operating attributable to the acquisition of the items. recognised within ‘Other income’ in the costs previously recognised as an expense except for maturities greater than 12 decision-maker, who is responsible Cost may also include transfers from income statement. are not recognised as an asset in a months after the reporting date. These Evidence of impairment may include for allocating resources and assessing equity of any gains/losses on qualifying cash subsequent period. are classified as non-current assets. The indications that the debtors or a group performance of the operating segments, flow hedges of foreign currency purchases Intangible assets Company’s loans and receivables comprise of debtors is experiencing significant has been identified as the Chief Executive of property, plant and equipment. Computer software development costs ‘other long term assets’, ‘trade and other financial difficulty, default or delinquency Officer. Acquired computer software licences recognised as assets are amortised over receivables’, and ‘cash and cash equivalents’ in interest or principal payments, the Subsequent costs are included in the are capitalised on the basis of the costs their estimated useful lives, not exceeding in the statement of financial position. probability that they will enter bankruptcy Foreign currency translation asset’s carrying amount or recognised as a incurred to acquire and bring to use three years. Recognition and measurement or other financial reorganisation, and separate asset, as appropriate, only when it the specific software. These costs are Regular purchases and sales of financial where observable data indicate that there l Functional and presentation currency is probable that future economic benefits amortised over their estimated useful lives Impairment of non-financial assets are recognised on the trade date, is a measurable decrease in the estimated associated with the item will flow to the (not exceeding three years). assets which is the date on which the Company future cash flows, such as changes in Items included in the financial statements Company and the cost of the item can be Intangible assets that have an indefinite commits to purchase or sell the asset. arrears or economic conditions that are measured using the currency of measured reliably. The carrying amount Costs associated with maintaining useful life or intangible assets not ready Financial assets are derecognised when correlate with defaults. the primary economic environment in of the replaced part is derecognised. computer software programmes are to use are not subject to amortisation the rights to receive cash flows from which the entity operates (the “functional All other repairs and maintenance are recognised as an expense as incurred. and are tested annually for impairment. the investments have expired or have For loans and receivables category, the currency”). The financial statements are charged to the income statement during Development costs that are directly Assets that are subject to amortisation been transferred and the Company amount of the loss is measured as the presented in thousands of Mauritian Rupee the financial period in which they are attributable to the design and testing of are reviewed for impairment whenever has transferred substantially all risks difference between the asset’s carrying (Rs’000), which is the Company’s functional incurred. identifiable and unique software products events or changes in circumstances and rewards of ownership. Loans and amount and the present value of and presentation currency. No depreciation is provided on freehold controlled by the Company, are recognised indicate that the carrying amount may receivables are subsequently carried at estimated future cash flows (excluding land and on assets in the course of as intangible assets, when the following not be recoverable. An impairment loss amortised cost using the effective interest future credit losses that have not been l Transactions and balances construction. Buildings on leasehold land criteria have been met: is recognised for the amount by which method. incurred) discounted at the financial are depreciated over the period of the l It is technically feasible to complete the asset’s carrying amount exceeds its asset’s original effective interest rate. The Foreign currency transactions are lease if less than 20 years. Depreciation the software product so that it will be recoverable amount. The recoverable Offsetting financial instruments carrying amount of the asset is reduced translated into the functional currency on other assets is calculated using the available for use; amount is the higher of an asset’s fair value Financial assets and liabilities are offset and and the amount of the loss is recognised using the exchange rates prevailing at straight-line method to allocate their l Management intends to complete the less costs of disposal and value in use. For the net amount reported in the statement in the income statement. If a loan has a the dates of the transactions or valuation cost less their residual values over their software product and use or sell it; the purposes of assessing impairment, of financial position when there is a legally variable interest rate, the discount rate
60 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 61 Notes to the Financial Statements - 31 December 2014 (continued) Notes to the Financial Statements - 31 December 2014 (continued)
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Impairment of financial assets (continued) Accounting for leases (continued) for measuring any impairment loss is the method, less provision for impairment. A Where any group company purchases the profit or loss on a straight line basis over Under the equity method of accounting, their carrying amounts in the financial current effective interest rate determined provision for impairment of trade and Company’s equity share capital (treasury the period of the lease. interests in joint ventures are initially statements. However, deferred tax under the contract. As a practical other receivables is established when there shares), the consideration paid, including recognised at cost and adjusted thereafter liabilities are not recognised if they arise expedient, the Company may measure is objective evidence that the Company any directly attributable incremental costs When an operating lease is terminated to recognise the Company’s share of from the initial recognition of goodwill; impairment on the basis of an instrument’s will not be able to collect all amounts is deducted from equity attributable to before the lease period has expired, any the post-acquisition profits or losses and deferred income tax is not accounted for fair value using an observable market price. due according to the original terms of the the Company’s equity holders until the payment required to be made to the movements in other comprehensive if it arises from initial recognition of an receivables. Significant financial difficulties shares are cancelled or reissued. Where lessor by way of penalty is recognised income. When the Company’s share of asset or liability in a transaction other than If, in a subsequent period, the amount of of the debtor, probability that the such ordinary shares are subsequently as an expense in the period in which losses in a joint venture equals or exceeds a business combination that at the time of the impairment loss decreases and the debtor will enter bankruptcy or financial reissued, any consideration received, net termination takes place. its interests in the joint ventures (which the transaction affects neither accounting decrease can be related objectively to an reorganisation, and default or delinquency of any directly attributable incremental includes any long-term interests that, in nor taxable profit or loss. Deferred event occurring after the impairment was in payments (more than 90 days overdue) transaction costs is included in equity. Leases of property, plant and equipment, substance, form part of the Company’s income tax is determined using tax rates recognised (such as an improvement in the are considered indicators that the where the Company has substantially net investment in the joint ventures), the (and laws) that have been enacted or debtor’s credit rating), the reversal of the receivable is impaired. The amount of the Trade payables all the risks and rewards of ownership, Company does not recognise further substantively enacted by the balance sheet previously recognised impairment loss is provision is the difference between the are classified as finance leases. Finance losses, unless it has incurred obligations date and are expected to apply when recognised in the income statement. asset’s carrying amount and its recoverable Trade payables are obligations to pay for leases are capitalised at the lease’s or made payments on behalf of the joint the related deferred income tax asset is amount, being the present value of goods or services that have been acquired commencement at the lower of the ventures. realised or the deferred income tax liability Inventories estimated future cash flows, discounted in the ordinary course of business from fair value of the leased property and is settled. at the original effective interest rate. The suppliers. Accounts payable are classified the present value of the minimum lease Current and deferred income tax Inventories are stated at the lower of carrying amount of the asset is reduced as current liabilities if payment is due payment. The tax expense for the period Deferred income tax assets are recognised cost and net realisable value. Cost is through the use of an allowance account, within one year or less (or in the normal comprises current, deferred income only to the extent that it is probable determined using the first-in, first-out and the amount of the loss is recognised in operating cycle of the business if longer). Each lease payment is allocated between tax and Corporate Social Responsibility that future taxable profit will be available (FIFO) method. Cost comprises direct the statement of comprehensive income. If not, they are presented as non-current the liability and finance charges. The contribution. The tax expense for the against which the temporary differences costs only. Net realisable value is the When a receivable is uncollectible, it liabilities. corresponding