Annual Report 2011

Vivo Energy Mauritius Limited Cemetery Road Roche Bois

Tel: (+230) 206 1234 Fax: (+230) 240 1043 www.vivoenergy.com

Shell trademarks used under license ContentsNotes to the Financial Statements 1

Our Vision and Mission 3

Our Values 3

Chairman’s Message 4

Managing Director’s Report 5

Review of Operations 7 Aviation 7 Marine 7 Liquefied Petroleum Gas (LPG) 8 Retail 9 Commercial 10 Lubricants 11 Customer Service Centre 11 Product Supplies and Distribution 12 Human Resources 12 Health, Safety, Security and Environment 13

History of Vivo Energy in Mauritius 15 Directors’ Report 18 Secretary’s Report 21 Corporate Governance Report 22 Independent Auditor’s Report 45 Statement of Comprehensive Income 47 Statement of Financial Position 48 Statement of Changes in Equity 49 Statement of Cash Flows 50 Notes to the Financial Statements 51

Vivo Energy Mauritius Limited Annual Report 2011 2 Vision and Mission 3

Our Vision and Mission Vision

We make the difference through our people, a team of ­dedicated professionals, who value our customers, deliver on our promises and contribute to sustainable development.­

Mission

To safely market and distribute energy and petrochemical products while offering innovative value added services.

Our Values

Vivo Energy employees share a set of core values – honesty, integrity and respect for people. We also firmly believe in the fundamental importance of trust, openness, teamwork and professionalism, and pride in what we do.

Vivo Energy’s key principles are: • safety • entrepreneurial flair • ambition • dynamism • responsiveness • empowerment • social and ethical responsibility • environmental care

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 4 Chairman’s Message Managing Director’s Report 5

Chairman’s Message Managing Director’s Report

manner. Indeed, the challenge in 2011 was to keep the We have a good safety record as a result of our proactive focus to maintain the “Business as Usual” mindset, whilst the management of all risks. We have had three incident-free transformation was happening. years in a row. We have once again successfully delivered on our “Goal Zero” target as far as accidents and incidents I would like to congratulate and thank the staff of Vivo are concerned, causing no harm to people, assets and the Energy Mauritius Limited under the leadership of Mr Pawan environment. Juwaheer for the dedication and professionalism with which they have gone about their day to day business, never losing Our main achievement however remains the successful sight of the key business priorities, with an unrelenting focus transition from Shell Mauritius Limited to Vivo Energy on safety. I would like to thank the management for delivering Mauritius Limited in 2011. After more than a year of hard quality results. I also wish to thank the board of directors for work, we officially left the Shell Group on 01 December their guidance and direction towards Vivo Energy Mauritius 2011 to join Vivo Energy, made up of Vitol, Helios and Shell. Limited. At the root of this seamless transition remains our open communication to all our groups of stakeholders. Aware I am happy and excited to join the Now it is the time for us all to move on, with a real sense 2011 has been an eventful as well as that there would be questions asked and uncertainties board, and I am honoured to become of optimism and excitement at the future. A future that successful year. felt, we proactively and regularly engaged our employees, the chairman. I look forward to working combines the strength of the Shell brand and products customers, the authorities, the wider business community with all so that together we continue Vivo for our consumers with the greater growth ambition and Sales volumes were 15% better than 2010 thanks mainly to and the public at large. Energy Mauritius Limited’s successful aspiration of our new majority shareholders. Aviation and Marine. On an equally satisfying note, operating journey. profits have improved across the various segments of the Indeed, the fact that 90% of our minority shareholders Looking ahead, we aim to remain the leader in safety, to Company. Distribution costs were up by 16%, in line with remained with the new company is a mark of confidence For year 2011, Vivo Energy Mauritius Limited recorded a continue to add value to the business of our customers the growth in sales volumes, as cost efficiency continues to and trust in this new entity, Vivo Energy Mauritius Limited will 30.2% growth in revenue from Rs 9,454 million in 2010 while delivering profitable growth and creating greater value remain a pillar inside the operating structure. Administrative certainly be retaining what used to constitute our strengths: to Rs 12,313 million. The company’s profit after tax was as for our shareholders. We will work to make Vivo Energy the expenses have been contained to within 7% increase its people, the Shell brand and our Shell products. Coupled good as in 2010, Rs 325 million in 2011. most respected energy business in Mauritius and in Africa, a compared to last year. with the new shareholders appetite to grow in Africa, we business where the best people want to work. now have a useful combination of aspirations that is set for 2011 has been a very challenging year, on one hand 2011 has been a year of expansion and growth. We have exciting time to come. We have ended 2011 at the dawn with the economic downturn and on the other with the I look forward to our making it happen with enthusiasm, extended our retail network by opening a new service of positioning Vivo Energy as the most respected energy transition from Shell Mauritius Limited to Vivo Energy commitment, creativity and with the ambition to win. I am station at Ebene. We have acquired a new barge, Tristar company in Mauritius and Africa. Mauritius Limited. After weeks and months of hard work, confident that we have the portfolio, people and capabilities Glory, to replace l’Ami Constant. I have full confidence that the transition occurred in the most seamless and successful required to make the most of the opportunities ahead. these two investments will individually provide the building On this note, I would like to thank our stakeholders for blocks as we pursue our journey for sustainable growth. bearing patience with us. I have full trust that they will

Honore Dainhi Chairman 18 April 2012

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 Review of 6 Chief Executive Officer’s Report Operations

For the past 70 years, Vivo Energy Mauritius Limited keep collaborating for the betterment of the company. In Honore Dainhi. Honore Dainhi holds the position of Chief Aviation (formerly Shell Mauritius Limited) has been actively ­engaged particular, I am grateful to our staff for their full support and Operating Officer of Vivo Energy. He has successfully grown in the marine business and has operated a ­dedicated enthusiasm during the transition process. the business in a variety of roles and geographies. He brings The aviation business has shown a good recovery on bunkering depot in the heart of Port Louis. The State added value with his wealth of experience, new outlook and ­profitability in 2011 compared to 2010. The general­aviation Trading Corporation (STC) exclusively imports ­fuels within We hold responsible citizenship close to our hearts and vision. I look forward to having him aboard as we continue industry recovered in 2011 with more flights in Plaisance Vivo specifications for fuel oil and gas oil. Our ­customers have worked with the community in the fields of education, to grow the company. though very far away from its peak in 2008. The ­industry can obtain a certificate of quality upon request after sports, civic responsibility and environment. We worked Finally, a special word of thanks to the board of directors for still faces many challenges and the sustained rise in fuel costs recertification in an approved laboratory. with local communities and the authorities on a national their continued support. is a constant issue to airlines. education campaign to sensitize the general public on safety Our aim at serving our customers with quality recertified precautions when using gas for domestic and automotive Having won a major share of the Air Mauritius tender late products, ensuring availability of products both marine purposes. We sponsored lifeskills training to vulnerable Pawan K Juwaheer 2010 contributed to an increase in volumes in 2011. Though gasoil, marine fuel oil and a range of marine lubricants, at an children in partnership with the NGO, Junior Achievement Managing Director there is a high level of competition in the ­aviation business optimum price, serviced either through the quays or through des Mascareignes. We supported the development of sports April 20, 2012 in Mauritius, resulting to very low margins, these volumes our barge, L’Ami Constant, whichever is more convenient to through our contribution to Club Maurice for the Indian helped us to decrease our unit costs and ­reversed the the customer has proved to be a winning formula. We have Ocean Islands Games. Our commitment to environment ­business financial trend. also seen a regain in activities at the port with more vessels protection remains high on our agenda. We continued with coming in for different purposes and at the same time, the our projects of embellishment of Roche Bois area and the The sales of Shell shares to Vivo Energy implied a change local marine business improved with more fishing vessels rehabilitation and development of the Rivulet Terre-Rouge in the strategy of the local aviation business. As from 1st calling at Port Louis and new players getting in the fishing Estuary Bird Sanctuary. Dec 2011, the company is no more trading under the activities around Mauritius. Shell ­Aviation Brand but under the Vitol Aviation brand. I encourage you to explore the highlights of our activities Vitol ­Aviation has been present in the Americas, North There has been a major change in the business model of and outcomes that contributed to the success of Vivo West Europe part of Africa and part of Asia and has quite the Marine business with the sales of Shell shares to Vivo Energy Mauritius in 2011. some years of presence and is operating and exceeding ­Energy. Traditionally, local customers place their ­orders JIG ­requirements. Vitol Aviation has been first new entrants ­directly with the company (formerly Shell ­Mauritius ­Limited) Last but not least, I’d like to thank the outgoing Board in airports of Paris and London in the past 25 years and while the internationally contracted ­customers place their Chairman, Mamadou Sene for his invaluable guidance and has aggressive plans in place to grow the aviation business orders through the Shell group ­marketing ­network of Shell steer provided during the last five years. I wish him luck in worldwide. Marine Products based in London, ­Singapore, Rotterdam, his future endeavours. Cape Town, Oslo, Tokyo, Hong Kong, South Korea and With Vitol Aviation backing Vivo Energy, we look forward to various other marine locations. This has changed whereby It is also with pleasure that I welcome our new Chairman, a promising year 2012. all customers now place their orders directly to Vivo Energy Mauritius Limited ­(formerly Shell Mauritius Limited). We are pleased to announce that ­despite this major shift in the way Marine of doing business, we have been able not only to maintain but to increase our customer portfolio. End ­users of our Our strategy in Marine has once more paid off in 2011. We international ­customer base are mainly tankers, containers, have made a record year in profitability while maintaining cruises, feeder vessels, fishing fleets and cargo vessels. good volumes.

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 8 Review of Operations Review of Operations 9

We presently offer quite a few advantages to our ­customers including use in the textile, hotel and food sectors. Overall Our effort to invest in this sector is aligned with the concept volume on the last quarter was slightly below 2010, giving for the safe supply of marine fuels and lubricants,­ namely: volume improved slightly last year mainly propelled by the of ‘Maurice, Ile Durable’. The Shell autogas network today some indications of an economic slowdown. Moreover, the growth in the domestic sector even if the LPG sector is comprises eight retail outlets namely: Lataniers (Port Louis), industry landscape has had also some major changes with • having an overall storage capacity of over 38,000 metric facing fierce competition from solar in both domestic and Roadway (Port Louis), Goodlands, Emeralda (West coast), a new entrant on the market, increased competition with tons, making Vivo Energy Mauritius Limited (formerly Shell the hotel sector for water heating purposes. Saint Jean (Belle Rose), Floreal, Pineview (La Vigie) and Bel Air. strong tactical promotions. Mauritius Limited) having the biggest storage ­capacity in the country; Shellgas has a wide distribution network which consists of As for retail, we were able to reach 99% of our targeted • supplier of a “recertified” marine fuel oil by an­independent some 900 resellers throughout the island. In addition, we volumes. The year was dense and rich in efforts and actions, and accredited international laboratory; provide a home delivery service in selected regions through Energy Storage Company Limited where attention was given to each of the pillars making the • having access to various quays A, D, E and Trou Fanfaron a network of resellers. As usual we also offer a variety of foundations of the business. fish quay; cylinder sizes for various applications: 12kg and 5kg for Energy Storage Company Limited (ESCOL) is a 50:50 joint • operating a barge in Port Louis delivering fuels and domestic purposes; 50kg for both domestic and industrial venture, with Vivo Energy Mauritius Limited and Total. The Starting with Health, Safety, Security and Environment ­lubricants to ships at all other quays including container applications and 12/15kg for forklift applications. company has a mounded storage capacity of 3,000 metric (HSSE), we continued training and raising competencies terminals and also at anchor outside of the harbour; tons split in 6x500 metric tons tanks built with best practice of forecourt staff, contractors and customers with the aim • owning a dedicated bunkering depot in Port Louis ­located Installation services for domestic hot water or industrial technology and which offers safe storage of LPG. The main of developing a safe attitude in the handling of petroleum adjacent to the main harbour; applications are provided through a number of ­professional purpose of ESCOL is to allow larger tankers to supply LPG products. We pursued “Talk not Tick” initiatives, engagement • using two private quays at Froid des Mascareignes contractors who are trained and certified by Shellgas. This to the country thus reducing unit freight cost. The contract sessions, sharing of best practices, in order to enhance their ­comprising five bunkering points; and ensures that all installations carried out by our contractors with STC for the handling, receipt and storage of LPG came knowledge and capabilities. We ran the campaign “Don’t • marketing a wide range of marine lubricants. are in conformity with international standards. In order to an end in December 2009 and has been renewed for a fool with fuel” on the whole network. This year again, we to sensitise the public for the need to comply with safety further five years. In order to adapt to changes in the port achieved goal zero (“zero incident, zero accident”). We remain fully engaged in implementing our bunkering requirements, a number of safety workshops and seminars area, a new pipeline was commissioned in February 2010 to strategy as Port Louis increases its traffic and expands as a were organised for both the resellers and end consumers. connect the new oil jetty with ESCOL. In relation with marketing activities, we organized the regional and strategic port. We are extending our pipeline “Shell Fuel Save Challenge” among drivers from both for bunkering along other quays 1 - 4 namely. The long going Shell autogas was introduced in 2001 as it offers a ­cheaper private companies and members of the public. Under the project of replacing L Ami Constant with a double hull barge alternative to motorists and brings in a number of ­benefits Retail supervision of SGS, the participants drove a 100-kilometre has finally materialized. As from January 2012, we will be using a to the environment because of cleaner emissions. Despite track across the island, representative of the local driving newly built barge, TriStar Glory, for our ­bunkering ­activities. This the fluctuating prices, autogas still remains competitive as Retail markets Shell products through its well distributed conditions (mix of urban and extra urban conditions). vessel is state of the art and ­provides all ­modern ­facilities for a compared to motor gasoline but it still high ­compared to network of 42 Shell service stations. Shell fuels are the They realized an outstanding performance in terms of fuel safe, efficient bunkering activity. As such, we are­providing L Ami fuel oil. There is a large gap in price between the ­subsidised sole differentiated fuels being offered to customers: Shell economy using Shell fuels and Shell economy driving tips. Constant, after 41 years of loyal service, a well deserved rest. domestic cylinders and autogas. This has ­resulted in a Unleaded Extra and Shell Diesel Extra with fuel economy The average savings against car manufacturers’ specifications Thank you L Ami Constant. number of motorists starting to decant subsidised LPG formula are designed to run extra kilometers, ensuring better were established at 35% using Shell Unleaded and Shell from cylinders into their cars using unsafe equipment. As efficiency and protection to engines, compared to ordinary Diesel Extra. a result of this illegal practice in 2011, autogas ­volume has fuels. We also offer Shell Autogas, Shell Lubricants and Shell Liquefied Petroleum Gas (LPG) declined in our stations. This practice is very ­dangerous and Gas. Shell Card is an easy-to-use, convenient and secured During our numerous road shows in different parts of after the issue had been addressed with the ­authorities, a payment card which ensures an efficient monitoring of fuel the island, we also took advantage of communicating the LPG is still, by far, a competitive source of energy for new legislation has come into force since1st February 2012 expenses. Our Select and Shell Shops offer convenience benefits of Shell fuel economy products and disseminating ­domestic applications as compared to electricity. It is also an about the use of 12kg cylinders exclusively for domestic retailing for quick purchases. safe and fuel economy driving tips. environmentally friendly product as well as a ­convenient and purposes. clean source of fuel for a number of ­industrial ­applications The retail industry registered a growth in 2011, but which was overall below 2010 and 2009. Noticeably, the industry