rental obligations, net of period comprises current and deferred tax. can be utilised. estimated selling price in the ordinary is written off against the allowance finance charges, are included in other long Tax is recognised in the income statement, course of business, less the costs of account for trade or other receivables. Trade payables are recognised initially at term payables. The interest element of except to the extent that it relates to Deferred income tax is provided on completion and applicable variable selling Subsequent recoveries of amounts fair value and subsequently measured at the finance cost is charged to the income items recognised in other comprehensive temporary differences arising from expenses. previously written off are credited against amortised cost using the effective interest statement over the lease period so as income or directly in equity. In this depreciation on plant and equipment, ‘administrative expenses’ in the statement rate method. to produce a constant periodic rate of case, the tax is also recognised in other provision for impairment of receivables Spares, accessories and supplies included of comprehensive income. Bad debts are interest on the remaining balance of the comprehensive income or directly in and retirement benefit obligations, under inventories consist of items which written off in the year in which they are Accounting for leases liability for each period. The property, equity, respectively. except for deferred income tax liability are regularly used for repairs, maintenance identified. plant and equipment acquired under where the timing of the reversal of the and new installations. They are stated at Leases in which a significant portion of finance leases is depreciated over the The current income tax charge is temporary difference is controlled by the lower of cost and net realisable value. Cash and cash equivalents the risks and rewards of ownership are shorter of the useful life of the asset and calculated on the basis of the tax laws the Company and it is probable that the retained by the lessor are classified as the lease term. enacted or substantively enacted at the temporary difference will not reverse in Trade receivables In the statement of cash flows, cash and operating leases. Payments made under reporting date. Management periodically the foreseeable future. cash equivalents includes cash in hand, operating leases are charged to the Investment in joint venture evaluates positions taken in tax returns Trade receivables are amounts due from deposits held at call with banks, other income statement on a straight-line basis The Company has applied IFRS 11 to with respect to situations in which Deferred income tax assets and liabilities customers for goods sold in the ordinary short-term highly liquid investments with over the period of the lease. all joint arrangements. Under IFRS 11, applicable tax regulation is subject to are offset when there is a legally course of business. If collection is expected original maturities of three months or less investments in joint arrangements are interpretation. It establishes provisions enforceable right to offset current tax in one year or less (or in the normal and bank overdrafts. Bank overdrafts are The Company leases land under operating classified as either joint operations or joint where appropriate on the basis of assets against current tax liabilities and operating cycle of the business if longer), shown separately on the statement of leases. Upfront lease payments are ventures depending on the contractual amounts expected to be paid to the tax when the deferred income taxes assets they are classified as current assets. If not, financial position. carried forward as prepaid operating rights and obligations of each investor. The authorities. and liabilities relate to income taxes levied they are presented as non-current assets. leases under non-current assets and are Company has assessed the nature of its by the same taxation authority on either Share capital amortised so as to record a constant joint arrangements and determined them Deferred income tax is recognised on the same taxable entity or different taxable Trade receivables are recognised initially Ordinary shares are classified as “Share annual charge to the profit or loss over to be joint ventures. Joint ventures are temporary differences arising between entities where there is an intention to at fair value and subsequently measured at Capital” in equity. the lease period. Other payments made accounted for using the equity method. the tax bases of assets and liabilities and settle the balances on a net basis. amortised cost using the effective interest under operating leases are charged to the
62 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 63 Notes to the Financial Statements - 31 December 2014 (continued) Notes to the Financial Statements - 31 December 2014 (continued)
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Current and deferred income tax (continued) Provisions (continued)
Employee benefits in actuarial assumptions are charged or date, or whenever an employee accepts included in the same class of obligations Dividend distributions management of the Company. This is credited to equity in other comprehensive voluntary redundancy in exchange for may be small. the interest rate that should be used to l Pension and retirement plans income in the period in which they arise. these benefits. The Company recognises Dividend distributions to the Company’s determine the present value of estimated termination benefits at the earlier of the Provisions are measured at the present shareholders are recognised as a liability in future cash outflows expected to be The Company has both a defined benefit Past-service costs are recognised following dates: (a) when the Company value of the expenditures expected to be the Company’s financial statements in the required to settle the pension obligations. pension plan and a defined contribution immediately in income. can no longer withdraw the offer of required to settle the obligation using a year in which the dividends are approved In determining the appropriate discount pension plan. those benefits; and (b) when the entity pre-tax rate that reflects current market by the Company’s shareholders. rate, the Company considers the interest A defined contribution plan is a pension recognises costs for a restructuring that is assessments of the time value of money rates of high-quality corporate bonds that A defined benefit plan is a pension plan under which the Company pays fixed within the scope of IAS 37 and involves and the risks specific to the obligation. The 3 CRITICAL ACCOUNTING are denominated in the currency in which plan that defines an amount of pension contributions into a separate entity. The the payment of termination benefits. In increase in the provision due to passage of ESTIMATES AND the benefits will be paid, and that have benefit that an employee will receive on Company has no legal or constructive the case of an offer made to encourage time is recognised as interest expense. JUDGEMENTS terms to maturity approximating the terms retirement, usually dependent on one or obligations to pay further contributions if voluntary redundancy, the termination of the related pension liability. more factors such as age, years of service the fund does not hold sufficient assets to benefits are measured based on the Revenue recognition Estimates and judgements are continually and compensation. The plan is funded by pay all employees the benefits relating to number of employees expected to accept evaluated and are based on historical Other key assumptions for pension the payments from the Company taking employee service in the current and prior the offer. Benefits falling due more than Revenue is measured at the fair value of experience and other factors, including obligations are based in part on current account of the recommendations of periods. 12 months after the end of the reporting the consideration received or receivable, experience of future events that are market conditions. Additional information independent qualified actuaries. period are discounted to their present and represents amounts receivable for believed to be reasonable under the is disclosed in Note 21. A defined benefit plan is a pension plan value. goods supplied, stated net of discounts, circumstances. The liability recognised in the statement that is not a defined contribution plan. returns and value added taxes. The 4 FINANCIAL RISK of financial position in respect of defined Deposits on LPG cylinders Company recognises revenue when Critical accounting estimates and MANAGEMENT benefit pension plans is the present For defined contribution plans, the the amount of revenue can be reliably assumptions value of the defined benefit obligation Company pays contributions to publicly or Deposits on LPG cylinders are accounted measured; when it is probable that future Financial risk factors at the end of the reporting period less privately administered pension insurance for as part of current liabilities and are economic benefits will flow to the entity; The Company makes estimates and the fair value of plan assets. The defined plans on a mandatory, contractual or recognised at historical cost in the financial and when specific criteria have been met assumptions concerning the future. The The Company’s activities expose it to benefit obligation is calculated annually voluntary basis. The Company has statements. for each of the Company’s activities, as resulting accounting estimates will, by a variety of financial risks: market risk by independent actuaries using the no further payment obligations once described below. definition, seldom equal the related actual (including foreign exchange risk, price risk projected unit credit method. The present the contributions have been paid. The Provisions results. The estimates and assumptions that and cash flow interest rate risk), credit value of the defined benefit obligation is contributions are recognised as employee Sale of goods have a significant risk of causing a material risk and liquidity risk. The Company’s determined by discounting the estimated benefit expense when they are due. Provisions for environmental restoration, Sales are recognised upon delivery of adjustment to the carrying amounts overall risk management