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 10 Review of Operations Review of Operations 11

With regards to operational excellence, we introduced Shell Card registered a good growth especially in the last Lubricants Customer Service Centre a new program “Mystery Motorist Program” whereby quarter when we achieved the best volume ever recorded, an independent mystery shopper rates the service level despite a tougher environment. Despite economic challenges, the Lubricants business The Customer Service Centre (CSC) was launched in 1997. delivered on our forecourts and in our shops. This program has exceeded its targets in terms of volumes and shown Since then, our CSC has gradually become key to the day-to- contributed in sustainably enhancing the service given to Overall, the 2011 retail financial excellent results in 2011. The business has maintained its day business activities of the company. our customers. Besides, we spent dedicated resources in the performance was beyond target. clear leadership in the automotive market helped by the training of our retailers, quality marshalls and forecourt staff. excellent growth in the automotive sector with Helix and Our CSC is a one-stop shop for our valued customers. 2012 prospects are surrounded by more uncertainty. Rimula remaining the preferred lubricants brand of vehicle Through a call centre, we provide basic services, namely order As for the network, we invested a total amount of MUR 60M Export-oriented industries are facing greater challenges owners. taking from both retail and commercial customers for fuels in the infrastructure. We opened our 42nd retail outlet, Shell with shrinking revenues due to Eurozone crisis. Many local and lubricants, complaints handling, invoicing and responding Ebène Service Station, located in the Cybercity area on Rose- businesses are having more difficulty in accessing funds to The transition to Vivo Energy was a real success and to queries on customer accounts. Hill along Réduit road. We also carried out brand upgrade sustain their development. GDP growth and inflation will be customers were extremely delighted that the Shell brand is works on the whole network. Upon works completion, key to the retail industry dynamics. remaining in the local market. Over the years, we upgraded and extended our services to Shell Brands International rated the overall network with a include debtor follow up, maintenance calls management, score of 97%, the best rating in Africa. Extension works and Whichever the scenario is, the foundations are in place for The continued efforts of the whole sales team now fully lubricants and LPG milk-run delivery scheduling and planning canopy installation initiated on other sites in end 2011 will be retail and the team will show the same dedication to grow structured around the essential Sales First tools, on the field and telesales/telemarketing support to other businesses. completed during the first semester 2012. the business beyond plan. as well as in the office led to some key customer acquisitions while many customers renewed their trust in Vivo Energy as Our CSC receives about 80,000 calls a year. These are handled their lubricants supplier. Moreover, the numerous targeted by our trained agents who have been empowered to act marketing initiatives were also key to the excellent 2011 as business and service focal points for HSSE, Commercial, results. Lubricants, LPG, Aviation and Marine. Commercial The Lubricants team maintained the focus on the Health, CSC Mauritius has been scoring more than 99% in the customer Safety Performance Enhanced Partnership with our Valued Safety, Security and Environment (HSSE) aspect and once satisfaction index surveys since 2008 and is maintaining this HSSE continues to be the number one priority for the Customers more, no incident was reported and the target of “zero high score. Furthermore, we are the only operating unit in F&B business and our licence to operate. Our customers With the restructuring of the F&B sales team, we continued incident” was achieved. On and above more customer HSSE Africa to deliver consistently on all our targets since 2007 and tremendously value our contribution to their business in to deliver value to our customer’s business as evidenced by trainings and lubricants site audits held, the team also shared ended the year once again ahead of all the African countries. terms of increasing their teams’ HSSE awareness. several testimonials signed by our major customers. Several HSSE “Hearts and Minds” tools with key distributors and customers have placed their trust in Vivo Energy again as resellers hence reaching a maximum of channel players. We face an ever-growing demand for services both internally Business Performance evidenced by major contracts that have been renewed this and externally. Our prime objective is to bring continuous 2011 was a difficult year for the F&B business, with limited year. Several customers also participated actively in initiatives, Shell Lubricants has been elected the clear improvement to our service to distinguish ourselves on the visibility on orders for the textile and manufacturing sectors. such as Customer Week. Our customers have continued to world leader for the fifth year in a row1. This market and satisfy our customers through service excellence. However, several of our customers have diversified their positively benefit from our range of differentiated fuels with further motivates the local Lubricants team activities towards new export markets hence resulting in demonstrated benefits. The transition to Vivo Energy was to face the 2012 challenges to maintain Shell Vivo Energy Mauritius Limited is the only petroleum company subdued growth. The business was also negatively impacted smooth with numerous face-to-face and group engagements lubricants as the market leader in transport operating such comprehensive customer service in the country. by the loss of a major Government transport tender. with our valued customers. and consumer lubricants sector. To that effect, we are continuously revisiting our processes and striving to maintain high performance through focus and emphasis on people development and staff motivation.

1 : Source: Kline & Company, Competitive Intelligence for the Global Lubricants Industry, 2008–2018.).

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 12 Review of Operations Review of Operations 13

Supplies at Fort William for the storage of fuel oil on behalf of the Resourcing An HSSE community has been built up, comprising staff holding Central Electricity Board, the second one in Rodrigues Island, During 2011, we welcomed seven newcomers in our HSSE critical positions, to motivate better our employees, Vivo Energy Mauritius Limited co-ordinates the replenishment and thirdly, a joint venture LPG storage, ESCOL, of 3,000 organisation. Two of them joined the Retail Department, two contractors, retailers and customers at large. Our motto is programme on behalf of the oil industry with the State metric tons capacity, in which Vivo Energy Mauritius Limited others joined the Distribution Department and the remaining “Together, we continue to make our company safer”. This Trading Corporation (STC) for both main products and LPG. owns 50% equity. three the B2B Department. The newcomers brought with them is what motivates us at Vivo Energy Mauritius Limited, to Some 66,000 metric tons of LPG and 897,000 metric tons a wealth of experience, skills and competences from different strive hard to make things happen. The HSSE community of main products were imported in 2011. LPG is received in Distribution to retail outlets, industrial customers and the fields, acquired either in Mauritius or abroad. has the full support of the Country Coordination Team who consignments of 2,000-3,000 metric tons from LPG tankers; airport is effected by a fleet of 11 bulk delivery vehicles for continuously demonstrates their leadership and commitment, white and black oils are received in 60,000 metric ton white oils and black oils. A fleet of 15 vehicles distributes Learning and Development thus enhancing HSSE culture and maintaining high standards of tankers, combining oil industry and Central Electricity Board LPG cylinders across the island to retailers, while bulk LPG During 2011, the average training days per employee was 3.5 HSSE performance. requirements, after the commissioning of the new oil jetty in is delivered through three specialised vehicles. Deliveries to days with learning programmes ranging from HSSE, customer November 2008 and the coming into operation of Red Eagle, marine customers are effected either through bunkering barge service, compliance, media training to name a few. the Mauritian owned oil tanker. or through pipelines at quays.

Vivo Energy Mauritius Limited purchases from STC in 2011 Replacement of the bunkering barge with a new double has Health, Safety, Security and Environment HSSE performance 2009-2011 amounted to 319,000 metric tons for main products and been completed in 2011. 32,000 metric tons for LPG, representing 35% and 48% of total 2009 2010 2011 trade respectively. Vivo Energy Mauritius Limited operates under a common set of Fatality zero zero zero Human Resources business principles, supported by policies and business controls. Total Recordable Cases zero zero zero The Shell group “SAFE” system for vetting tankers is These include a Health, Safety, Security and Environment (HSSE) Total Recordable systematically utilised to ensure suitability of all vessels before Talent Policy and Commitment, which require that our company shall Occupational Illness loading. Sub standards vessels are therefore avoided, thus Mauritian talents continue to be recognised by the region. As have a systematic approach to HSSE management. We have Frequency zero zero zero ensuring a better protection for Mauritian shores. at end December 2011, 11% of our total workforce i.e. 13 put in place a mandatory procedure for an HSSE Management Exposure Hours 700,000 600,000 571,000 out of 121 employees were holding regional positions from System (HSSE MS), which is a structured set of controls for Lost Time Injury zero zero zero Mauritius. In addition, two other Mauritians were in expatriate managing the business and to ensure and demonstrate that Distribution assignments in Madagascar and South Africa; of which Pramoth business objectives are met. This management system takes into Spills NIL NIL NIL Domun, our previous B2B Manager, who in 2011 went to account HSSE MS implementation requirements, incorporated Kilometres driven 2, 321,000 2,100, 000 1, 997,000 Vivo Energy Mauritius Limited owns and operates two depots, Madagascar as Managing Director. in the business level HSSE MS as well as the various classes namely Roche Bois and Causeway. Roche Bois is mainly used of business HSSE MSs relevant to our operations. Classes of for the storage of white oils and includes an LPG depot with a Change Management business are distribution, aviation, marine, business-to-business, semiautomatic cylinder filling plant, as well as packed lubricants In order to assist our people embrace the transition to Vivo LPG and retail. The elements of this management system are Safety day stores. Causeway depot is essentially for the storage and Energy, ‘Managing Change’ sessions were held for all the organised according to the Vivo Energy guidance of how to Safety day was celebrated on 12 June 2011 with the participation distribution of fuel oil to both marine and industrial customers. employees. The sessions helped our people to effectively integrate HSSE into the business and manage HSSE matters as of both employees and contractors. The objectives of the day These two depots constitute a storage capacity of 23,000 manage the emotions linked to the change and helped them any other critical activity. In line with our HSSE policy to achieve were spelt out, namely re-commitment to ‘Do the Right Thing - metric tons for white oils, 16,000 metric tons for black oils and articulate the benefits of the change. As such, despite the continuous performance improvement, the individual classes of Today and Everyday’, to make it personal and to improve focus 1,200 metric tons for LPG, representing 32%, 54% and 20% uncertainty linked to the transition, our people remained business action plans have been well observed and completed. on HSSE during the year, understand what makes a good and respectively of total oil industry storage capacity in Mauritius. committed, focused and dedicated. Besides these two depots, Vivo Energy Mauritius Limited operates three other depots on behalf of the oil industry, one

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 6. History of Vivo 14 Review of Operations Energy in Mauritius

bad driver, how to be a good passenger and pedestrian, adopt Global Environmental Standards The Shell Company of East Africa Limited started its marketing On 30 November 2011, Vitol, Helios and Shell finalised the good practices and reduce the number of road and workplace We all strive to have an environmental performance we can operations in Mauritius in 1905 through its managing agents, acquisition of the majority shareholding in Shell’s downstream accidents and most importantly making things happen on be proud of. We have in place a system for reporting and Blyth Brothers and Company Limited. As such, Shell was the business in Mauritius as well as six other countries: Cape Verde, the ground through toolbox talks. Staff and contractors were investigating environmental incidents and we have completed first international oil company to set up business on the island Madagascar, Mali, Morocco, Senegal and Tunisia. This marked the requested to gear their toolbox talk presentations on the safety a risk-based assessment of our sites and all actions have been and its close partnership with Blyth has been the cornerstone beginning of Vivo Energy Mauritius Limited. issues encountering at the moment or that issues they are closed. of a successful development. Most of the sites of current anticipating in upcoming jobs. service stations, depot and customer portfolio were acquired During its 107-year presence in Mauritius, Vivo Energy has built Competence assessment during this time. up a comprehensive business network in the energy scene, The session ended with staff and contractors HSSE recognition People are one of the key barriers we have in place to mitigate backed up by strong infrastructural investments, good technical and close out by the Managing Director. Follow up after safety risks. We want to assure ourselves that the people barriers are As part of a regional corporate reorganisation in the late know-how and professionalism. Vivo Energy Mauritius Limited day is paramount. We need to find time to reflect on how robust and competent to do this important job. We want to 1950s, the Shell Company of East Africa was replaced by the accounts for nearly half of the imported energy demand of the everyone will ensure they are doing the right thing. This will be able to provide assurance that: Shell Company of the Islands Limited, a branch of a company island and is present in all sectors of this business activity. definitely help to make our journey to goal zero a reality. incorporated in the United Kingdom. After the irreversible • An employee is competent for the job or task they are turmoil on the international oil scene in the early 1970s and Vivo Energy Mauritius Limited is a leader in the provision of both Goal zero initiative performing recognising the need for oil companies to have their own automotive fuels and lubricants to the Mauritian downstream Safety is a deeply held value, integral to our values of honesty, • We know they are competent through testing and recorded identity and direct dialogue with Government, Shell and Ireland market through its extensive network of service stations, integrity and respect for people. It means relentlessly pursuing outcomes Blyth Limited, who was then the oldest Shell agents in the business-to-business commercial clients and aviation fuel at no harm to people and no significant incidents. Goal zero shifts • The tests we use are valid, reliable, and recognized by world, negotiated the terms of the agency agreement. In 1976, Plaisance airport. It supplies both national and international the way we think and act. We firmly believe that goal zero is regulators, stakeholders, and other external parties therefore, Shell took over its own business management in shipping with bunker fuels and lubricants at Port Louis and the possible. Mauritius, directly promoting its activities, engaging its own staff surrounding area. Our predominant focus is on proficiency level “skill”. and opening its own offices. Life-saving rules Vivo Energy Mauritius Limited is a large supplier of Liquefied Far too many people still get hurt while working for Vivo HSSE Culture Ladder As a result of a decision made by the Shell and BP groups to Petroleum Gas (LPG) in the country, which is used for both Energy. This is not acceptable and we must never make it seem Taking on board initiatives started during previous years and deconsolidate their joint business interests in Africa in 1982, domestic cooking purposes and commercial uses. In order an inevitable consequence of working in dangerous industry. with the commitment of all staff and contractors, Vivo Energy BP Ocean Islands Limited’s activities in Mauritius were taken to ensure continuity of supplies of this essential product for By introducing the twelve life-saving consistent set of rules to Mauritius Limited has reached the proactive level on the HSSE over by Shell to become Shell Ocean Islands Limited. Both The the country and also to have tonnage available for export to our staff, retailers and contractors, we believe that things will culture ladder. Shell Company of the Islands Limited and Shell Ocean Islands other countries of the region, Vivo Energy Mauritius Limited be done differently by instilling the compliance culture. Twelve Limited were given the status of a Public Limited Company (plc) has effected a substantial investment in 3,000 metric tons of high-risk operations at work have been identified and the aim as a result of a change in British Company Law. On January storage capacity at Roche Bois through its joint venture, Energy is to prevent harm to people. Each reported non-compliance 1st 1991, the businesses of the local branch of both The Shell Storage Company Limited. is now investigated and failure to comply results in discipline Company of the Islands plc and Shell Ocean Islands plc were and up to termination of employment or discharge in case of transferred to a locally incorporated company, Shell Mauritius contractors. Supervisors are held accountable to communicate Limited, in exchange for shares in the latter. This change in and ensure compliance. Employees and contractors comply corporate structure underlines Shell’s confidence in the future because it is the right thing to do and it saves lives. We must of Mauritius and the current shareholders’ desire to further adopt the principle of zero tolerance for non-compliance. If consolidate Shell’s association with the island. In addition, the anyone intentionally breaks any of our life-saving rules, that newly incorporated company was floated on the Mauritian person chooses not to work for Vivo Energy. Stock Exchange and the Mauritian public currently owns 25% of its shares.

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 16 Notes to the Financial Statements

Financial Statements

Shell Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 18 Directors’ Report Directors’ Report 19

DIRECTORS’ REPORT (CONTINUED)

DIRECTORS’ REPORT STATEMENT OF DIRECTORS’ DIRECTORS RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS The directors present their annual report and the audited The directors of the Company since 01 January 2011 and at financial statements of Vivo Energy Mauritius Limited (formerly the date of this report are: Shell Mauritius Limited) (the “Company”) for the year ended Company law requires the directors to prepare financial 31 December 2011. statements for each financial year which present fairly the Mr Mamadou Sene (resigned on 15 December 2011) financial position, financial performance and cash flows of the Mr Pawan K Juwaheer PRINCIPAL ACTIVITIES Company. In preparing those financial statements, the directors Mr Patrick Crighton are required to: Mr Roger K F Leung Shin Cheung The Company’s principal activity is the marketing and Mr Antoine Delaporte distribution of petroleum products. Its joint venture, Energy • select suitable accounting policies and then apply them Mr G Honore Dainhi (appointed on 29 February 2012) Storage Company Limited, is involved in the provision of LPG consistently; terminal usage facilities. • make judgements and estimates that are reasonable and prudent; CONTRACTS OF SIGNIFICANCE CHANGE OF NAME • state whether International Financial Reporting Standards have been followed, subject to any material departures Until 30 November 2011, the only contracts of significance During the year, the Company changed its name from Shell disclosed and explained in the financial statements; and between the Company and its related partners were: Mauritius Limited to Vivo Energy Mauritius Limited. • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will (a) a Cost Contribution Agreement for Business Support continue in business. Services and Research and Development and Technical RESULTS AND DIVIDENDS The Company declared and paid the Support Services, and following dividends during the year: The directors confirm that they have complied with the above (b) a Management Advisory Services Agreement, The Company’s profit for the year is Rs 324,860,000 requirements in preparing the financial statements. (2010 - Rs 324,923,000). Dividend per share both with Shell International Petroleum Company, a subsidiary 2011 2010 The directors are responsible for keeping proper accounting of the ultimate parent. The financial statements of the Company for the year ended 31 Rs Rs records which disclose with reasonable accuracy at any time December 2011 are set out on pages 47 to 88. The auditor’s Declared on: the financial position of the Company and to enable them With effect from 01 December, the company entered into the report on these financial statements is on pages 45 and 46. 25 March 2011 6.10 5.00 to ensure that the financial statements comply with the following contracts with related parties: 22 November 2011 5.00 5.00 Mauritian Companies Act 2001. They are also responsible for (a) licence agreement for the branding of retail automotive 11.10 10.00 safeguarding the assets of the Company and hence for taking fuel sites and other assets with Shell Brands International reasonable steps for the prevention and detection of fraud and AG; and other irregularities. (b) contract for the provision of services with Africa For the year ended 31 December 2011, the Company Downstream Oil Products (Proprietary) Limited. made a profit ofRs 11.08 (2010 – Rs 11.08) per share and declared a total dividend of Rs 5.00 (2010 - Rs 5.00) per share of which Rs Nil (2010 - Nil) was paid during the year.

Subsequent to the year end, the company has through a board resolution dated 26 March 2012 declared a final divi- dend of Rs 6.10 ( 2010:Rs 6.10) per share.

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DIRECTORS’ REPORT (CONTINUED)

MAJOR SHAREHOLDER AUDITOR SECRETARY’S REPORT TO THE MEMBERS OF In February 2012, Vivo Energy Mauritius Holdings BV VIVO ENERGY MAURITIUS LIMITED (Netherlands) bought 631,627 shares from minority The fees charged by the auditor, PricewaterhouseCoopers, for UNDER SECTION 166(D) OF THE COMPANIES ACT 2001 shareholders and as a result, holds 22,623,316 shares (77.15%) audit and other services were: at the end of February 2012. 2011 2010 We certify that we have filed with the Registrar of Companies all such returns as are required of SEGMENTAL ANALYSIS Rs’000 Rs’000 the Company under the Companies Act 2001. A business segment analysis of sales and results is given in Note 5 to the financial statements. Statutory audit 1,746 2,008 Audit related services 630 600 SERVICE CONTRACTS Messrs Patrick Crighton and Pawan K Juwaheer have service Executive Services Limited contracts without an expiry date. PricewaterhouseCoopers has indicated its willingness to As per Christian Angseesing ACIS continue in office and will be automatically reappointed at the CORPORATE SECRETARY 26 March 2012 Service contracts of other directors are terminable with a 3 Annual Meeting. months’ notice period by either party. Approved by the Board of directors on 26 March 2012 DIRECTORS’ INTERESTS and signed on its behalf by: The directors have no interests in the ordinary share capital of the Company, either directly or indirectly. } } THREE YEAR SUMMARY } DIRECTORS A three year financial summary is set out in Note 29 to the } financial statements.

DONATIONS During the year, the Company made donations of Rs 69,370 (2010 - Rs 106,350).

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 Corporate Governance Report Corporate Governance Report 23 CORPORATE GOVERNANCE REPORT (CONTINUED)

MAURITIUS CODE OF CORPORATE BOARD OF DIRECTORS Profile of directors ­GOVERNANCE COMPLIANCE The Board of directors of Vivo Energy Mauritius Limited OUTGOING CHARIMAN INCOMING CHARIMAN The disclosures contained in this report are intended to (formerly Shell Mauritius Limited) remains stringent when provide the reader with a description of Vivo Energy it comes to upholding the highest standards of integrity Mauritius Limited (formerly Shell Mauritius Limited) and transparency in their governance of the company. corporate governance policies and practices. The directors The importance and the value of a balanced interplay firmly believe in and support high standards of corporate between directors, management and shareholders within governance, which are critical to our business integrity. the company has long been a major principle governing the conduct of Vivo Energy Mauritius Limited (formerly Shell The Board confirms compliance to the Mauritius Code of Mauritius Limited). Corporate Governance. A Board of directors consisting of five directors manages HOLDING STRUCTURE Vivo Energy Mauritius Limited (formerly Shell Mauritius Mr Mamadou Sene, aged 48 Honore Dainhi, aged 45 Limited). Directors are appointed at the annual meeting of (resigned on 15 December 2011) (appointed on 29 February 2012) HV Shell Overseas shareholders. They hold office until they retire or submit Chairman and Non-Executive Director Chairman and Non-Executive Director Investments BV Investment BV their resignation, unless removed earlier from office by the (Netherlands) (Netherlands) annual meeting of shareholders. Mamadou Sene joined Shell in 1993 in Senegal from Honore Dainhi joined Shell in Cote D’Ivoire 1996 as Retail 80% 20% Ernst and Young. During the last 17 years, he has held Sales & Operations Manager. In 1998, he was promoted to The board delegates the day-to-day running of the company various positions in operating units and central offices. He Retail Manager. Between 2000 and 2001, he was appointed to the Managing Director. The board delegates operational worked in Finance in Senegal then in Mali before taking Audit Manager for Global LPG based in London. For part Vivo Energy Holding BV issues to the management team and is directly accountable the responsibility of Commercial Manager and Country of 2002, he was Retail Business Advisor for the South Zone/ (Netherlands) to the shareholders for the performance of the company. Chair in Mali. Thereafter, he moved to London to join the Africa Retail Core Team. Between 2002 and 2004, he took 100% Oil Products Finance Planning and Business Performance the job of Regional Retail Manager for West & Central During the year ended December 31, 2011, ten board department in Shell Centre. Before taking his current role Africa covering 600 retail stations & 110 staff spread in meetings were held. of Sales and Operations Vice President South East Africa 13 countries. In 2004, he moved to The Hague where he Oil Products, he was leading the Planning and Business took the job of Senior ID Adviser for Sub-Saharan Africa. In Vivo Energy Local The offices of Chairman and Managing Director were Performance department for Shell Oil Products Africa. 2006, he was appointed Regional Vice-President for West Mauritius Shareholders separated on November 17, 2003 in order to align Africa where his main responsibilities were to oversee Holding BV board governance with the Mauritius Code of Corporate SOPAF business in 8 countries across West Africa and (Netherlands) Governance. A Non-executive Director occupies the Office provide strategic/tactical direction to the various operating 75% 25% of Chairman and an Executive Director occupies the office companies. Since December 2011, he was appointed Chief of Chief Executive. The Chairman and Managing Director Operating Officer of vivo Energy. ensure that the members of the board receive accurate, Vivo Energy timely and clear information. Mr Dainhi holds an Engineering degree in electronics from Mauritius Ltd Ecole Nationale Supérieure d’Electronique et de Radio- électricité’ (ENSERB): engineering school in Bordeaux In February 2012, Vivo Energy Mauritius Holdings BV bought (France). In 1990, he completed a post-graduate degree 631,627 shares from minority shareholders and as a result, in international business management (specialisation in holds 22,623,316 shares (77.15%) at the end of February 2012. marketing/sales management) - ‘Ecole des Hautes Etudes Commerciales’ (EDHEC): business school in Lille (France)

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Mr Juwaheer studied mechanical engineering at the University of Manchester Institute of Science and Technology, UK. Joining the company in 1986, he has Antoine Delaporte was appointed a director of Vivo Energy occupied different positions across the business. He worked as Lubricants Sales Mauritius Limited (formerly Shell Mauritius Limited) on June Technical Assistant, Consumer Sales Representative, Retail Planner and Supervisor 30, 2006. He is the founder and Managing Director of I&P and Retail Sales Manager in Mauritius. He acquired experience working overseas as Management Limited, a private company managing private Retail Visual Identity focal point and Retail Engineering Manager for Shell in Tunisia equity funds in Africa. Since 2000, he is also Chairman of and later as East Africa Retail Network Manager and Regional Retail Manager for the boards of Karina International Limited and of Karina SA Shell East Africa based in Nairobi. in Madagascar. Before that, Antoine was an entrepreneur in Madagascar and he had been a manager at Bain & Co, a Mr Pawan K Juwaheer, aged 48 Mr Juwaheer was appointed Managing Director of Vivo Energy Mauritius Limited leading strategic Consulting firm. Graduated of the ESCP- Managing Director and Vice-President (formerly Shell Mauritius Limited) in July 2006 and has since been a member of the Mr Antoine Delaporte, aged 51 Paris business school, he holds an MBA from INSEAD, Indian Ocean Islands board. He is a Director on Energy Storage Company Limited and State Informatics Independent and Non-Executive Director France. He is a member of the boards of Ciel Textile and Limited boards and a former Chairperson of the Mauritius Chamber of Commerce CEAL. He is also Chairman of the Boards of Newpack SA in and Industry. Since March 2012, he is also a member of the Local Advisory Board Madagascar, Grand Hotel du Louvre SA in Madagascar and of Barclays Bank. of C.B.E. Ngazidja in Comoro Islands.