programme future cash outflows using interest rates Prepaid contributions are recognised as restructuring costs and legal claims are products and customer acceptance, if any, of assets and liabilities within the next focuses on the unpredictability of financial of high-quality corporate bonds that are an asset to the extent that a cash refund recognised when: the Company has a net of trade discounts and value added financial year are addressed below. markets and seeks to minimise potential denominated in the currency in which the or a reduction in the future payments is present legal or constructive obligation as tax. adverse effects on the Company’s financial benefits will be paid, and that have terms available. a result of past events; it is probable that l Pension benefits performance. to maturity approximating to the terms of an outflow of resources will be required Dividend income the related pension obligation. In countries l Other benefits to settle the obligation, and the amount Dividend income is recognised when the The present value of the pension Risk management remains within the where there is no deep market in such has been reliably estimated. Provisions are right to receive payment is established. obligations depends on a number of responsibility of the Board of Directors bonds, the market rates on government Employee entitlement to annual leave and not recognised for future operating losses. factors that are determined on an actuarial to whom the Audit and Risk committee bonds are used. The actuaries carry out other benefits are recognised when they Interest income basis using a number of assumptions. The reports. The board provides written a full valuation of the plan every three/ accrue to the employees. Where there are a number of similar Interest income is recognised using the assumptions used in determining the principles for overall risk management, as four years (the latest valuation was done obligations, the likelihood that an effective interest method. When a loan net cost (income) for pensions include well as written policies covering specific at 30 November 2011) and the next full l Termination benefits outflow will be required in settlement and receivable is impaired, the Company the discount rate. Any changes in these areas, such as currency risk, interest rate valuation is due in 2015. is determined by considering the class reduces the carrying amount to its assumptions will impact the carrying risk, credit risk, and investment of excess Termination benefits are payable when of obligations as a whole. A provision is recoverable amount, being the estimated amount of pension obligations. liquidity. Actuarial gains and losses arising from employment is terminated by the recognised even if the likelihood of an future cash flow discounted at the original experience adjustments and changes Company before the normal retirement outflow with respect to any one item effective interest rate of the instrument, The Company’s actuary determines the (a) Market risk and continues unwinding the discount as appropriate discount rate at the end (i) Foreign exchange risk interest income. of each year in consultation with the Currency risk is the risk that the fair
64 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 65 Notes to the Financial Statements - 31 December 2014 (continued) Notes to the Financial Statements - 31 December 2014 (continued)
4 FINANCIAL RISK MANAGEMENT (Continued) 4 FINANCIAL RISK MANAGEMENT (Continued) Current and deferred income tax (continued) Credit risk (continued) value or future cash flows of a financial United States dollar (‘USD’). Currency risk maintains sufficient liquid resources in expect any major losses from non- Capital risk management that are different from those of other instrument will fluctuate because of arises from future commercial transactions from its USD denominated receipts to performance by these counterparties. In The Company’s objectives when managing business segments. The Company operates changes in foreign exchange rates. and recognised assets and liabilities. It is meet its USD denominated obligations as the event of default of customers, who capital are to safeguard the Company’s principally in Mauritius and has identified the Company’s policy not to enter into any they fall due. require timely delivery of petroleum ability to continue as a going concern in the following business segments: The Company transacts with international currency hedging transactions. To manage products, LPG & Lubricants to run their order to provide returns for shareholders customers and suppliers and is exposed to its foreign exchange risk arising from future The currency profile of the Company’s operations, the Company reserves the and benefits for other stakeholders and l Aviation and marine currency risk arising from various currency commercial transactions and recognised USD-denominated financial assets and right to stop delivery of these products to maintain an optimal capital structure to l Regulated retail and commercial exposures, primarily with respect to the assets and liabilities, the Company liabilities is summarised as follows: until the outstanding debt is recovered. reduce the cost of capital. l Non – regulated retail and commercial
Financial Financial Financial Financial Credit risk arising on cash and cash The capital of the Company consists The operations of the joint venture assets liabilities assets liabilities equivalents is considered to be minimal as of equity and retained earnings. The comprise of LPG terminal usage facilities. 2014 2014 2013 2013 these are placed with reputable financial Company does not have any debt, other Rs’000 Rs’000 Rs’000 Rs’000 institutions. than short-term bank overdrafts. In order There are no sales between the business United States Dollar 362,106 484,196 558,881 930,146 to maintain or adjust the capital structure, segments. Revenue from no single (c) Liquidity risk the Company may adjust the amount of customer amounted to 10% or more of dividends paid to shareholders. the Company’s total revenue. Unallocated Prudent liquidity risk management implies costs represent net expenses that do At 31 December 2014, if the Mauritian (iii) Cash flow and fair value interest rate the repo rate has not fluctuated in 2014 maintaining sufficient cash, the availability Fair value estimation not directly relate to a business segment. rupee had weakened/strengthened by risk (25 basis point in 2013). of funding through an adequate amount Segment assets consist primarily of 5% against the USD with all other of committed credit facilities and the The carrying value of trade and other property, plant and equipment, prepaid variables held constant, pre-tax profit Cash flow interest rate risk arises from the (b) Credit risk ability to close out market positions. Due receivables, cash and cash equivalents, bank operating leases, other long term assets, for the year would have decreased/ possibility that changes in interest rates will to the dynamic nature of the underlying overdrafts, trade and other payables and inventories, trade and other receivables increased by Rs 6,104,500 (2013 - Rs affect future cash flows or the fair values of Credit risk refers to the risk that a businesses, company treasury maintains deposits on LPG cylinders are assumed to and prepayments, investment in joint 18,563,250), mainly as a result of currency the assets. The Company’s interest rate risk counter-party will default on its contractual flexibility in funding by maintaining approximate their fair values due to their venture, and exclude cash and cash losses/gains on translation of US dollar- arises from cash and cash equivalents and obligations resulting in financial loss to the availability of liquid resources under short term maturities. equivalents. Segment liabilities comprise denominated trade receivables and trade short-term bank overdrafts which bear Company. committed credit lines. operating liabilities and exclude items payables. interest at variable rates. The Company Offsetting financial assets and liabilities such as taxation. Capital expenditure does not have long-term borrowings. The Credit risk arising from trade receivables is All of the Company’s financial liabilities, comprises additions to property, plant and Management considers a 5% shift Company mitigates this risk by holding managed at the company level. Credit risk which includes trade and other payables, There were no financial asset and financial equipment. in foreign currency exchange rate is enough cash resources that in turn earn arises from credit exposures to wholesale deposit on LPG cylinders and bank liabilities that were subject to offsetting at appropriate to determine the sensitivity variable interest rates and invests in and retail customers, including outstanding overdrafts are payable within 12 31 December 2014. of USD denominated financial assets and financial institutions where it can earn the receivables and committed transactions. months and the amounts recognised liabilities vis a vis the Mauritian rupee. highest rates of interest. The credit control department assesses in the statement of financial position of 5 SEGMENT INFORMATION the credit quality of the customer, taking Rs 2,051,055,000 (2013: Rs (ii) Price risk Based on the simulations performed, the into account its financial position, past 2,567,490,000) are approximately equal to The Company has determined its impact on pre-tax profit of a 25 basis experience and other factors. Individual the contractual undiscounted cash flows. operating segments based on the reports Price risk is the risk that the fair value or point increase/decrease in interest rate risk limits are set based on internal ratings All balances due within 12 months equal reviewed by the Chief Operating Officer future cash flows of a financial instrument on borrowings would be a maximum in accordance with limits set by the board. their carrying amounts, as the impact of that are used to make strategic decisions. will fluctuate because of changes in market decrease/increase of Rs 1,041,423 The utilisation of credit limits is regularly discounting is not significant. A business segment is a distinguishable prices of equity (other than those arising (2013 - Rs 15,923), respectively based on monitored. The Company adopts prudent liquidity risk component of an entity that is engaged in from interest rate risk or currency risk). the interest bearing bank overdrafts the management by maintaining sufficient cash providing an individual product or service Company had at 31 December. In cases where credit limits were and cash equivalents to meet its normal or a group of related products or services The Company is not exposed to exceeded during the year, this was done operating commitments. and that is subject to risks and returns equity price risk as it does not have any Management considers that a 25 basis in accordance with the Company’s investment in equity securities. point shift in interest rate is reasonable as procedures and management does not