Fellow of the Association of Chartered Certified Accountants, Mr Crighton joined Vivo Energy Mauritius Limited (formerly Shell Mauritius Limited) in January 1987 as Management Accountant. Thereafter, from 1989 to 1993, he occupied the position of Legal and Tax Accountant before taking over the position of Treasury Directors’ emoluments and Corporate Accountant up to 1995. He was then appointed Credit Manager and in 1997 became a member of the JD Edwards team before being the Corporate 2011 2010 Accountant. In 2001, Mr Crighton was appointed Finance Manager. Mr Crighton 0 – Rs 200,000 2 2 is also the holder of a Masters in Business Administration from Napier University. Between Rs 200,000 to Rs 1 m 1 1 Mr Patrick Crighton, aged 52 On January 18, 2005, he was appointed a director of Shell Mauritius Limited (now Between Rs 1 m to Rs 3 m 0 0 Executive Director and Finance Manager Vivo Energy Mauritius Limited) and since October 29, 2009, he is also a Director of Above Rs 3 m 2 2 Societe Malgache des Petroles Vivo Energy (formerly Societe Malgache des Petroles Shell). During the year ended 31 December 2011, executive directors received an aggregate amount of Rs 15,065,891 Associate of the Chartered Institute of bankers in UK and a fellow member of the (2010 - Rs 9,969,097) as remuneration and benefits from Mauritius Institute of Directors, Mr Leung has been appointed a director of Vivo the Company. The non-executive directors received an Energy Mauritius Limited (formerly Shell Mauritius Limited) on June 30, 2006. He aggregate amount of Rs 759,751 (2010 - Rs 402,800) as retired from Barclays Bank in September 2005 as Regional Corporate Director. He remuneration and benefits from the Company during the has been trustee of the Barclays Employees Pension Fund and a director of the same period. Out of the Rs. 15,065,891, Rs. 1,052,609 has Barclays Leasing Company (Mauritius) Limited. Mr Leung is now a director of MDIT, been claimed to Shell International. IPRO Fund Ltd and Bank One Limited. He presently works as Consultant in business Mr Roger Leung (aged 65) restructuring and performance optimisation. Independent and Non-Executive Director

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Profile of management team Holder of a Bachelor Tech in Civil Engineering from the Indian Institute of Technology, Bombay and a Master of Science in e-Business from the University of Mauritius, Abhinesh Dussain joined Vivo Energy Mauritius Limited (formerly Shell Mauritius Limited) in 2002 as Lubricants Sales The Vivo Energy Mauritius Limited (formerly Shell Mauritius Limited) management team is responsible Engineer. In 2004, he was appointed Lubricants Business Manager. He managed the Lubricants for supervising the general course of business of the company and advises the Board of directors. business for three years and in March 2007, he took over the Commercial Business as Fuels and Bitumen Sales Manager. Beginning of 2009, Abhinesh was sent to Shell Botswana as Business- The team comprises the Managing Director, Mr Pawan K Juwaheer, the Finance Manager, Mr Patrick to-Business Manager for an assignment and, after its completion, returned to Mauritius at the Crighton, and the following managers: end of 2009. Following short term assignment, in 2010, Mr Dussain took over the B2B role and Mr Abhinesh Dussain as well as the Marine and Aviation Manager for major part of the year. He was then appointed Marine and Aviation Manager full time Marine and Aviation Manager in 2011.

Appointed Distribution Manager in August 2005, Maurice Lionnet joined Vivo Energy Mauritius Limited, formerly Shell Mauritius Limited, in 1976. Mr Lionnet has held various senior positions both locally and overseas in Supply & Distribution (Aviation, Terminal/Depot and Supplies), Marketing (Retail, Commercial and LPG); At Shell Djibouti - Operations Manager from 1984 to 1986; At Shell Mauritius Limited - Retail and Commercial Manager, from 1986 to 1990, Holder of a postgraduate degree in Commerce, Management and Finance from Ecole then Supplies and Installation Manager, from 1990 to 1997 and subsequently, Team Leader for Supérieure de Commerce de Pau, France, Mr Hufouye joined Vivo Energy Mauritius Limited the implementation of JD Edwards Logistics from 1997 to 1999; Marketing Manager for the (formerly Shell Mauritius Limited) as Retail Manager in October 2008. Before that, he has been launch and setting up of the newly formed Shell Madagascar (SMPS) from 1999 to 2002; LPG Project and Development Manager, Export Manager and Project Team Leader. Mr Hufouye Manager for Vivo Energy Mauritius Limited (formerly Shell Mauritius Limited) from 2002 to has strong experience in Project and Operations Management, ranging from business process Mr Maurice Lionnet 2006. review to electronic payment systems development and implementation, both in Mauritius and Distribution Manager in the African region. Maurice Lionnet is also Managing Director for ESCOL (Energy Storage Company Limited), Mr Eric Hufouye an associate company of Vivo Energy Mauritius Limited (formerly Shell Mauritius Limited). He Retail Manager holds a Masters Degree in Business Administration from the University of Surrey, UK, and is a Member of the Society of Petroleum Engineers.

Mr Rajanah Dhaliah is holder of a degree in Mechanical Engineering and a Masters Degree Mrs Young joined Vivo Energy Mauritius Limited (formerly Shell Mauritius Limited) in 1990 in Business Administration from the University of Mauritius. He joined Vivo Energy Mauritius as Assistant to the Personnel and Services Manager. As from April 1999, she occupied the Limited (formerly Shell Mauritius Limited) in 1990 as Lubricants Sales Engineer. In 1995, position of Human Resources and Services Manager. In January 2005, Mrs Young was appointed he acted as head of the Business Process Improvement Project for the company. He was Cluster Human Resource Manager. appointed LPG coordinator for Shell Gas Mauritius business from 1996 to 2000. He then worked as Retail Manager for Mauritius from 2000 to 2004, and as such, formed part of the Before joining the company, she was a freelance consultant with Core Services Limited and Retail management team for East Africa. was involved in the job evaluation exercise for Air Mauritius. Mrs Young is a certified graduate After this, Mr Dhaliah became the Competence and Learning Manager for Africa and MECAS interviewer and assessor and a registered trainer in Human Resources Management. She holds (Middle East Central Asia South) for the Global Lubes Organisation until 2009. Mr Dhaliah Mrs Nancy Young a Masters degree in Psychology with specialisation in Industrial Psychology from the University then became the B2C Marketing Manager for Commercial businesses within Africa until 2011. Cluster Human Resource Manager of Bordeaux, France. Mr Rajanah Dhaliah He was appointed Business to Business Manager for Vivo Energy Mauritius Limited (formerly Business-to-Business Manager Shell Mauritius Limited) in July 2011.

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Board meetings Terms of Reference of Audit and Risk Committee (ARC)

The board meets on a regular basis and has a formal schedule Constitution The ARC committee will maintain effective working of matters reserved for it. This includes matters such as relationships with the board of directors, management, approval of the Annual Report, approval of interim dividends The ARC, established by the Board of the company, shall and the external and internal auditors. The duties and and recommendation of final dividends, approval of material consist of at least two but not exceeding three Non- responsibilities of a member of the audit committee are in contracts and nomination of candidates for board membership. executive Directors (NED). The Chairperson of the addition to those set out for a member of the board of The shareholders elect the board members each year at the committee shall be an independent NED (as defined by the directors. annual meeting. Each director is elected by a separate resolution Code of Corporate Governance of Mauritius). for a term of one year. The full list of matters reserved to the Meetings board for decision is available from the Company Secretary. Each member shall be financially literate. At least one member must have accounting or related financial expertise. Only committee members will attend meetings. A quorum of Attendance of board meetings in 2011 any meeting shall be two (2) members. The audit committee Members shall be appointed for two (2) years term of may invite such other persons (e.g. other directors, the In 2011, the attendance of the directors was as follows: notice so long as they remain a director of the company. General Manager, head of finance, head of internal audit and external audit senior partner) to its meetings, as it deems Audit committee members shall not serve simultaneously necessary. Feb 17 Mar 25 May 13 Aug 11 Oct 13 Nov 11 Nov 22 Nov 30 Dec 02 Dec 16 on the audit committee of companies in the same field as 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 the present company and of more than two other public The external and internal auditors shall be invited to make companies without the approval of the full board. presentations to the audit committee as appropriate. At Chairman least once a year, the committee shall meet with the head Mr Mamadou Sene X X X X X X Objectives of internal audit and senior partner of the external auditors without the presence of executive management to discuss Managing Director The audit committee shall assist the board in monitoring and any matters that either the committee or these two parties Mr Pawan Kumar Juwaheer X X X X X X X X X X overseeing its financial responsibilities. Its main objectives believe should be discussed privately. (Chairperson) (Chairperson) (Chairperson) (Chairperson) (Chairperson) shall be to: The committee shall meet as often as it determines necessary Directors • oversee the integrity of the financial reporting process and or appropriate but not less frequently than quarterly. Mr Patrick Crighton X X X X X X X X X X ensure the transparency and performance of published Mr Antoine Delaporte X X X X X X X X X financial information. The committee chairman shall convene a meeting upon Mr Roger Leung X X X X X X X X X X • review the effectiveness and performance of the request of any committee member who considers it company’s internal financial control and risk management necessary. system. • evaluate the work of the internal audit function and of the The secretary of the audit committee shall be the company Board committees external auditors. secretary, or such other person as nominated by the board. • review the company’s process compliance with legal and The Board has three standing committees made up of Executive As from March 27, 2007 the Nomination and Remuneration regulatory requirements affecting financial reporting and, The secretary of the committee shall circulate the minutes, and Non-executive Directors to assist in the discharge of its committee forms part of the Corporate Governance if applicable, its code of business conduct. agenda, and background materials of meetings to the duties. The committees, which are set out below, meet regularly committee. under the terms of reference set by the board.

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Terms of Reference of Audit and Risk Committee (ARC) Terms of Reference of Audit and Risk Committee (ARC)

members of the committee and to the chairman of the • pre-approve all audit services fees and terms as well as Key responsibility in respect of internal control auditors based on the scope and results of their work and board at least a week before the meeting. review policies for the provision on non-audit services by make recommendations to the board of the appointment, the external auditors. The committee shall: reappointment or termination of the appointment of the The background material must include all such management • Discuss the internal controls, adhered to by the company’s external auditors, accounts, financial statements, internal and external audit The internal audit manager reports functionally to the management, financial, accounting and internal audit • Consider the independence and objectivity of the external reports and internal control evaluations that are available. chairman of the audit committee (and administratively to personnel, auditor. the General Manager). • Discuss with management the company’s major risk • Discuss and review the external auditors’ proposed The chairman of the committee or another member of exposures and the steps management has taken to audit scope, planning and approach in the light of the the committee shall attend the board meeting at which the Main responsibilities monitor and control such exposures, company’s circumstances and changes in regulatory and financial statements are approved. • Evaluate the overall effectiveness of the internal control other requirements; and The basic responsibility of the members of the audit and risk management frameworks and consider whether • Ensure that significant findings, accounting adjustments The committee should meet with in-house legal adviser on committee is to exercise their business judgment to act in recommendations made by the internal and external and recommendations noted by the external auditors a regular basis (if one is appointed). Meetings with outside what they reasonably believe to be in the best interests of the auditors have been implemented by management, and management’s proposed response are discussed and legal adviser should be held if it is deemed necessary. company and its shareholders. In discharging that obligation • Ensure that significant findings and recommendations appropriately acted on. members should be entitled to rely on the honesty and noted by the internal auditors and management’s Board authority integrity of the company senior executives and its outside proposed response are discussed and appropriately acted Responsibility in respect of compliance with laws advisors and auditors, to the fullest extent permitted by law. on; and and regulations The board authorises the audit committee, within the scope • Evaluate the internal control matrix of the company on of its responsibilities to: Key responsibility in respect of financial reporting a quarterly basis and obtain management comments on The committee shall: • Investigate any activity it deems appropriate, fluctuations in the score. • Review the effectiveness of the system for monitoring • Appoint independent advisers and professionals The committee shall: compliance with laws and regulations and the results (accountants, lawyers and so on) as it deems necessary to • Review the interim financial statements, annual financial Key responsibility in respect of internal audit of management’s investigation and follow-up (including carry out its duties, statements and preliminary announcements prior to their disciplinary action) of any fraudulent acts or non- • Instruct any officer or employee of the company to release, The committee shall: compliance, attend any meetings and provide pertinent information as • Meet with management internal auditors and the external • Ensure that the company has an appropriate internal • Oversee the company’s compliance with legal and necessary and appropriate, auditors to review the financial statements, the critical audit function, regulatory provisions, its articles of association, code of • Have unrestricted access to members of management, accounting policies and practices, and the results of their • Review the effectiveness of the internal audit function conduct, by-laws and any rules established by the board; employees and relevant information, audit, and ensure that it has appropriate standing within the and • Establish procedures for dealing with concern of • Ensure that significant adjustments, unadjusted differences, company; and • Conduct and authorise investigations into any matters employees regarding accounting, internal controls and disagreements with management and management letter • Evaluate the internal audit department and its impact on within the audit committee’s scope of responsibilities. auditing matters, are discussed with the external auditors; and the accounting practices internal controls and financial • Make recommendations to the board in relation to the • Review the other sections of the annual report before reporting of the company. Evaluating performance and reporting appointment, termination and remuneration of external its release and consider whether the information is responsibilities auditors and evaluate the work of the latter, understandable, consistent with members’ knowledge of Key responsibility in respect of external audit • Review the performance of the external auditors and the company and unbiased. The committee shall: exercise final approval on the appointment or discharge The committee shall: • Assess the achievement of the duties specified in the of the auditors; and • Review on an annual basis the performance of the external

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Terms of Reference of Audit and Risk Committee (ARC) Corporate Governance committee (Remuneration and Nomination committee)

charter annually and make regular report of their findings Mr Antoine Delaporte (Chairman) to the board, Mr Pawan K Juwaheer • Review and reassess the adequacy of its charter every Mr Roger Leung two (2) years and discuss any required changes with the board; and Mar 18, 2011 Nov 22, 2011 • Recommend approval of the annual report and accounts to the board. Chairman Mr Antoine Delaporte X X Directors Mr Pawan Kumar Juwaheer X X Terms of Reference of the Corporate Governance Committee Mr Roger Leung X X

The main attribution of the Corporate Governance • Ensure that the right balance of skills, expertise and committee is to provide guidance to the Board on aspects independence is maintained; of Corporate Governance and to recommend the adoption • Ensure that there is a clearly defined and transparent of policies and best practices as appropriate to the company. procedure for shareholders to recommend potential The Corporate Governance committee is also responsible candidates; Audit and Risk Management committee for remuneration and nomination matters within the • Ensure that potential candidates are free from material company. conflicts of interest and are not likely to simply act in the Mr Roger Leung (Chairman) interests of a major shareholder, substantial creditor or Mr Antoine Delaporte Terms of reference of the Nomination committee significant supplier of the company. This is of particular importance when a candidate has been nominated Mar 18, 2011 May 06, 2011 Aug 05, 2011 Nov 14, 2011 The Nomination Committee (if separately constituted) by virtue of a shareholders’ agreement, or other such or the Corporate Governance committee that has agreement. In any case, candidates so nominated cannot Chairman responsibility for board and senior executive nominations be considered independent (see Section 2, chapter 4, Mr Roger Leung X X X X should: clause 7). Director • Ensure that those directors who, in the opinion of Mr Antoine Delaporte X X X X • Ascertain whether potential new directors are fit and the board, have either acted in accordance with the proper and are not disqualified from being directors. instructions of a third party or have not discharged their Prior to their appointment, their backgrounds should be duties as directors to the satisfaction of the board, not be investigated thoroughly; nominated for re-election. • Ensure that the potential new director is fully cognisant of what is expected from a director, in general, and from him or her in particular;

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Directors in joint venture Objectives Standards Vivo Energy companies will operate performance, reward All reward and benefit programmes within any country Energy Storage Company Limited and benefit systems that: need to comply fully with appropriate laws and regulations, Statement of General Business Principles, country Codes Vivo Energy Mauritius Limited (formerly Shell Mauritius Limited) holds 50% of the shares of Energy Storage Company Limited. • Align employee and shareholder interests; of Conduct, and be market competitive. To determine the The Board directors of ESCOL and their attendance to the ESCOL board meeting in 2011 are as follows: • Support the attraction and retention of the best talent at latter, Vivo Energy has established: all levels who fit our business needs; • Assist mobility and avoid creating barriers to movement Our competitive reference May 17, 2011 Nov 08, 2011 within a business, country or Vivo Energy; To compare to representative employers in the industries • Recognise both common interests and individual and communities in which we do business or where we Chairman preferences; and compete for talent. Mr Bashirally A Currimjee X X • Are transparent and well explained Directors Our competitive objective Mr Mamadou Sene (Mr Pawan Kumar Juwaheer as alternate) X In addition to these shared objectives, the different elements To have pay and benefits that results in a strong market Mr Pawan Kumar Juwaheer X X of the total compensation package focus on different, position among the competitive reference group, which Mr Maurice Lionnet X X although complementary, goals. enables us to attract and retain the best talent at all levels Mr François Gauthier de Charnacé X X that fit our business needs. The pay element within the total Mr Jean Jacques Papee X X Performance and rewards mix is more important than benefits in our competitive • Differentiate on the basis of performance and value to positioning. the business; and • Encourage growth and development as individuals and Health, Safety, Security and Environment policies Vivo Energy HR performance, rewards and benefits philosophy team players. and practices Vivo Energy Mauritius Limited (formerly Shell Mauritius People in Vivo Energy are critical to the achievement of Performance and reward policies should help people excel, Benefits Limited) operates under a common set of business our business objectives. Vivo Energy compensation policies, foster affiliation with Vivo Energy, and encourage behaviour • Provide a standardised platform that allows other principles, supported by policies and business controls. These practices, and systems are intended to recognise and that leads to the achievement of business and personal elements of the reward strategy to differentiate on the include a Health, Safety, Security and Environment (HSSE) support: objectives. basis of performance; Commitment and Policy, which require that our company • Are cost effective and tax advantaged, where Vivo Energy shall have a systematic approach to HSSE management. We • Individual and business performance; both short and long Benefits that are provided or enabled by Vivo Energy purchasing power provides leverage over individual have put in place the Vivo Energy mandatory procedure term; companies are another important component of the purchasing power to provide for cost reduction and risk for an HSSE Management System (HSSE MS), which is a • Vivo Energy core values, business principles and people employee value proposition and support our attraction sharing; structured set of controls for managing the business and principles; and retention strategies. Benefits that are common foster • Support long-term social objectives for the communities to ensure and demonstrate that business objectives are • Business and people strategies; affiliation and community spirit and offer a foundation for within which we work; met. This management system takes into account HSSE MS • Our strong commitment to sustainable development; the total compensation package. • Recognise the legislative environments and competitive implementation requirements, incorporated in the business • Market competitiveness and the importance of internal markets within these environments; and level HSSE MS as well as the various classes of business relationships; and Our pay and benefits philosophy, objectives and standards • Support sharing of responsibility between the state, the HSSE MSs relevant to our operations. Classes of business • Different business and country economic, social, legal, and apply to Vivo Energy companies that employ people on employer and the employee. are distribution, marine, business-to-business, LPG and retail. regulatory environments. Vivo Energy terms and conditions and should be broadly The elements of this management system are organised communicated and understood by all.

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CORPORATE GOVERNANCE REPORT (CONTINUED) CORPORATE GOVERNANCE REPORT (CONTINUED)

according to Vivo Energy guidance of how to integrate Energy Mauritius Limited (formerly Shell Mauritius Limited) Charitable donations not absolute assurance of achieving business objectives. HSSE into the business and manage HSSE matters as any has acted in line with these requirements and to report In Vivo Energy, it is our firm belief that sustainable growth The approach to internal control includes a number of other critical activity. In line with our HSSE policy to achieve material exceptions. Action is taken to address areas of can only be achieved in partnership with the community general and specific risk management processes and policies. continuous performance improvement, the individual classes non-compliance. in which we operate. Hence the company has allocated Within the essential framework provided by the Statement of business action plans have been well observed and 2% of the prior year’s profit after tax to CSR initiatives. In of General Business Principles, the primary control completed. Code of Conduct addition to these numerous activities, donations are made mechanisms are self-appraisal processes in combination The Code of Conduct helps us to live by our business to charitable institutions. with strict accountability for results. These mechanisms are Policies and practice on ethics principles. As Shell Licensee, we fully abide by the Statement underpinned by established policies, standards and guidance of General Business Principles which provides the foundation During the year, the company made donations to three material that relate to particular types of risk; structured Our approach to business integrity for how Vivo Energy companies do business around the parties for a total of Rs. 69,370. investment decision processes, timely and effective reporting Our commitment to business integrity is clear and world. Many of these principles contain legal and ethical systems and performance appraisal. unequivocal; Vivo Energy Mauritius Limited (formerly Shell compliance requirements. The code is a single source of Political donations Mauritius Limited) insists on honesty, integrity and fairness information about what those compliance requirements Vivo Energy Mauritius Limited (formerly Shell Mauritius Examples of specific risk management mechanisms include: in all aspects of our business and expects the same in our mean, with guidance on when to use them, how to use Limited) has no mandate to participate in party politics, • regular review of significant risks by the management relationships with all those with whom we do business. them and how to be sure. although, as a major generator of economic wealth, the team; We do not bribe, nor do we accept bribes. We do not energy industry clearly has considerable social and political • a common health, safety, security and environment (HSSE) sanction illegal payments of any kind and investigate all Responsibility to employees impact. However, when dealing with government, Vivo policy, a common requirement for HSSE management suspicious circumstances. Serious action is taken against We provide employees with good and safe working Energy Mauritius Limited (formerly Shell Mauritius Limited) systems, and external certification of the environmental any employee found to have breached our firm ‘no bribes’ conditions, and competitive terms and conditions of has the right and responsibility to make its position known component of such systems for major installations; policy. Corruption can occur in all parts of the world and employment. on any matter, which affects the company, its employees, • a financial control handbook that establishes standards for at all levels. Our policy is that the direct or indirect offer, its customers, or its shareholders. Vivo Energy Mauritius the application of internal financial controls; payment, soliciting or acceptance of bribes in any form is Responsibility to customers Limited (formerly Shell Mauritius Limited) also has the • arrangements for the management of property, liability unacceptable. Facilitation payments are also bribes and We remain at the forefront of innovation, in consistently right to make its position known on matters affecting the and treasury risks; and should not be made. offering top quality products to our customers at very community, where the company has a contribution to make. • a business control incident reporting process that enables competitive prices. We do not make donations to political parties and treat monitoring and appropriate follow-up actions for incidents Declaration of conflict of interest this issue in the same way as bribery and corruption. We arising as a result of control breakdowns. Lessons learned Employees must avoid conflicts of interest between their Company’s policies and practices with regards report annually on the implementation of this policy of no from these incidents are used to improve the overall private activities and their part in the conduct of company to social issues political payments. control framework. business. They must also declare in writing to the company Vivo Energy companies aim to be good neighbours by potential conflicts of interest. All business transactions continuously improving the ways in which we contribute During the year, the company made no political donations. A formalised self-appraisal and assurance letter process on behalf of a Vivo Energy company must be reflected directly or indirectly to the general well-being of the is in place. Annually, the management of every business accurately and fairly in the accounts of the company in communities within which we work. Risk management and internal control unit provides assurance as to the adequacy of governance accordance with established procedures and are subject to arrangements, risk and internal control management, audit and disclosure. We report annually on any breaches We manage the social impacts of our business activities The approach to internal control is based on the underlying HSSE management, financial controls and reporting, of our ‘no bribes’ policy. carefully and work with others to enhance the benefits principle of line management’s accountability for risk and treasury management, brand management and information to local communities, and to mitigate any negative impacts control management. The risk and internal control policy management. The Managing Director also provides Our assurance letter process helps us to monitor whether from our activities. explicitly states that the company has a risk-based approach assurance regarding compliance with the Statement of we are living by our Principles, in accordance with both to internal control and that management is responsible General Business Principles and other important topics; external laws and regulations and with our internal standards. In addition, Vivo Energy companies take a constructive for implementing, operating and monitoring the system of as part of this process business integrity concerns or Each year, the Managing Director reports back to the Chief interest in societal matters, directly or indirectly related to internal control, which is designed to provide reasonable but instances of bribery or illegal payments are to be reported. Executive Officer of Vivo Energy, in writing, whether Vivo our business.

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 38 Corporate Governance Report Corporate Governance Report 39

CORPORATE GOVERNANCE REPORT (CONTINUED) CORPORATE GOVERNANCE REPORT (CONTINUED)

Assurance letter results including any material qualifications with The State Trading Corporation for the monitoring ISO 27001. As scheduled, the disaster recovery plans were exporting countries. Fluctuations in these prices could test are reviewed by Vivo Energy Audit Committee and support of all product imports. Whereas product demand for tested to ensure that there is minimum business disruption our business assumptions, and could have an adverse impact representations made to the external auditors. inland trade is fairly predictable, with transfer prices fixed in the event of a disaster. All new staff and contractors were on Vivo Energy Mauritius Limited (formerly Shell Mauritius monthly and regulated by the Automatic Pricing Mechanism, continually coached to complete the mandatory e-learning Limited) investment decisions, operational performance and In addition to these structured self-appraisals, the assurance international sales are not price controlled, very seasonal information security training module, the objective of financial position. framework relies upon objective appraisals by internal audit. and unpredictable. In this respect, efficient management the training being to enhance awareness, education and The results of internal audit’s risk-based reviews of operations of the product replenishment cycle, product availability behaviour against information security threats. Risk related to security breaches provide an independent view regarding the effectiveness of and freight are therefore of essence to ensure continuity A number of our staff and assets are exposed to the threats risk and control management systems. These established of service. The risk to the business is product shortage or Risk related to reputation of crime, social unrest and terrorist attacks. If these threats review; reporting and assurance processes enable Vivo stock out causing curtailment of sales, loss of revenue and Vivo Energy Mauritius Limited (formerly Shell Mauritius to our staff and assets materialise they could cause severe Energy to regularly consider the overall effectiveness of business. Limited) and the Vivo Energy companies value the disruption to our activities. the system of internal control and to perform a full annual perception of stakeholders as no company or business review of the system’s effectiveness. Taken together, these Risk related to Health, Safety, Security, operates in a vacuum. Our licence to operate and our very Risk related to operational hazards, natural processes and practices provide confirmation to Vivo Energy Environment (HSSE) existence rely on the understanding, goodwill and emotion disasters and pandemics holding companies that relevant policies are adopted and Vivo Energy Mauritius Limited (formerly Shell Mauritius of stakeholders. As such, Vivo Energy Mauritius Limited The activities of Vivo Energy Mauritius Limited (formerly procedures implemented with respect to risk and control Limited) operates under a common set of business principles, (formerly Shell Mauritius Limited) addresses the interests, Shell Mauritius Limited) place it at the risk of operational management. supported by policies and business controls. These include a concerns and perceptions of key stakeholders through hazards, natural disasters and pandemics, which could result Health, Safety, Security and Environment (HSSE) Policy and a variety of methods. Included are statements of our in loss of life, adverse impact on the environment and cause Risk related to credit Commitment, which require that our company shall have a commitments, policies and standards and human resource disruption to business activities. Realisation of these risks Credit risk is one of the company’s key risks. Vivo Energy has systematic approach to HSSE management. We have put roles of Communications and Managing Director. The role could have an adverse effect on the results of operations devised a set of rules that apply across the continent on that in place an HSSE Management System (HSSE MS), which of Managing Director, in particular, is specifically designed to and financial position of the company. subject. Items on which this policy place a lot of emphasis is a structured set of controls for managing the business protect the reputation of Vivo Energy companies operating include carrying out customer risk assessment before any and to ensure and demonstrate that business objectives are in a country with the support from Communications both Risk related to change in legislation and fiscal delivery is made to a customer and also at regular intervals, met. This management system takes into account HSSE MS locally and internationally. Statements of commitments, and regulatory policies setting of a credit limit by customer and using the Enterprise implementation requirements, incorporated in the business policies and standards adopted by Vivo Energy Mauritius The operations of Vivo Energy Mauritius Limited (formerly Resource Planning system to avoid trading outside to level HSSE MS as well as the various classes of business Limited (formerly Shell Mauritius Limited) include the Shell Mauritius Limited) are subject to risk of change in approved conditions. HSSE MSs relevant to our operations. Classes of business Shell General Business Principles, Code of Conduct, legislation, taxation and regulation, changes that could have are distribution, marine, aviation, business-to-business, LPG Commitment to Sustainable Development, Health, Safety an adverse effect on the results of operations and financial Risk related to foreign exchange and retail. The elements of this management system are and Environment Commitment and Policy, Diversity and position of the company. More than one third of the company’s business is carried organised according to Vivo Energy guidance of how to Inclusiveness Standard, Environmental Minimum Standards, out in foreign currency. The company’s risk mitigation policy integrate HSSE into the business and manage HSSE matters Environmental, Social and Health Impact Assessment, Risk related to effective governance with respect to foreign currency is to minimise exposure by as any other critical activity. In line with our HSSE policy Minimum Health Standards, Security Standards, HIV/AIDS Successful delivery of the Vivo Energy Mauritius Limited matching currencies whenever feasible and entering forward and commitment to achieve continuous performance Policy, Human Rights Standard, Road Transport Safety Policy, (formerly Shell Mauritius Limited) strategy requires contracts whenever possible and economically viable. improvement, the individual classes of business HSSE action Code of Ethics and adoption of the Mauritian Code of effective governance. There is a risk of incorrect design and plans have been well observed and completed. Corporate Governance. operation of internal control, which may result in damage to Risk related to supplies the company’s reputation, financial results and employees. Regularity of supplies is of vital importance to enable Vivo Risk related to information security Risk related to fluctuating oil prices Energy Mauritius Limited (formerly Shell Mauritius Limited) Vivo Energy Mauritius Limited (formerly Shell Mauritius Oil and oil products prices can vary as a result of various Risk related to partners and ventures to meet the needs of its customers; consequently Vivo Limited) has in place an Information Security programme factors, including natural disasters, political instability or There is a risk that Vivo Energy Mauritius Limited (formerly Energy has secured the position of Oil Industry coordinator that ensures it adheres to the Information security based on conflicts, economic conditions or action taken by major oil- Shell Mauritius Limited) could lose the ability to influence