66 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 67 Notes to the Financial Statements - 31 December 2014 (continued) Notes to the Financial Statements - 31 December 2014 (continued)
5 Segment information (continued) 5 Segment information (continued) Segment assets and liabilities are reconciled to the Company’s assets and liabilities as follows: Year ended 31 December 2014 Regulated Non-Regulated Assets Liabilities Aviation and Retail and Retail and Rs’000 Rs’000 marine commercial commercial Total Rs’000 Rs’000 Rs’000 Rs’000 Segment assets/liabilities and interest in joint venture 2,134,247 1,503,738 Unallocated: Revenue from external customers 4,495,186 7,062,978 1,225,936 12,784,100 Property, plant and equipment 218,361 22,832 Segment results ( 18,224) 155,171 176,288 313,235 Value added tax recoverable Other receivables and prepayments 266,915 Unallocated costs ( 131,553) Cash and cash equivalents 55,990 181,682 Operating profit Current income tax asset 3,587 Finance income 677 Retirement benefit obligations 81,723 Finance cost ( 9,540) Deferred income tax liabilities 60,616 Share of profits of joint venture ( 360) 11,039 10,679 Bank overdrafts 416,569 130,748 Profit before income tax 183,498 Other payables Total 2,701,932 2,193,394 Income tax expense ( 29,167) Profit for the year 154,331 Year ended 31 December 2013 (Restated) Segment assets 700,397 1,031,291 366,752 2,098,440 Joint venture 16,640 19,167 35,807 Regulated Non-Regulated Aviation and Retail and Retail and Unallocated assets 567,685 marine commercial commercial Total 2,701,932 Total assets Rs’000 Rs’000 Rs’000 Rs’000
Segment liabilities 508,499 810,008 185,231 1,503,738 Revenue from external customers 4,820,080 7,004,988 1,323,380 13,148,448 Unallocated liabilities 689,656 Segment results ( 5,377) 181,708 184,018 360,349 Total liabilities 2,193,394 Unallocated costs ( 105,635) Operating profit 254,714 Finance income 436 Other segment items Finance cost ( 10,474) 26,470 104,143 17,868 148,481 Capital expenditure Share of profits of joint venture 9,594 9,594 Depreciation ( 8,953) ( 53,403) ( 17,080) ( 79,436) Profit before income tax 254,270 Amortisation - ( 68) - ( 68) Income tax expense ( 31,595) Profit for the year 222,675 Unallocated items Segment assets 999,159 1,092,724 364,795 2,456,678 Capital expenditure 28,887 Joint venture 18,128 18,128 - Amortisation Unallocated assets 728,472 Depreciation ( 11,132) Total assets 3,203,278
Segment liabilities 962,803 1,172,790 314,603 2,450,196 Unallocated liabilities 275,123 Total liabilities 2,725,319 The amounts provided to the Chief Operating Officer with respect to the total assets and total liabilities are measured in a manner consistent with that of the financial statements. Other segment items The assets and liabilities are allocated based on the operations of the segments. Capital expenditure 5,961 68,162 19,674 93,797 Depreciation ( 8,344) ( 49,100) ( 15,077) ( 72,521) Amortisation - ( 68) - ( 68)
Unallocated items Capital expenditure 31,605 Amortisation - Depreciation ( 10,079)
68 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 69 Notes to the Financial Statements - 31 December 2014 (continued) Notes to the Financial Statements - 31 December 2014 (continued)
5 Segment information (continued) 7 Operating profit
The amounts provided to the Chief Operating Officer with respect to the total assets and total liabilities are measured in a manner consistent with that of the The following items have been (credited)/charged in arriving at operating profit: financial statements. The assets and liabilities are allocated based on the operations of the segments. 2014 2013 Segment assets and liabilities are reconciled to the Company’s assets and liabilities as follows: Rs’000 Rs’000
Assets Liabilities (Profit)/loss on disposal of property, plant and equipment ( 131) 261 Rs’000 Rs’000 Depreciation on property, plant and equipment (Note 12) - included in cost of sales 77,522 69,690 Segment assets/liabilities and interest in joint venture 2,474,806 2,450,196 - included in administrative expenses 13,046 12,910 Unallocated: Amortisation of intangible assets (Note 13) - - Property, plant and equipment 205,060 Amortisation of prepaid operating leases (Note 14) 68 68 Value added tax recoverable 51,828 Fees paid to auditor - audit services 1,750 1,960 Other receivables and prepayments 288,197 - audit related services 783 785 Cash and cash equivalents 183,387 Operating lease charges on land 6,126 4,123 Retirement benefit obligations 108,363 Operating lease charges on motor vehicles 6,133 10,633 Dividends payable 29,322 Operating lease charges on vehicles for distribution purposes 42,694 46,651 Deferred income tax liabilities 49,466 Repairs and maintenance: Bank overdrafts 6,369 - included in cost of sales 2,780 1,694 Other payables 75,978 - included in administrative expenses 23,185 29,358 Current income tax liabilities 5,625 Staff costs (Note 11) Total 3,203,278 2,725,319 - included in cost of sales 12,184 11,703 - included in administrative expenses 160,694 125,830 Provision for impairment of receivables (Note 18) 3,715 ( 1,424) Inventories written down - - Cost of inventories recognised as expense 6 Other income - included in cost of sales 11,930,662 12,280,845
2014 2013 Rs’000 Rs’000 8 Finance (costs)/income – net Rental income 12,609 10,948 Management fees 4,046 3,497 Restated Profit/(loss) on disposal of property, plant and equipment 131 (261) 2014 2013 Fuel storage fee 22,678 25,506 Rs’000 Rs’000 Throughput fee 8,841 4,430 Tanker discharge fee 1,123 1,078 Finance costs: Others 11,512 7,765 Interest expense ( 9,540) ( 10,474) 60,940 52,963 ( 9,540) ( 10,474)
Finance income: Interest income 677 436 677 436
Net finance costs: ( 8,863) ( 10,038)
70 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 71 Notes to the Financial Statements - 31 December 2014 (continued) Notes to the Financial Statements - 31 December 2014 (continued)
9 Income tax expense 10 Earnings per share
2014 2013 The calculation of earnings per share is based on the Company’s profit for the year of Rs 154,331,000 (2013 - Rs 222,675,000) and on 29,322,252 Rs’000 Rs’000 ordinary shares in issue and outstanding during the two years ended 31 December 2014 and 31 December 2013. There were no potentially dilutive shares outstanding at 31 December 2014 or 2013. Diluted earnings per share are therefore the same as basic earnings per share. Charge for the year Based on the profit for the year, as adjusted for tax purposes, at 11 Staff costs 17 % (2013 - 17%) 20,142 31,283 Under/(over)-provision of income tax in previous year 2,557 ( 465) 2014 2013 Over-provision of deferred tax in previous year ( 2,873) ( 9,050) Rs’000 Rs’000 Deferred income tax (Note 20) 9,341 9,827 Charge to income statement 29,167 31,595 Wages and salaries 131,776 123,320 Social security costs 1,691 1,543 Pension costs – defined benefit plan (Note 21) 20,110 14,821 Other benefits 36,884 22,896 Current income tax (asset)/liabilities Termination benefits 45 4,371 Recharge of costs to related companies (Note 28) (17,628) (29,418) 2014 2013 172,878 137,533 Rs’000 Rs’000
At 01 January 5,625 (4,393) 2014 2013 Charge for the year 22,699 30,818 Number Number Paid during the year, based on - Previous year’s profit ( 4,390) 9,392 Number of employees at year end 124 120 - Current year’s profit, CSR and TDS ( 27,521) ( 30,192) At 31 December ( 3,587) 5,625 Directors’ emoluments included in staff costs are as follows: A reconciliation between the effective rate of income tax of the Company of 15.89% (2013 – 12.43%) and the applicable income tax rate of 17% (2013 - 17%) follows: 2014 2013 Rs’000 Rs’000 (As a percentage of profit before taxation) Short-term benefits 18,807 15,160 2014 2013 Post-employment benefits 1,816 1,733 % % 20,623 16,893
Applicable income tax rate 17.00 17.00 The recharge of costs is in respect of 12 (2013 - 14) central staff based in Mauritius whose costs are incurred by the Company and recharged to Impact of: VEIBV (Vivo Energy Investment BV). Depreciation on non-qualifying assets 0.01 - Other non-allowable expenses 0.77 0.26 Share of profit of joint venture ( 0.99) ( 0.64) Other non-taxable income ( 0.72) ( 0.45) Under/(over)-provision of income tax in previous year 1.39 ( 0.18) Over-provision of deferred tax in previous year ( 1.57) ( 3.56) Effective income tax rate 15.89 12.43
72 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 73 Notes to the Financial Statements - 31 December 2014 (continued) Notes to the Financial Statements - 31 December 2014 (continued)
12 Property, plant and equipment 13 Intangible assets
Computer
Total software Rs’000 907,051 908,682 Rs’000 1,815,733 Cost: - At 01 January 2013 21,304 Rs’000 Capital 22,762 22,762 61,823) - Disposals ( 18,789)
in progress At 31 December 2013 2,515 Disposals - At 31 December 2014 2,515 4,630 fittings Rs’000 Accumulated amortisation: 19,950 15,320 At 01 January 2013 21,304 Disposals ( 18,789) At 31 December 2013 2,515
1,754 Disposals - Rs’000 26,452 24,698 2,515
Computer Furniture and expenditure At 31 December 2014 equipment Net book amount: At 31 December 2014 -
486 At 31 December 2013 - 1,969 1,483 Rs’000
Motor vehicles 14 Prepaid operating leases
Rs’000 Rs’000 717,957 613,738 Plant and 1,331,695 equipment Cost: At 01 January 2013, 31 December 2013 and 31 December 2014 1,473 Amortisation: land Rs’000 71,287 54,348 At 01 January 2013 733 125,635 Buildings Charge for the year 68 At 31 December 2013 801 Charge for the year 68
76,306 At 31 December 2014 869 196,286 119,980 Freehold Rs’000 on leasehold buildings Net book amount: At 31 December 2014 604
- At 31 December 2013 672 Rs’000 90,984 90,984 Operating leases represent upfront lease payments on certain lease of land.