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 Shareholder 40 Corporate Governance Report Information CORPORATE GOVERNANCE REPORT (CONTINUED)

and control the operations, behaviours and performance of business activities of other parties with whom the company Shareholder communications are determined by the Board of directors and are specified is engaged. This could result in damage to staff, assets and in the agenda included in the notice of convocation. A financial results. Special Meeting of Shareholders may be called by the Board The Board recognises the importance of two-way on written request of shareholders holding shares carrying Risk related to economic and financial market conditions communications with its shareholders and, in addition to together not less that 5% of the voting rights entitled to Vivo Energy Mauritius Limited (formerly Shell Mauritius giving a balanced report of results and progress at each vote on an issue. Limited) is subject to differing economic and financial market annual meeting, Vivo Energy Mauritius Limited (formerly conditions. There are risks from political and economic Shell Mauritius Limited) responds to questions and issues The resolutions of the Annual Meeting of Shareholders shall, instability. Realisation of one of these risks could have an raised by institutions and private shareholders. Information except in those cases where the law or the Constitution adverse impact on the results of operations and financial about Vivo Energy Mauritius Limited (formerly Shell prescribe a larger majority, be passed by absolute majority position of Vivo Energy Mauritius Limited (formerly Shell Mauritius Limited) is available on the website www. of the votes cast. At annual meetings, shareholders may cast Mauritius Limited). vivoenergy.com. In addition, shareholders’ questions can be one vote for each ordinary share held by them. asked via the telephone line (+230 206 1234) or fax line (+230 240 1043).

Vivo Energy Mauritius Limited share price v/s SEMTRI (Mur), January - December 2011

Annual Meeting of Shareholders 190 7400

The Annual Meeting of Shareholders of Vivo Energy 180 7100

Mauritius Limited (formerly Shell Mauritius Limited) is held 170 6800 once a year to discuss the report of the Board of directors, 160 6500 to approve the audited financial statements, to elect any 150 6200 new directors, to appoint the auditors and to authorise the 140 5900 130 5600 directors to fix their remuneration, to ratify the dividends 120 5300

declared by the Board of directors. 110 5000

100 4700 The Annual Meeting of Shareholders shall be called by the 13-Jul 04-Jan 27-Jan 21-Jun 24-Feb 21-Sep 13-Apr 21-Mar 13-Oct 04-Aug 26-Aug 06-May 30-May 01-Dec 23-Dec Board of directors. The items to be dealt with at the meeting 08-Nov

SEMTRI Vivo Energy Mauritius

Vivo Energy Mauritius Limited share price v/s SEMDEX (Mur), January - December 2011 Vivo Energy Mauritius Limited share price v/s SEM7 (Mur), January - December 2011

600

180 170 3000 550 170 2800 160 500 160 2600 150 450 2400 150 2200 140 400 140 2000 350 130 1800 130

300 120 120

250 13-Jul 04-Jan 27-Jan 21-Jun 25-Feb 21-Sep 14-Apr 22-Mar 13-Oct 04-Aug 26-Aug 06-May 30-May 01-Dec 23-Dec 08-Nov

SEMDEX Vivo Energy Mauritius 13-Jul 04-Jan 27-Jan 21-Jun 25-Feb 21-Sep 14-Apr 22-Mar 13-Oct 04-Aug 26-Aug 06-May 30-May 01-Dec 23-Dec 08-Nov

SEM7 Vivo Energy Mauritius

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 42 Corporate Governance Report Corporate Governance Report 43

SHAREHOLDER INFORMATION (CONTINUED) SHAREHOLDER INFORMATION (CONTINUED)

Share Ownership Shareholders’ diary

Number of shareholders Number of shares Number of shares owned % of total issued shares Financial Year End December 31, 2011

2,461 1 - 500 493,836 2% Reports and profits statement 580 501 - 1,000 535,044 2% Income Statement for the year ended 31 December 2011 Published March 31, 2012 552 1,001 - 5,000 1,397,672 5% Condensed Interim Income Statement for the quarter 120 5,001 -10,000 807,957 3% ended 31 March 2012 Published May 15, 2012 89 10,001 - 50,000 1,737,783 6% Condensed Interim Income Statement for the six months 3 50,001 - 100,000 298,880 1% ended 30 June 2012 Published August 14, 2012 10 100,001 - 250,000 1,473,990 5% Condensed Interim Income Statement for the nine months ended 2 250,001 - 500,000 585,401 2% 30 September 2012 Published November 15, 2012 - 500,001 - 1,000,000 - 0% Income Statement for the year ended 31 December 2012 Published March 31, 2013 (at latest) 1 Over 1,000,000 21,991,689 75% 3,818 29,322,252 Dividend Interim Dividend To be announced November 15, 2012 Largest Shareholders as at December 31, 2011 Interim Dividend Payable January 31, 2013 (at latest) Final Dividend To be announced March 31, 2013 (at latest) Shareholder’s name Number of shares held Final Dividend Payable July 31, 2013 (at latest)

VIVO ENERGY MAURITIUS HOLDINGS B.V. 21,991,689 GALVANISING CO LTD 308,402 Constitution Dividend Policy THE MCB LTD (A/C BARCLAYS MAURITIUS STAFF PENSION FUND) REF: CB/2704 276,999 LAMPOTANG & CO LTD 198,400 The company’s constitution is in conformity with the The Dividend Policy of Vivo Energy Mauritius Limited ALUMINIUM ENTERPRISES LTD 191,400 provisions of the Companies Act 2001 and those of the (formerly Shell Mauritius Limited) is to declare 100% of THE ANGLO-MAURITIUS ASSURANCE SOCIETY LIMITED 168,178 Listing Rules of the Stock Exchange of Mauritius. Net Income After Tax (NIAT) subject to sufficient funds STATE INSURANCE COMPANY OF MAURITIUS LTD 156,373 and solvency certificate. This policy will continue to be in SECTIONS ROLLING LIMITED 137,100 Its salient features are: place until revised by another subsequent Board Resolution. MR N J P MAURICE RAFFRAY 135,000 For the declaration and payment of dividends, the calendar THE MCB LTD (A/C THE SUGAR INDUSTRY PENSION FUND • There are restrictions on pre-emptive rights attached to published by Global Treasury shall be consulted. Intra-group BOARD II) REF : IM/113 133,323 the shares. dividend shall be declared via the Virtual Treasurer (Dividend • The company may acquire and own its shares. Reporter) website. By a Board Resolution, the company may • The company may not issue fractions shares. free up retained earnings by declaring additional dividends. Apart from Vivo Energy Mauritius Holdings B.V, no other shareholder owns more than 5% of the share capital of the company. • Shareholders may cast their votes by post. • The Board consists of not less than two (2) or more than The timing for remittance of dividend will be such that not Shares held by each director at December 31, 2011 eleven directors (11). more than 50% of the dividend declared will be paid in the The directors follow the principles of the model code on securities transactions by directors as detailed in Appendix 6 of the • There is rotation of directors every year except for the year of declaration while the remaining 50% will be paid Mauritius Stock Exchange rules. one who is elected as chairperson who retires every four in the following year provided that the company remains years. The directors have not held or traded in any shares of the company during the year.

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 44 Corporate Governance Report Independent Auditor’s Report 45

PricewaterhouseCoopers 18, Cybercity, Ebène, Republic of Mauritius Tel: (230) 404 5000 Facsimile: (230) 404 5088/89 within the Gearing Policy. The Board shall authorise by a Registered office www.pwc.com/mu Board Resolution acceleration of dividend remittance. Vivo Energy Mauritius Limited Insider dealing Cemetery Road Independent Auditor’s Report Vivo Energy believes it important in order to protect the Roche Bois reputation for honesty and integrity enjoyed by both Vivo PO Box 85, Port Louis To the Shareholders of Vivo Energy Mauritius Limited Energy and its employees that, where part of the share capital Website: www.vivoenergy.com (formerly Shell Mauritius Limited) of a Vivo Energy company is traded on a Stock Exchange, there should be no possibility of suspicion that an employee Report on the Financial Statements or contractor of the company or a person connected with By order of the Board We have audited the financial statements of Vivo Energy Mauritius Limited (formerly Shell Mauritius Limited) (the “Company”) that employee or contractor while dealing in the company’s on pages 47 to 88 which comprise the statement of financial position at 31 December 2011 and the statements of quoted shares has used confidential knowledge for either Executive Services Limited comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting his own benefit or that of another person. Between the Per Christian Angseesing policies and other explanatory notes. dates a period is closed and the results are published, a Secretary notice is sent to all staff asking them not to deal with shares Directors’ Responsibility for the Financial Statements during such periods. The Company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and in compliance with the requirements of the Mauritian Companies Act Related party transactions 2001, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error. Related party transactions are disclosed in note 28 of the financial statements. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in Non-audit services accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material During the year, the external auditors have rendered no misstatement. non-audit services. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement Going concern of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures The directors have a reasonable expectation that the that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s company has adequate resources to continue in an internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of operational existence for the foreseeable future, as set out accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. in the Chairman and Managing Director’s reports, and for this reason has adopted the going concern basis in preparing We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. the annual financial statements. Opinion In our opinion, the financial statements on pages 47 to 88 give a true and fair view of the financial position of the Company at 31 December 2011 and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards and comply with the Mauritian Companies Act 2001.

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 46 Independent Auditor’s Report Statement of Comprehensive Income 47

STATEMENT OF COMPREHENSIVE INCOME

Report on Other Legal and Regulatory Requirements STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2011 The Mauritian Companies Act 2001 requires that in carrying out our audit we consider and report to you on the following 2011 2010 matters. We confirm that: Rs’000 Rs’000

(a) we have no relationship with or interests in the Company other than in our capacity as auditor; SALES 12,313,299 9,453,712 (b) we have obtained all the information and explanations we have required; and COST OF SALES ( 11,507,655) ( 8,712,875) (c) in our opinion, proper accounting records have been kept by the Company as far as appears from our examination of GROSS PROFIT 805,644 740,837 those records. OTHER INCOME (Note 6) 71,684 67,636 OTHER LOSSES ON EXCHANGE - NET ( 3,693) ( 11,920) The directors are responsible for preparing the Corporate Governance Report on pages 23 to 44 and making the disclosures DISTRIBUTION COSTS ( 83,958) ( 72,410) required by Section 8.4 of the Code of Corporate Governance of Mauritius (“Code”). The Financial Reporting Act 2004 ADMINISTRATIVE EXPENSES ( 376,704) ( 352,448 requires us to report on these disclosures, where the directors disclose the extent of compliance with the Code. OPERATING PROFIT (Note 7) 412,973 371,695

In our opinion, the disclosures in the Corporate Governance Report are consistent with the requirements of the Code. FINANCE INCOME (Note 8) 1,086 15,497 FINANCE COSTS (Note 8) ( 25,304) ( 5,166) Other Matters FINANCE INCOME/(COSTS) - NET ( 24,218) 10,331 This report, including the opinion, has been prepared for and only for the Company’s shareholders, as a body, in accordance SHARE OF PROFIT OF JOINT VENTURE (Note 16) 10,327 8,043 with Section 205 of the Mauritian Companies Act 2001 and for no other purpose. We do not, in giving this opinion, accept PROFIT BEFORE INCOME TAX 399,082 390,069 or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it INCOME TAX EXPENSE (Note 9) ( 74,222) ( 65,146) may come save where expressly agreed by our prior consent in writing. PROFIT AND TOTAL COMPREHENSIVE INCOME FOR THE YEAR 324,860 324,923 BASIC AND DILUTED EARNINGS PER SHARE (Note 10) Rs 11.08 11.08

PricewaterhouseCoopers Lindsay Levehang, licensed by FRC 26 March 2012

The notes on pages 51 to 88 are an integral part of these financial statements.