Freehold land Freehold 90,984 146,819 - - - 115,800 10,001 - 90,984 21,345 1,062,286 ( 2,067 177,163 1,002) - - - 2,154 ( - - 117,782 92,468 16,342 - 85) 27,500 1,185,224 3,126 - ( 40,478 ( 10,008) 7,723 732 345) - 20,321 2,886 130 135,420 - - 69,275 - 33 25,266 17,899 - 1,535,139 - ( ( ( 2,267) - 20,034 6,834) - 332 - ( 14) ( - 27,221 619) 1,186 19,769 931) 1,646,560 - - 125,402 14 - ( - 1 - ( 13,981) - ( - 16,696 - 85) 177,368 ( 21,155) - - - ( - - 8,195) - - - - - 61,297 ( - 7,946 - 834) 59,753 - ( 68,409 - 5,685 593,669 8,196 85) ( 65,353 66,866 ( 299) - 2,154 5,934 9,971) 650,564 111 26,121 74,227 - - 2,265 - ( 12,693 389 ( 6,834) 149 24,243 2,267) ( - ( 1,603 13,769 931) - 455 527) 755,687 - 1,607 - - - - ( 82,600 ( 824,603 13,684) - 56) - 90,568 - - ( 8,120) - -
90,984 108,754 52,429 534,660 621 1,023 6,265 27,221 821,957 15 Other long term assets
2014 2013 Rs’000 Rs’000
Loans to Dealers 11,425 10,230 11,425 10,230
Cost: At 01 January 2013 Additions Assets capitalised Write offs/adjustments Disposals At 31 December 2013 Additions Assets capitalised Write offs/adjustments Disposals At 31 December 2014 depreciation: Accumulated At 01 January 2013 Charge the year for Disposals At 31 December 2013 Charge the year for Adjustments Disposals At 31 December 2014 Net book amount: At 31 December 2014 At 31 December 2013 Included in capital expenditure progress are plant and equipment amounting to Rs 22,762,030 (2013 - 27,220,853) the course of construction. Loans to Dealers relate to loan agreements between the Company and several retailers for the construction of service stations.
74 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 75 Notes to the Financial Statements - 31 December 2014 (continued) Notes to the Financial Statements - 31 December 2014 (continued)
16 Investment in joint venture 16 Investment in joint venture (continued)
ESCOL MOST Total Summarised financial information for joint venture: 2014 2013 2014 2013 2014 2013 Set out below are the summarised financial information for Energy Storage Co.Ltd and Mer Rouge Oil Storage Terminal Co.Ltd, which are accounted Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 for using the equity method.
Cost: Summarised balance sheet At 01 January 15,000 15,000 - - 15,000 15,000 ESCOL MOST Investment in share capital - - 17,000 - 17,000 - As at 31 December As at 31 December At 31 December 15,000 15,000 17,000 - 32,000 15,000 2014 2013 2014 2013 Rs’000 Rs’000 Rs’000 Rs’000 Share of post-acquisition reserves: At 01 January 3,128 3,534 - - 3,128 3,534 Current Share of profit after income tax 11,039 9,594 ( 360) - 10,679 9,594 Cash and cash equivalents 24,733 25,332 20,339 - 5,192 264 Dividends received ( 10,000) ( 10,000) - - ( 10,000) ( 10,000) Other current assets (excluding cash) 5,376 - Total current assets 29,925 30,708 20,603 - Other comprehensive income ------Financial liabilities (excluding trade payables) - - - - 4,167 ( 360) 3,807 At 31 December 3,128 - 3,128 Other current liabilities (including trade payables) ( 1,713) ( 3,077) - - Net book amount: Total current liabilities ( 1,713) ( 3,077) - - At 31 December 19,167 18,128 16,640 - 35,807 18,128 Non-current Assets 33,710 33,361 9,958 - Financial liabilities - - - - Nature of investment in joint venture 2014 and 2013: Other liabilities ( 23,588) ( 24,735) - - Total non-current liabilities ( 23,588) ( 24,735) - - Name of entity Place of Activity Description of % % Net assets 38,334 36,257 30,561 - incorporation shares held holding holding 2014 2013 Energy Storage Co. Ltd Mauritius LPG storage Ordinary 50.0 50.0 Mer Rouge Oil Storage Terminal Mauritius Storage of Ordinary 25.0 25.0 Summarised statement of comprehensive income Co. Ltd petroleum products ESCOL MOST For the period ended 31 For the period ended 31 Energy Storage Company Limited (ESCOL) and Mer Rouge Oil Storage Terminal Co.Ltd (MOST) are private companies and there are no quoted December December market prices available for their shares. 2014 2013 2014 2013 There are no contingent liabilities relating to the Company’s interest in its joint ventures. Rs’000 Rs’000 Rs’000 Rs’000
Revenue 33,384 32,254 - - Depreciation and amortisation ( 2,248) ( 2,231) - - Interest income 728 839 14 - Interest expense - - - - Pre-tax profit/(loss) from continuing operations 25,995 24,969 - - Income tax expense ( 3,918) ( 5,373) - - Post-tax profit/(loss) from continuing operations 22,077 19,596 ( 1,439) - Post-tax profit from discontinued operations - - - - Other comprehensive income - - - - Total comprehensive income 22,077 19,596 ( 1,439) - Dividends received from joint venture 10,000 10,000 - -
76 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 77 Notes to the Financial Statements - 31 December 2014 (continued) Notes to the Financial Statements - 31 December 2014 (continued)
16 Investment in joint venture (continued) 17 Inventories Reconciliation of summarised financial information Reconciliation of the summarised financial information presented to the carrying amount of its interest in the joint venture: 2014 2013 Rs’000 Rs’000 Summarised financial information ESCOL MOST 2014 2013 2014 2013 Rs’000 Rs’000 Rs’000 Rs’000 Goods for resale (at cost) 650,360 978,916 Spares, accessories and supplies (at net realisable value) 16,591 16,536 Opening net assets 1 January 36,257 36,661 - - 666,951 995,452 Investment during the year - - 20,000 - Deposit on share capital - - 12,000 - 18 Trade and other receivables Profit/(loss) for the period 22,077 19,596 ( 1,439) - Other comprehensive income - - - - Dividend paid ( 20,000) ( 20,000) - - 2014 2013 Closing net assets 38,334 36,257 30,561 - Rs’000 Rs’000 Interest in joint venture @ 50%, 25% 19,167 18,128 4,640 - Deposit on share capital - - 12,000 - Trade receivables 930,019 1,022,742 Goodwill - - - - Less: provision for impairment of receivables ( 16,327) ( 13,794) Carrying value 19,167 18,128 16,640 - Trade receivables – net 913,692 1,008,948 Other receivables 27,894 25,156 Less: provision for impairment of other receivables ( 1,139) ( 1,001) Other receivables – net 26,755 24,155 Trade receivables from related companies (Note 28 (vii)) 42,433 84,984 Value added tax recoverable 22,832 51,828 Prepayments 13,174 3,537 78,439 140,349 1,018,886 1,173,452
The carrying amount of receivables and prepayments approximate their fair values.
Trade receivables that are less than three months past due are not considered impaired except where management identifies specific instances where a trade receivable would be subject to impairment. The ageing analysis of trade receivables that are not impaired are as follows: 2014 2013 Rs’000 Rs’000
Not past due and not impaired 923,969 1,055,867 01 – 30 days 20,762 29,287 31 – 90 days 8,165 8,190 91 – 365 days 3,229 588 956,125 1,093,932
As of 31 December 2014, trade receivables of Rs 16,327,000 (2013 - Rs 13,794,000) were impaired. The amount of the provision was Rs 16,327,000 as of 31 December 2014 (2013 - Rs 13,794,000). The individually impaired receivables relate to customers, which are in unexpectedly difficult economic situations. The ageing of these receivables is as follows:
78 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 79 Notes to the Financial Statements - 31 December 2014 (continued) Notes to the Financial Statements - 31 December 2014 (continued)
18 Trade and other receivables (Continued) 20 Deferred income tax liabilities The gross movement on the deferred income tax account is as follows: 2014 2013 2014 2013 Rs’000 Rs’000 Rs’000 Rs’000
1 to 3 months (gross receivable) 3,336 360 At 01 January 49,466 60,572 1 to 3 months (provision for impairment) 3,336 360 Over-provision of deferred tax in prior year ( 2,873) ( 9,050) Deferred tax liability/(asset) on remeasurements of post employment 3 to 6 months (gross receivable) 128 1,156 benefit obligations charged to other comprehensive income 4,682 ( 11,883) 3 to 6 months (provision for impairment) 128 1,156 Charge for the year (Note 9) 9,341 9,827 At 31 December 60,616 49,466 Over 6 months (gross receivable) 12,863 12,278 Over 6 months (provision for impairment) 12,863 12,278 Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority.
The carrying amounts of the Company’s trade and other receivables are denominated in the following currencies: The movements in deferred income tax assets and liabilities during the year are shown below: Provision for Retirement 2014 2013 Capital tax impairment of benefit Rs’000 Rs’000 allowances receivables obligations Total Rs’000 Rs’000 Rs’000 Rs’000 Currency Mauritian rupee 656,852 720,990 At 01 January 2013 71,017 ( 3,006) ( 7,439) 60,572 United States dollar 362,034 452,462 Credit to other comprehensive income - - ( 11,883) ( 11,883) 1,018,886 1,173,452 Over-provision of deferred tax in prior year ( 9,050) - - ( 9,050) Charge for the year to income statement 8,436 491 900 9,827 Movements on the Company’s provision for impairment of trade and other receivables are as follows: At 31 December 2013 70,403 ( 2,515) ( 18,422) 49,466 2014 2013 Charge to other comprehensive income - - 4,682 4,682 Rs’000 Rs’000 Over-provision of deferred tax in prior year ( 2,873) - - ( 2,873) Charge/(credit) for the year to income statement 9,948 ( 454) ( 153) 9,341 At 01 January 14,795 17,685 At 31 December 2014 77,478 ( 2,969) ( 13,893) 60,616 Provision for impairment of trade and other receivables 3,715 ( 1,424) Receivables written off during the year as uncollectible ( 1,044) ( 1,466) 2014 2013 At 31 December 17,466 14,795 21 Retirement benefit obligations Rs000 Rs000
The creation and release of provision for impaired receivables have been included in ‘administrative expenses’ in profit or loss. Amounts charged to Pension benefits the allowance account are generally written off, when there is no expectation of recovering additional cash. The amounts recognised in the statement of financial position are determined as follows:
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable. At 31 December 2014, the Company held 2014 2013 bank guarantees as security on receivables amounting to Rs 28,970,000 (2013 - Rs 18,400,000). Rs’000 Rs’000
19 Share capital Present value of funded obligations 373,452 380,243 Fair value of plan assets ( 291,729) ( 271,880) 2014 2013 2014 2013 Liability in the statement of financial position 81,723 108,363 Number Number Rs000 Rs000
Authorised, Issued and fully paid: Ordinary shares of Nil par value 29,322,252 29,322,252 293,223 293,223
80 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 81 Notes to the Financial Statements - 31 December 2014 (continued) Notes to the Financial Statements - 31 December 2014 (continued)
21 Retirement benefit obligations (Continued) 21 Retirement benefit obligations (Continued) The amounts recognised in profit or loss are as follows: 2014 2013 Rs’000 2014 2013 Rs’000 Rs’000 Rs’000 Cumulative actuarial gains/(losses) at the end of the year ( 168,132) Current service cost 15,906 9,714 Cumulative actuarial losses at start of year ( 98,236) 27,541 Scheme expenses - 653 Actuarial gains/(losses) recognised this year ( 69,896) ( 140,591) Cost of insuring risk benefits - 1,245 Cumulative actuarial losses at end of year ( 168,132) Effect of curtailments / settlements ( 2,596) - Net interest cost 6,800 3,209 Total included in staff costs (Note 11) 20,110 14,821 Plan assets are comprised as follows:
2014 2014 The actual return on plan assets amounted to Rs 27,156,773 (2013 - Rs 28,473,198). 2013 2013 Rs’000 % Rs’000 % The movement in the (asset)/liability recognised in the balance sheet is as follows: Local equities 29,856 10 - - 2014 2013 Overseas equities 155,756 54 163,225 60 106,117 36 Rs’000 Rs’000 Fixed interest 108,655 40 291,729 100 271,880 100 At 01 January 108,363 43,758 Total expense – as shown above 20,110 14,821 The asset of the Fund are mainly invested overseas in the Global Aggregate Bond Index Fund B and Blackrock World Index Subfund. A small amount Employer’s contributions ( 19,209) ( 20,112) is invested in local equities through MCBIM. There is also some cash held locally. The expected return on plan assets is determined by considering Actuarial (gains)/losses recognised in other comprehensive income ( 27,541) 69,896 the expected returns available on the assets underlying the current investment policy. Expected returns on overseas equities reflect long-term At 31 December 81,723 108,363 government bond yields plus an approximate equity risk premium. Expected yields as fixed interest securities are based on government bond yields of approximately 7% per annum.
The movement in present value of funded obligations is as follows: Vivo Energy Mauritius Limited is expected to contribute Rs 12,000,000 to the pension scheme for the year ending 31 December 2015.
The weighted average duration of the liabilities as at 31 December 2014 is 15 years. 2014 2013 Rs’000 Rs’000 The principal actuarial assumptions used were as follows: At 01 January 380,243 275,235 Current service cost 15,906 9,714 2014 2013 Interest cost 24,995 22,515 % % Actuarial (gains)/losses ( 18,578) 79,063 Benefits paid (9,913) ( 6,284) Discount rate 7.00 7.00 Settlements ( 19,201) - Future salary increases 5.00 6.00 At 31 December 373,452 380,243 Future pension increases 3.00 3.00 NPS Ceiling increases 5.00 6.00 The movement in fair value of plan assets is as follows:
At 01 January 271,880 231,477 In case of the funded plans, the Company ensures that the investment positions are managed within an asset-liability matching (ALM) framework that Interest income 18,195 19,306 has been developed to achieve long-term investments that are in line with the obligations under the pension schemes. Within this framework, the Employer’s contribution 19,209 20,112 Company’s ALM objective is to match assets to the pension obligations by investing in long-term fixed interest securities with maturites that match Scheme expenses - ( 653) the benefit payments as they fall due and in the appropriate currency. The Company actively monitors how the duration and the expected yield of Cost of insuring risk benefits - ( 1,245) the investments are matching the expected cash outflows arising from the pension obligations. The Company has not changed the processes used to Actuarial gains 8,963 9,167 manage its risks from previous periods. The Company does not use derivatives to manage its risk. A large portion of assets in 2014 consists of equities Benefits paid ( 9,913) ( 6,284) and bonds, although the Company also invests in property, bonds and cash. The Company believes that equities offer the best returns over the long Settlements ( 16,605) - term with an acceptable level of risk. The majority of equities are in a globally diversified portfolio of international blue chip entities. At 31 December 291,729 271,880 The next triennial valuation as at 31 December 2014 is currently being carried out. In the meantime, as from 1 January 2015, the Company has Analysis of amount recognised in other comprehensive income adopted a provisonal contribution rate which would be sufficient to eliminate the deficit over the agreed period. Furthermore, as employees have stopped accruing service under the Defined Benefit Scheme as from 1 January 2015, there would henceforth not be any service costs. Gains on pension scheme assets 8,963 9,167 Experience gains/(losses) on the liabilities 18,578 ( 79,063) Actuarial gains/(losses) recognised in other comprehensive income 27,541 ( 69,896)
82 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 83 Notes to the Financial Statements - 31 December 2014 (continued) Notes to the Financial Statements - 31 December 2014 (continued)
21 Retirement benefit asset (Continued) 21 Retirement benefit asset (Continued) Plan assets Sensitivity analysis None of the plan assets are invested in shares of the Company or in property used by the Company. The sensitivity of the defined benefit obligation to changes in the weighted principal assumption have been determined based on sensibly possible changes of the discount rate or salary increase rate occurring at the end of the reporting period if all other Mortality rate assumptions remained unchanged and are as follows : Assumptions regarding future mortality experience are set based on actuarial advice in accordance with published statistics and experience. The average life expectancy in years of a pensioner retiring at age 60 on the reporting date is as follows: Impact on defined benefit obligation Change in Decrease in Increase in 2014 2013 Assumption Assumption Assumption
Discount rate 0.5% Increase by 8.2% Decrease by 7.3% Male 21 21 Future long term salary assumption 0.5% Decrease by 2.7% Increase by 2.9% Female 24 24
The average life expectancy in years of a pensioner retiring at age 60, 20 years after the reporting date is as follows: The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation Male 21 21 to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected Female 24 24 unit credit method at the end of the reporting period) has been applied as when calculating the pension liability recognised within the statement of financial position. 2014 2013 Rs’000 Rs’000 The methods and types of assumptions used in preparing the sensitivity analyses did not change compared to the previous period.