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 48 Statement of Financial Position Statement of Changes in Equity 49

STATEMENT OF FINANCIAL POSITION STATEMENT OF CHANGES IN EQUITY

STATEMENT OF FINANCIAL POSITION - 31 DECEMBER 2011 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2011

2011 2010 Rs’000 Rs’000 Share Retained Total ASSETS capital earnings equity Non-current assets Rs’000 Rs’000 Rs’000 Property, plant and equipment (Note 12) 668,806 619,117

Intangible assets (Note 13) - 487 Prepaid operating leases (Note 14) 808 878 At 01 January 2010 293,223 148,047 441,270 Other long term assets (Note 15) 2,088 4,119 Comprehensive Income Interest in Joint venture (Note 16) 25,711 39,384 Profit for the year - 324,923 324,923 Retirement benefit asset (Note 21) 44,764 - Total comprehensive income - 324,923 324,923 742,177 663,985 Transactions with owners Current assets Dividends declared (Note 25) - ( 293,222) ( 293,222) Inventories (Note 17) 766,655 808,015 Total transactions with owners - ( 293,222) ( 293,222) Trade and other receivables (Note 18) 873,025 803,536 At 31 December 2010 293,223 179,748 472,971 Cash and cash equivalents (Note 24) 175,516 435,994 1,815,196 2,047,545 Total assets 2,557,373 2,711,530 At 01 January 2011 293,223 179,748 472,971

EQUITY Comprehensive income Capital and reserves Share capital (Note 19) 293,223 293,223 Profit for the year - 324,860 324,860 Retained earnings 179,131 179,748 Total comprehensive income - 324,860 324,860 Total equity 472,354 472,971

Transactions with owners LIABILITIES Non-current liabilities Dividends declared (Note 25) - ( 325,477) ( 325,477) Deferred income tax liabilities (Note 20) 55,018 48,028 Total transactions with owners - ( 325,477) ( 325,477) Retirement benefit obligations (Note 21) - 19,708 At 31 December 2011 293,223 179,131 472,354 55,018 67,736

Current liabilities Bank overdrafts (Note 24) 82,857 610 Trade and other payables (Note 22) 1,678,057 1,924,394 Deposits on LPG cylinders (Note 23) 247,785 218,435 Current income tax liabilities (Note 9) 21,302 27,384 2,030,001 2,170,823 Total liabilities 2,085,019 2,238,559 Total equity and liabilities 2,557,373 2,711,530

Approved by the Board of directors on 26 March 2012 and signed on its behalf by: } } } DIRECTORS } }

The notes on pages 51 to 88 are an integral part of these financial statements. The notes on pages 51 to 88 are an integral part of these financial statements.

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 50 Statement of Cash Flows Notes to the Financial Statements 51

STATEMENT OF CASH FLOWS NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2011 1 GENERAL INFORMATION Changes in accounting policies and disclosures

2011 2010 Rs’000 Rs’000 Vivo Energy Mauritius Limited (the “Company”), formerly (a) New and amended standards adopted by the Company Cash flows from operating activities Shell Mauritius Limited, is a limited liability company listed The following new standards and amendments to standards Profit before income tax 399,082 390,069 on the Stock Exchange of Mauritius and is incorporated and are mandatory for the first time for the financial period Adjustments for: domiciled in Mauritius. beginning 01 January 2011. Depreciation on property, plant and equipment (Note 12) 75,164 73,323 Loss on impairment of property, plant and equipment 4,000 15,225 Provision for impairment of receivables (Note 18) 3,758 13,658 The Company’s principal activity is the marketing and Standard Title Amortisation of intangible assets (Note 13) 487 730 distribution of petroleum products. Its joint venture, Energy IAS 1 Presentation of financial statements Amortisation of prepaid operating leases (Note 14) 70 72 Storage Company Limited, is involved in the provision of IAS 24 Related party disclosures Interest expense (Note 8) 9,250 5,166 Loss/(Profit) on disposal of property, plant and equipment 518 ( 217) LPG terminal usage facilities. IFRS 7 Financial instruments disclosures Interest income (Note 8) ( 1,086) ( 1,947) Unrealised loss/(gain) on exchange 18,192 ( 8,656) These financial statements were authorised for issue by the • The amendment to IAS 1, ‘Presentation of financial Share of profit of Joint venture (Note 16) ( 10,327) ( 8,043) board of directors on 26 March 2012. statements’ is part of the 2010 Annual Improvements and Decrease in retirement benefit obligations (Note 21) ( 64,472) ( 1,223) clarifies that an entity shall present an analysis of other Cash generated before working capital changes 434,636 478,157 2 SUMMARY OF SIGNIFICANT ACCOUNTING comprehensive income for each component of equity, Decrease/(increase) in inventories 41,360 ( 177,649) POLICIES either in the statement of changes in equity or in the Increase in receivables and prepayments ( 68,521) ( 331,035) notes to the financial statements. The application of this (Decrease)/increase in trade and other payables ( 250,532) 470,768 Increase/(decrease) in deposits on LPG cylinders (Note 23) 29,350 ( 12,061) The principal accounting policies applied in the preparation amendment has no significant impact as the Company of these financial statements, are set out below. These was already disclosing the analysis of other comprehensive Cash generated from operations 186,293 428,180 policies have been consistently applied to all the years income on its statement of changes in equity. Interest paid (Note 8) ( 9,250) ( 5,166) presented, unless otherwise stated. Income tax paid (Note 9) ( 73,652) ( 61,073) • The amendment to IAS 24, ‘Related party disclosures’ Net cash generated from operating activities 103,391 361,941 Basis of preparation clarifies and simplifies the definition of a related party and removes the requirement for government-related entities Cash flows from investing activities The financial statements of Vivo Energy Mauritius Limited to disclose details of all transactions with the government Proceeds from disposal of property, plant and equipment 1,015 405 Interest received (Note 8) 1,086 1,947 have been prepared in accordance with International and other government-related entities. The amended Loan to dealers ( 280) ( 4,000) Financial Reporting Standards (“IFRS”). The financial definition means that some entities will be required to Dividends received from Joint venture (Note 16) 24,000 30,000 statements have been prepared under the historical cost make additional disclosures, e.g., an entity that is controlled Payments for purchase of property, plant and equipment ( 130,406) ( 37,890) convention. The financial statements are presented in by an individual that is part of the key management Net cash used in investing activities ( 104,585) ( 9,538) Mauritian Rupees (‘Rs’), rounded to the nearest thousand. personnel of another entity is now required to disclose Cash flows from financing activities transactions with that second entity. The amendment has Dividends paid to company’s shareholders ( 325,477) ( 263,900) The preparation of financial statements in conformity with had little impact on the Company’s financial statements. Net cash used in financing activities ( 325,477) ( 263,900) IFRS requires the use of certain critical accounting estimates. Net (decrease)/increase in cash, cash equivalents and bank overdrafts ( 326,671) 88,503 It also requires management to exercise its judgement in the • The amendments to IFRS 7, ‘Financial Instruments - Cash, cash equivalents and bank overdrafts at beginning of year 435,384 333,331 process of applying the Company’s accounting policies. The Disclosures’ are part of the 2010 Annual Improvements Effect of exchange rate changes on cash and bank overdrafts (Note 8) ( 16,054) 13,550 areas involving a higher degree of judgement or complexity, and emphasises the interaction between quantitative or areas where assumptions and estimates are significant to Cash, cash equivalents and bank overdrafts at end of year (Note 24) 92,659 435,384 the financial statements are discussed on in Note 3.

The notes on pages 51 to 88 are an integral part of these financial statements.

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 52 Notes to the Financial Statements Notes to the Financial Statements 53

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

Summary Of Significant Accounting Policies (Continued) Summary Of Significant Accounting Policies (Continued) Changes in accounting policies and disclosures Changes in accounting policies and disclosures well as associates, to be equity accounted following the (continued) (continued) issue of IFRS 11. The Company already accounts for the investment in joint venture using the equity accounting and qualitative disclosures about the nature and (b) Standards, amendments and interpretations to existing method. extent of risks associated with financial instruments. standards that are not yet effective and have not been early The amendment has also removed the requirement to adopted by the Company (continued) • IFRS 7, Financial instruments: Disclosures on disclose the following; de-recognition • IAS 1, Presentation of financial statements The amendment will promote transparency in the • Maximum exposure to credit risk if the carrying amount The amendment changes the disclosure of items reporting of transfer transactions and improve users’ best represents the maximum exposure to credit risk; presented in other comprehensive income (“OCI”) in understanding of the risk exposures relating to transfers • Fair value of collaterals; and the statement of comprehensive income. Entities will be of financial assets and the effect of those risks onan • Renegotiated assets that would otherwise be past due required to separate items presented in OCI into two entity’s financial position, particularly those involving but not impaired. groups, based on whether or not they may be recycled to securitization of financial assets. The Company has yet to profit or loss in the future. Items that will not be recycled assess the full impact of the amendments. The application of the above amendment has simplified will be presented separately from items that may be financial risk disclosures made by the Company. recycled in the future. Entities that choose to present OCI • IFRS 9, ‘Financial instruments’ items before tax will be required to show the amount of IFRS 9, was issued in November 2009 and October Other amendments and interpretations to standards tax related to the two groups separately. 2010 and replaces those parts of IAS 39 relating to the became mandatory for the year beginning 01 January 2011 classification and measurement of financial instruments. but had no significant effect on the Company’s financial The title used by IAS 1 for the statement of comprehensive statements. income has changed to ‘statement of profit or loss and IFRS 9 requires financial assets to be classified into two other comprehensive income’, though IAS 1 still permits measurement categories: those measured as at fair value (b) Standards, amendments and interpretations to existing entities to use other titles. This amendment has no impact and those measured at amortised cost. The determination standards that are not yet effective and have not been early to the Company’s financial statements. is made at initial recognition. The classification depends adopted by the Company. on the entity’s business model for managing its financial • IAS 19, Employee benefits instruments and the contractual cash flow characteristics Numerous new standards, amendments and interpretations The impact on the Company will be as follows: to of the instrument. to existing standards have been issued but are not yet eliminate the corridor approach and recognise all effective. Below is the list of new standards that are likely to actuarial gains and losses in other comprehensive income For financial liabilities, the standard retains most of the IAS be relevant to the Company: as they occur, to immediately recognise all past service 39 requirements. The main change is that, in cases where costs; and to replace interest cost and expected return on the fair value option is taken for financial liabilities, the part Standard Title Applicable for financial years beginning plan assets with a net interest amount that is calculated of a fair value change due to an entity’s own credit risk is on/after by applying the discount rate to the net defined benefit recorded in other comprehensive income rather than in IAS 1 Presentation of financial statements 01 July 2012 liability/(asset). The Company has yet to assess the full profit or loss, unless this creates an accounting mismatch. IAS 19 Employee benefits 01 January 2013 impact of the amendments. The Company is yet to assess IFRS 9’s full impact and IAS 28 Investments in associates and joint ventures 01 January 2013 intends to adopt IFRS 9 no later than the accounting IFRS 11 Joint venture arrangements 01 January 2013 • IAS 28, Investment in associates and joint ventures period beginning on or after 1 January 2015. IFRS 12 Disclosure of interests in other entities 01 January 2013 IAS 28 includes the requirements for joint ventures, as IFRS 13 Fair value measurement 01 January 2013

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 54 Notes to the Financial Statements Notes to the Financial Statements 55

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

Summary Of Significant Accounting Policies (Continued) Summary Of Significant Accounting Policies (Continued) Changes in accounting policies and disclosures • IFRS 12, ‘Disclosure of Interests in other entities’ (continued) IFRS 12 includes the disclosure requirements for all Foreign currency translation (continued) repairs and maintenance are charged to the statement of forms of interests in other entities, including interests comprehensive Income during the financial period in which (b) Standards, amendments and interpretations to existing in subsidiaries, associates, joint arrangements, special using the currency of the primary economic environment they are incurred. standards that are not yet effective and have not been early purpose entities and other off balance sheet vehicles. The in which the entity operates (the “functional currency”). adopted by the Company (continued) Company is yet to assess IFRS 12s full impact but it is The financial statements are presented in Mauritian Rupee No depreciation is provided on freehold land and on assets likely that the new standard will have no impact on the (‘Rs’), which is the Company’s functional and presentation in the course of construction. Buildings on leasehold land • IFRS 10, ‘Consolidated financial statements’ Company’s financial statements. currency. are depreciated over the period of the lease if less than 20  This is a new standard that replaces the consolidation years. Depreciation on other assets is calculated using the requirements in SIC-12 Consolidation—Special Purpose • IFRS 13, ‘Fair value measurement’ • Transactions and balances straight-line method to allocate their cost less their residual Entities and IAS 27 Consolidated and Separate Financial IFRS 13 aims to improve consistency and reduce Foreign currency transactions are translated into the values over their estimated useful lives. The annual rates Statements. Standard builds on existing principles by complexity by providing a precise definition of fair functional currency using the exchange rates prevailing at used are: identifying the concept of control as the determining value and a single source of fair value measurement and the dates of the transactions or valuation where items are factor in whether an entity should be included within disclosure requirements for use across all IFRSs. The re-measured. Foreign exchange gains and losses resulting Freehold Buildings 5.0% the consolidated financial statements of the parent requirements, which are largely aligned between IFRS and from the settlement of such transactions and from the Plant and equipment 5.0% - 10.0% company and provides additional guidance to assist in the US GAAP, do not extend the use of fair value accounting translation at year-end exchange rates of monetary assets Motor vehicles 15.0% - 25.0% determination of control where this is difficult to assess. but provide guidance on how it should be applied where and liabilities denominated in foreign currencies are Computer equipment 33.3% its use is already required or permitted by other standards recognised in the statement of comprehensive income. Furniture and fittings 15.0% The revised definition of control focuses on the need to within IFRS. The Company is yet to assess IFRS 13s full have both power and variable returns before control is impact. Foreign exchange gains and losses that relate to present. The new standard will have no impact on the borrowings and cash and cash equivalents are presented The assets’ residual values and useful lives are reviewed, and Company’s financial statements. There are no other IFRSs or IFRIC interpretations that in the profit or loss within ‘Finance income/(costs) – Net’. adjusted if appropriate, at the end of each reporting period. are not yet effective that would be expected to have a All other foreign exchange gains and losses are presented • IFRS 11, ‘Joint arrangements’ material impact on the Company. in statement of comprehensive income within ‘Other An asset’s carrying amount is written down immediately IFRS 11 is a more realistic reflection of joint arrangements losses on exchange – Net’. to its recoverable amount if the asset’s carrying amount is by focusing on the rights and obligations of the Segment reporting greater than its estimated recoverable amount. arrangement rather than its legal form. There are two Property, plant and equipment and types of joint arrangement: joint operations and joint Operating segments are reported in a manner consistent depreciation An asset’s carrying amount is written down immediately ventures. Joint operations arise where a joint operator with the internal reporting provided to the chief operating to its recoverable amount if the asset’s carrying amount is has rights to the assets and obligations relating to the decision-maker. The chief operating decision-maker, who Property, plant and equipment is stated at historical cost greater than its estimated recoverable amount. arrangement and hence accounts for its interest in assets, is responsible for allocating resources and assessing less depreciation. Historical cost includes expenditure that is liabilities, revenue and expenses. Joint ventures arise performance of the operating segments, has been identified directly attributable to the acquisition of the items. Gains and losses on disposals are determined by comparing where the joint operator has rights to the net assets as the Chief Executive Officer. the proceeds with the carrying amount and are included in of the arrangement and hence equity accounts for its Subsequent costs are included in the asset’s carrying operating profit. interest. Proportional consolidation of joint ventures is no Foreign currency translation amount or recognised as a separate asset, as appropriate, longer allowed. The Group is yet to assess IFRS 11’s full only when it is probable that future economic benefits Intangible assets impact and intends to adopt IFRS 11 no later than the • Functional and presentation currency associated with the item will flow to the Company and accounting period beginning on or after 1 January 2013. Items included in the financial statements are measured the cost of the item can be measured reliably. The carrying Acquired computer software licences are capitalised on the amount of the replaced part is derecognised. All other basis of the costs incurred to acquire and bring to use