At 31 December: Through its defined benefit pension plans, the Company is exposed to a number of risks, the most significant of which are detailed Present value of defined benefit obligations 373,452 380,243 Fair value of plan assets 291,729 271,880 below: Deficit 81,723 108,363 Experience adjustments on plan liabilities ( 18,578) 79,063 Asset volatility Experience adjustments on plan assets 8,963 9,167 The plan liabilities are calculated using a discount rate set with reference to corporate bond yields; if plan assets underperform this yield, this will create a deficit. The plan holds a significant proportion of equities, which are expected to outperform corporate bonds in the long-term while providing volatility and risk in the short-term. As the plans mature, the Company intends to reduce the level of investment risk by investing more in assets that better match the liabilities.
Changes in bond yields A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans’ bond holdings.
Inflation risk There are some of the Company’s pension obligations which are linked to inflation, and higher inflation will lead to higher liabilities (although, in most cases, caps on the level of inflationary increases are in place to protect the plan against extreme inflation). The majority of the plan’s assets are either unaffected by (fixed interest bonds) or loosely correlated with (equities) inflation, meaning that an increase in inflation will also increase the deficit.
Life expectancy The majority of the plans’ obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plans’ liabilities. This is particularly significant in the plan, where inflationary increases result in higher sensitivity to changes in life expectancy.
84 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 85 Notes to the Financial Statements - 31 December 2014 (continued) Notes to the Financial Statements - 31 December 2014 (continued)
22 Trade and other payables 26 Operating leases
The Company leases various plots of land and vehicles under non-cancellable operating lease agreements. The leases have varying terms, escalation 2014 2013 clauses and renewal rights. The lease expenditure charged to profit or loss during the year is disclosed in Note 7. Rs’000 Rs’000 The future aggregate minimum lease payments under non-cancellable motor vehicle leases are as follows:
Trade payables 1,174,214 2,089,594 Payable to related parties (Note 28 (vii)) 27,026 55,694 2014 2013 Other payables and accruals 138,747 122,457 Rs’000 Rs’000 1,339,987 2,267,745 Within 1 year 13,407 13,604 Between 1 and 5 years 30,591 29,501 23 Deposits on LPG cylinders After five years 18,230 20,764
2014 2013 Rs’000 Rs’000 The future aggregate minimum lease payments under non-cancellable leasehold land leases are as follows:
2014 At 01 January 287,751 272,832 2013 Rs’000 Deposits – net 6,748 14,919 Rs’000 At 31 December 294,499 287,751 Within 1 year 6,902 3,677 Between 1 and 5 years 22,773 7,038 After five years 94,543 639 24 Cash, cash equivalents and bank overdrafts
2014 2013 27 Contingent liabilities Rs’000 Rs’000 At 31 December 2014, the Company had contingent liabilities amounting to Rs 34,057,000 (31 December 2013 – Rs 31,854,000) consisting Cash, cash equivalents and bank overdrafts include the following for the purposes of the cash flow statement. principally of VAT claimed and corporate tax on receipt of Rs 62,986,400 representing proceeds from the assignment of the Company’s economic rights in the Shell trademark in 2008, which it is contesting and for which no liability has been recognised in these financial statements. Cash and cash equivalents 55,990 183,387 Bank overdrafts (416,569) (6,369) The Company has also received a claim from one of its previous retailers. Management does not consider that there is any merit in the said claim (360,579) 177,018 and therefore believes that it is not probable that the said claim will result in a material liability, if any.
Bank overdrafts are repayable on demand and bear average interest rates of 5.42% annually (2013 - 5.66% annually).
28 Related party transactions 25 Dividends The Company declared the following dividends during the year. At 31 December 2014, the Company is controlled by Vivo Energy Mauritius Holdings BV which owns 77.15% of the Company’s shares. The
remaining 22.85% of the shares are widely held and are listed on the Stock Exchange of Mauritius. The intermediate and ultimate parents of the 2014 2013 Company are Vivo Energy Holding BV and HV Investments BV, companies based in Netherlands. Fellow subsidiaries are entities which are controlled Rs’000 Rs’000 by the ultimate parent directly or indirectly through one or more intermediaries. Associates are entities in which the Company has significant
influence but which it does not control. The following transactions were carried out with related parties: Rs 2.80 per ordinary share (2013 - Rs Nil) 82,102 - Rs 2.20 per ordinary share (2013 - Rs 1.00) 64,509 29,322 146,611 29,322
The dividend of Rs 2.80 declared in 2014 represents the final dividend in respect of the financial year ended 31 December 2013. The dividend of Rs 2.20 declared in 2014 represents the interim dividend in relation to the financial year ended 31 December 2014.
86 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 87 Notes to the Financial Statements - 31 December 2014 (continued) Notes to the Financial Statements - 31 December 2014 (continued)
28 Related party transactions (Continued) 28 Related party transactions (Continued)
2014 2013 2014 2013 Rs’000 Rs’000 Rs’000 Rs’000
(i) Purchases of goods and services from fellow subsidiaries iv) Expenses Expenses paid on behalf of fellow subsidiaries: Purchases of goods: Vivo Energy Investment BV (VEIBV) 20,296 - Shell and Vivo Lubricants SA (lubricants freight) 14,545 5,053 Vivo Energy SA (Pty) Ltd (VESA) 21 42,394 Vitol Asia Pte (fuels) 483,842 - Société Malgache des Pétroles Vivo Energy 1,740 5,042 Vitol Bahrain E.C. (fuels) 521,606 - Vivo Energy Botswana 219 - Vivo Energy Kenya 65 10 Purchases of services: Vivo Energy Namibia 69 - Vivo Energy Africa Services Sàrl 96,378 - 22,410 47,446 Vivo Energy South Africa (Pty) Ltd - 103,743 The expenses related to the above transactions were reclaimed from the above related companies. These expenses were invoiced at cost and The above transactions represent the Company’s share of central service cost for business support services and as per the intra group services included staff costs of Rs 17,628,000 (2013 – Rs 29,418,000). agreement (contribution agreement) between Vivo Energy Mauritius Limited and Vivo Energy Africa Services Sàrl (VEAS). (v) Dividends received
Energy Storage Company Ltd (joint venture) 10,000 10,000 2014 2013 Rs’000 Rs’000 (vi) Dividends paid
(ii) Sales of goods and services Vivo Energy Mauritius Holdings BV (parent) 135,740 -
(a) Sales of goods to fellow subsidiary: (vii) Outstanding balances Vitol Aviation 570,024 780,956 Vivo Energy Uganda 299 741 Receivable from related parties: Société Malgache des Pétroles Vivo Energy - 164 570,323 781,861 Vitol Aviation (fellow subsidiary) 31,637 70,198 Vivo Energy Investment BV (VEIBV) (fellow subsidiary) 10,230 - (b) Sales of services: Energy Storage Company Ltd (joint venture) 377 333 Energy Storage Company Ltd (joint venture) (management services) 2,500 2,000 Société Malgache des Pétroles Vivo Energy (fellow subsidiary) 189 - Energy Storage Company Ltd (joint venture) (rent) 288 288 Vivo Energy South Africa (fellow subsidiary) - 14,371 Vivo Energy Indian Ocean Holdings (fellow subsidiary) (management services) 1,216 1,222 Vivo Energy Uganda (fellow subsidiary) - 72 4,004 3,510 Vivo Energy Kenya (fellow subsidiary) - 10 42,433 84,984
The above transactions were carried out on normal commercial terms and conditions. Payable to related parties:
Vivo Energy Africa Services (fellow subsidiary) 26,969 - (iii) Key management personnel (including full time directors) Vivo Energy South Africa - 32,629 Vivo Energy Mauritius Holdings BV (parent) - 22,622 Vitol Aviation (fellow subsidiary) 57 443 2014 2013 27,026 55,694 Number Number The amounts receivable from, and payable to, related parties are unsecured, interest free and have no fixed repayment terms and approximate their Shares held in the Company - Directly - - fair values. - Indirectly - - - -
Emoluments 38,248 27,699 Post employment benefits 4,378 3,687 42,626 31,386
88 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 89 Notes to the Financial Statements - 31 December 2014 (continued) Notes to the Financial Statements - 31 December 2014 (continued)
29 Prior year reclassification 30 Three year summary (Continued)
The Company has reclassified all foreign exchange gains/(losses) arising on cash and cash equivalents which was previously classified under ‘finance Restated income/(cost)’ to ‘other gains/(losses) on exchange – net’. 2014 2013 2012 Rs’000 Rs’000 Rs’000 2013 Rs’000 Statement of financial position
As previously reported Adjustments As restated ASSETS Finance costs – net (21,331) 11,293 (10,038) Non-current assets Other gains/(losses) on exchange - net 7,082 (11,293) (4,211) Property, plant and equipment 908,682 821,957 779,452 Intangible assets - - - Since the above reclassifications have no impact on the statement of financial position, the Company did not present a statement of financial position Prepaid operating leases 604 672 740 at January 1, 2014. Investment in joint venture 35,807 18,128 18,534 Other long term assets 11,425 10,230 41 30 Three year summary 956,518 850,987 798,767
Restated Restated Current assets 2014 2013 2012 Inventories 666,951 995,452 787,532 Rs’000 Rs’000 Rs’000 Trade and other receivables 1,018,886 1,173,452 1,044,222 Cash and cash equivalents 55,990 183,387 14,741 Income statement Income tax asset 3,587 - 4,393 1,745,414 2,352,291 1,850,888 Sales 12,784,100 13,148,448 12,595,242 Total assets 2,701,932 3,203,278 2,649,655
Operating profit 181,682 254,714 252,591 EQUITY & LIABILITIES Finance income 677 436 437 Equity Finance cost (9,540) (10,474) (12,412) Share capital 293,223 293,223 293,223 Share of profit of joint venture 10,679 9,594 10,323 Retained earnings 215,315 184,736 49,396 Total equity 508,538 477,959 342,619 Profit before income tax 183,498 254,270 250,939 Income tax expense (29,167) (31,595) (65,830) LIABILITIES Non-current liabilities Profit for the year 154,331 222,675 185,109 Deferred income tax liabilities 60,616 49,466 60,572 Retirement benefit obligations 81,723 108,363 43,758 Dividends declared per share Rs 5.00 1.00 8.10 142,339 157,829 104,330
Basic and diluted earnings per share 5.26 7.59 6.31 Current liabilities Bank overdrafts 416,569 6,369 391,278 Trade and other payables 1,339,987 2,267,745 1,538,596 Statement of comprehensive income Deposits on LPG cylinders 294,499 287,751 272,832 Current income tax liabilities - 5,625 - 2014 2013 2012 2,051,055 2,567,490 2,202,706 Rs’000 Rs’000 Rs’000 Total liabilities 2,193,394 2,725,319 2,307,036
Profit for the year 154,331 222,675 185,109 Total equity and liabilities 2,701,932 3,203,278 2,649,655
Other comprehensive income Items that will not be reclassified to profit or loss: Remeasurements of post employment benefit obligations 27,541 (69,896) 1,444 Deferred tax (liability)/asset on remeasurement of post employment benefit obligations (4,682) 11,883 (245) Other comprehensive income for the year 22,859 (58,013) 1,199
Profit and total comprehensive income for the year 177,190 164,662 186,308
90 Vivo Energy Mauritius Limited Annual Report 2014 Vivo Energy Mauritius Limited Annual Report 2014 91 Notes to the Financial Statements - 31 December 2014 (continued)
31 Financial instruments by category
Loans and receivables Proxy Form 2014 2013 Rs’000 Rs’000
Financial assets Trade and other receivables 982,880 1,118,087 I/We Cash and cash equivalents 55,990 183,387 of 1,038,870 1,301,474 being a member/members of the abovenamed Company, hereby appoint of At amortised cost or failing him/her 2014 2013 of Rs’000 Rs’000 as my/our proxy to vote for me/us and on my/our behalf at the Annual Meeting of Shareholders of the Company, to Financial liabilities be held on the 15 May 2015 and at any adjournment thereof. Bank overdraft 416,569 6,369 Trade and other payables 1,339,987 2,267,745 Deposit on LPG cylinders 294,499 287,751 I/We desire my/our vote(s) to be cast on the Resolutions as follows: 2,051,055 2,561,865 RESOLUTIONS For Against Abstain 32 Parent and ultimate parent companies I Resolved that the minutes be adopted as true proceedings of the meeting. II Resolved that the Audited Financial Statements of the Company for the At 31 December 2014, the directors consider Vivo Energy Mauritius Holdings B.V. (incorporated in the Netherlands) as the parent company. The year ended 31 December 2014 be hereby approved. intermediate and ultimate parents of the Company are Vivo Energy Holding BV and HV Investments BV, companies based in Netherlands. III Resolved that Mr Jean Noel Patrick CRIGHTON be hereby re-elected as Director of the Company 33 INCORPORATION AND REGISTERED OFFICE IV Resolved that Mr Kim Foong LEUNG SHIN CHEUNG be hereby re-elected as Director of the Company The Company is incorporated and domiciled in Mauritius as a public company with limited liability. The address of its registered office is Roche Bois, Port Louis. V Resolved that Mr. Bernard LE GOFF be hereby elected as Director of the Company. VI Resolved that the Board of Directors of the Company be hereby authorized 34 CURRENCY to fix the remuneration of Messrs PricewaterhouseCoopers, the auditors of the Company, for the financial year ending 31 December 2015. The financial statements are presented in thousands of Mauritian rupees.
Signed this day of
Signature
Notes:
1. A member of the Company entitled to attend and vote at this meeting may appoint a proxy of his own choice (whether a member or not) to attend and vote on his behalf. 2. Please mark in the appropriate box how you wish to vote. If no specific direction as to voting is given, the proxy will exercise his discretion as to how he/she votes. 3. Proxy forms duly signed should reach the registered office of the Company at least FORTY-EIGHT hours before the holding of the meeting or else the instrument of proxy should not be treated as valid.
Shell trademarks used under license 92 Vivo Energy Mauritius Limited Annual Report 2014 Notice of Meeting
Notice is hereby given that the Annual Meeting of Shareholders of Vivo Energy Mauritius Limited (‘the Company’) will be held at Hennessy Park Hotel, Ebene on Friday 15 May 2015 at 14:00.p.m. to transact the following business:
1. To adopt the minutes of proceedings of the last Annual Meeting of Shareholders held on 15 May 2014.
Ordinary Resolution I
“Resolved that the minutes be adopted as true proceedings of the meeting.”
2. To consider the Annual Report 2014 of the Company.
3. To receive the report of Messrs PricewaterhouseCoopers, the auditors of the Company.
4. To consider and approve the Audited Financial Statements of the Company for the year ended 31 December 2014.
Ordinary Resolution II
“Resolved that the Audited Financial Statements of the Company for the year ended 31 December 2014 be hereby approved.”
5. To re-elect as Director of the Company Mr Jean Noel Patrick CRIGHTON who retires by rotation and, being eligible, offers himself for re- election in accordance with the Constitution of the Company.
Ordinary Resolution III
“Resolved that Mr Jean Noel Patrick CRIGHTON be hereby re-elected as Director of the Company.”
6. To re-elect as Director of the Company Mr Kim Foong LEUNG SHIN CHEUNG who retires by rotation and, being eligible, offers himself for re-election in accordance with the Constitution of the Company.
Ordinary Resolution IV
“Resolved that Mr Kim Foong LEUNG SHIN CHEUNG be hereby re-elected as Director of the Company.”
7. To elect as Director, Mr. Bernard LE GOFF who had been appointed by the Board on 3rd November 2014 now retires in accordance with the Constitution of the Company and, being eligible, offers himself for election.
Ordinary Resolution V
“Resolved that Mr. Bernard LE GOFF be hereby elected as Director of the Company.”
8. To take note of the automatic reappointment of Messrs PricewaterhouseCoopers as auditors of the Company and to authorise the Board to fix their remuneration for the financial year ending 31 December 2015.
Ordinary Resolution VI
“Resolved that the Board of Directors of the Company be hereby authorized to fix the remuneration of Messrs PricewaterhouseCoopers, the auditors of the Company for the financial year ending 31 December 2015.”
By order of the Board
Executive Services Limited Per Christian Angseesing Secretary
Note: A member not being able to attend and vote at the meeting is entitled to appoint a proxy to attend and vote on his behalf. The proxy need not be a member. Proxy forms duly signed should reach the registered office of the Company at least FORTY-EIGHT hours before the holding of the meeting. Shell trademarks used under license