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NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

Summary Of Significant Accounting Policies (Continued) Summary Of Significant Accounting Policies (Continued)

Intangible assets (continued) Impairment of non-financial assets Recognition and measurement amount and the present value of estimated future cash Regular purchases and sales of financial assets are recognised flows (excluding future credit losses that have not been the specific software. These costs are amortised over their Assets that have an indefinite useful life, for example land, on the trade date, which is the date on which the Company incurred) discounted at the financial asset’s original effective estimated useful lives (not exceeding three years). are not subject to amortisation and are tested annually commits to purchase or sell the asset. interest rate. The carrying amount of the asset is reduced for impairment. Assets that are subject to depreciation or and the amount of the loss is recognised in the statement of Costs associated with maintaining computer software amortisation are reviewed for impairment whenever events Offsetting financial instruments comprehensive income. programmes are recognised as an expense as incurred. or changes in circumstances indicate that the carrying Financial assets and liabilities are offset and the net amount Development costs that are directly attributable to the amount may not be recoverable. An impairment loss is reported in the statement of financial position when there is If, in a subsequent period, the amount of the impairment loss design and testing of identifiable and unique software recognised for the amount by which the asset’s carrying a legally enforceable right to offset the recognised amounts decreases and the decrease can be related objectively to an products controlled by the Company, are recognised as amount exceeds its recoverable amount. The recoverable and there is an intention to settle on a net basis or realise event occurring after the impairment was recognised (such intangible assets, when the following criteria have been met: amount is the higher of an asset’s fair value less costs to sell the asset and settle the liability simultaneously. as an improvement in the debtor’s credit rating), the reversal and value in use. For the purposes of assessing impairment, of the previously recognised impairment loss is recognised • It is technically feasible to complete the software product assets are grouped at the lowest levels for which there Impairment of financial assets in the statement of comprehensive income. so that it will be available for use; are separately identifiable cash flows (cash-generating Assets carried at amortised cost • Management intends to complete the software product units). Non-financial assets that suffered an impairment are The Company assesses at the end of each reporting period Inventories and use or sell it; reviewed for possible reversal of the impairment at each whether there is objective evidence that a financial asset • There is an ability to use or sell the software product; reporting date. or group of financial assets is impaired. A financial asset Inventories are stated at the lower of cost and net realisable • It can be demonstrated how the software product will or a group of financial assets is impaired and impairment value. Cost is determined using the first-in, first-out (FIFO) generate probable future economic benefits; Financial assets losses are incurred only if there is objective evidence of method. Cost comprises direct costs only. Net realisable • Adequate technical, financial and other resources to impairment as a result of one or more events that occurred value is the estimated selling price in the ordinary course of complete the development and to use or sell the software Classification after the initial recognition of the asset (a ‘loss event’) and business, less the costs of completion and applicable variable product are available; and The Company classifies its financial assets in the following that loss event (or events) has an impact on the estimated selling expenses. • The expenditure attributable to the software product categories: Loans and receivables. The classification depends future cash flows of the financial asset or group of financial Spares, accessories and supplies included under inventories during its development can be reliably measured. on the purpose for which the financial assets were acquired. assets that can be reliably estimated. consist of items which are regularly used for repairs, Directly attributable costs that are capitalised as part of Management determines the classification of its financial maintenance and new installations. They are stated at the the software product include the software development assets at initial recognition. Evidence of impairment may include indications that the lower of cost and net realisable value. employee costs and an appropriate portion of relevant debtors or a group of debtors is experiencing significant overheads. Loans and receivables financial difficulty, default or delinquency in interest or Trade receivables Loans and receivables are non-derivative financial assets with principal payments, the probability that they will enter Other development expenditures that do not meet fixed or determinable payments that are not quoted in an bankruptcy or other financial reorganisation, and where Trade receivables are recognised initially at fair value and these criteria are recognised as an expense as incurred. active market. They are included in current assets, except for observable data indicate that there is a measurable decrease subsequently measured at amortised cost using the effective Development costs previously recognised as an expense are maturities greater than 12 months after the reporting date. in the estimated future cash flows, such as changes in arrears interest method, less provision for impairment. A provision not recognised as an asset in a subsequent period. These are classified as non-current assets. The Company’s or economic conditions that correlate with defaults. for impairment of trade and other receivables is established loans and receivables comprise ‘trade and other receivables’, when there is objective evidence that the Company will not Computer software development costs recognised as ’non-current receivables and prepayments’ and ‘cash and For loans and receivables category, the amount of the loss be able to collect all amounts due according to the original assets are amortised over their estimated useful lives, not cash equivalents’ in the statement of financial position. is measured as the difference between the asset’s carrying terms of the receivables. Significant financial difficulties of exceeding three years.

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 58 Notes to the Financial Statements Notes to the Financial Statements 59

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

Summary Of Significant Accounting Policies (Continued) Summary Of Significant Accounting Policies (Continued)

the debtor, probability that the debtor will enter bankruptcy Trade payables Interest in Joint Venture assets and liabilities and their carrying amounts in the financial or financial reorganisation, and default or delinquency in statements. However, the deferred income tax is not accounted payments (more than 90 days overdue) are considered Trade payables are obligations to pay for goods or services A joint venture is a contractual agreement whereby two or for if it arises from initial recognition of an asset or liability in a indicators that the receivable is impaired. The amount of that have been acquired in the ordinary course of business more parties undertake an economic activity that is subject transaction other than a business combination that at the time the provision is the difference between the asset’s carrying from suppliers. Accounts payable are classified as current to joint control. of the transaction affects neither accounting nor taxable profit amount and its recoverable amount, being the present value liabilities if payment is due within one year or less (or in the or loss. Deferred income tax is determined using tax rates of estimated future cash flows, discounted at the original normal operating cycle of the business if longer). If not, they Joint control is the contractually agreed sharing of control (and laws) that have been enacted or substantively enacted effective interest rate. The carrying amount of the asset are presented as non-current liabilities. over an economic activity, and exists only when the strategic by the date of the statement of financial position and are is reduced through the use of an allowance account, and financial and operating decisions relating to the activity require expected to apply when the related deferred income tax asset the amount of the loss is recognised in the statement of Trade payables are recognised initially at fair value and the unanimous consent of the parties sharing control (the is realised or the deferred income tax liability is settled. comprehensive income. When a receivable is uncollectible, subsequently measured at amortised cost using the effective venturers). it is written off against the allowance account for trade interest rate method. Deferred income tax assets are recognised only to the extent or other receivables. Subsequent recoveries of amounts The interest in the joint venture is accounted for using the that it is probable that future taxable profit will be available previously written off are credited against ‘administrative Accounting for leases equity method of accounting and is initially recognised at cost against which the temporary differences can be utilised. expenses’ in the statement of comprehensive income. Bad and adjusted thereafter for the post acquisition change in the debts are written off in the year in which they are identified. Leases in which a significant portion of the risks and rewards venturer’s share of net assets of the jointly controlled entity. Deferred income tax is provided on temporary differences of ownership are retained by the lessor are classified as The profit or loss of the venturer includes the venturer’s share arising from depreciation on plant and equipment. Cash and cash equivalents operating leases. Payments made under operating leases of the profit or loss of the jointly controlled entity. are charged to the statement of comprehensive income on Deferred income tax assets and liabilities are offset when In the statement of cash flows, cash and cash equivalents a straight-line basis over the period of the lease Current and deferred income tax there is a legally enforceable right to offset current tax assets includes cash in hand, deposits held at call with banks, other against current tax liabilities and when the deferred income short-term highly liquid investments with original maturities The Company leases land under operating leases. Upfront The tax expense for the period comprises current, deferred taxes assets and liabilities relate to income taxes levied by the of three months or less and bank overdrafts. Bank overdrafts lease payments are carried forward as prepaid operating income tax and Corporate Social Responsibility contribution. same taxation authority on either the same taxable entity are shown separately on the statement of financial position. leases under non-current assets and are amortised so as to Tax is recognised in the statement of comprehensive income, or different taxable entities where there is an intention to record a constant annual charge to the profit or loss over the except to the extent that it relates to items recognised directly settle the balances on a net basis. Share capital lease period. Other payments made under operating leases in equity. In this case, the tax is also recognised in equity. are charged to the profit or loss on a straight line basis over The current income tax charge is calculated on the basis of Employee benefits Ordinary shares are classified as “Share Capital” in equity. the period of the lease. the tax laws enacted or substantively enacted at the reporting Where any group company purchases the Company’s date. Management periodically evaluates positions taken in • Pension and retirement plans equity share capital (treasury shares), the consideration When an operating lease is terminated before the lease period tax returns with respect to situations in which applicable tax The company has a defined benefit pension plan. A defined paid, including any directly attributable incremental costs has expired, any payment required to be made to the lessor regulation is subject to interpretation. It establishes provisions benefit plan is a pension plan that defines an amount of is deducted from equity attributable to the Company’s by way of penalty is recognised as an expense in the period in where appropriate on the basis of amounts expected to be pension benefit that an employee will receive on retirement, equity holders until the shares are cancelled or reissued. which termination takes place. paid to the tax authorities. usually dependent on one or more factors such as age, Where such ordinary shares are subsequently reissued, years of service and compensation. The plan is funded by any consideration received, net of any directly attributable Deferred income tax is recognised, using the liability method, the payments from the Company taking account of the incremental transaction costs is included in equity. on temporary differences arising between the tax bases of recommendations of independent qualified actuaries.

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 60 Notes to the Financial Statements Notes to the Financial Statements 61

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

Summary Of Significant Accounting Policies (Continued) Summary Of Significant Accounting Policies (Continued)

The liability recognised in the statement of financial position • Other benefits outflow with respect to any one item included in the same Dividend distributions in respect of the defined benefit pension plan is the present Employee entitlement to annual leave and other benefits are class of obligations may be small. value of the defined benefit obligation at the reporting date recognised when they accrue to the employees. Dividend distributions to the Company’s shareholders are less the fair value of plan assets, together with adjustments for Provisions are measured at the present value of the recognised in the Company’s financial statements in the year unrecognised actuarial gains or losses and past service costs. • Termination benefits expenditures expected to be required to settle the in which the dividends are declared. Premium costs are assessed using the projected unit credit Termination benefits are payable when employment is obligation using a pre-tax rate that reflects current market method: the cost of providing pensions is charged to the profit terminated by the Company before the normal retirement assessments of the time value of money and the risks or loss so as to spread the regular cost over the service lives date, or whenever an employee accepts voluntary redundancy specific to the obligation. The increase in the provision due 3 CRITICAL ACCOUNTING of employees in accordance with the advice of the actuaries in exchange for these benefits. The Company recognises to passage of time is recognised as interest expense. ESTIMATES AND JUDGEMENTS who carry out a full valuation of the plan every three years termination benefits when it is demonstrably committed to (the latest valuation was done at 01 January 2009). either: terminating the employment of current employees Revenue recognition Estimates and judgements are continually evaluated and according to a detailed formal plan without possibility of are based on historical experience and other factors, The defined benefit obligation is calculated annually by withdrawal; or providing termination benefits as a result of Revenue is measured at the fair value of the consideration including experience of future events that are believed to independent actuaries using the projected unit credit an offer made to encourage voluntary redundancy. Benefits received or receivable, and represents amounts receivable be reasonable under the circumstances. method. The present value of the defined benefit obligation falling due more than 12 months after the reporting date are for goods supplies, stated net of discounts, returns and is determined by discounting the estimated future cash discounted to their present value. value added taxes. The Company recognises revenue when Critical accounting estimates and assumptions outflows using a discount rate by reference to current interest the amount of revenue can be reliably measured; when it rates and the yield on Treasury Bills and recent corporate Deposits on LPG cylinders is probable that future economic benefits will flow to the The Company makes estimates and assumptions debentures. Actuarial gains and losses are recognised over entity; and when specific criteria have been met for each of concerning the future. The resulting accounting estimates the average remaining service lives of employees. Deposits on LPG cylinders are accounted for as part of the Company’s activities, as described below. will, by definition, seldom equal the related actual results. current liabilities and are recognised at historical cost in the Estimates and judgements are continually evaluated and are Actuarial gains and losses arising from experience adjustments financial statements. Sale of goods based on historical experience and other factors, including and changes in actuarial assumptions in excess of the greater expectations of future events that are believed to be of 10% of the value of plan assets or 10% of the defined Provisions Sales are recognised upon delivery of products and reasonable under the circumstances. benefit obligation are charged or credited to the profit customer acceptance, if any, net of trade discounts and value or loss over the employees’ expected average remaining Provisions for environmental restoration, restructuring costs added tax. The estimates and assumptions that have a significant risk working lives. and legal claims are recognised when: the Company has a of causing a material adjustment to the carrying amounts present legal or constructive obligation as a result of past Dividend income of assets and liabilities within the next financial year are Gains or losses on curtailments or settlements are recognised events; it is probable that an outflow of resources will be outlined below. when the curtailments or settlements occur. required to settle the obligation, and the amount has been Dividend income is recognised when the right to receive Past-service costs are recognised immediately in the profit or reliably estimated. Provisions are not recognised for future payment is established. • Pension benefits loss, unless the changes to the pension plan are conditional operating losses. on the employees remaining in service for a specified period Where there are a number of similar obligations, the Interest income The present value of the pension obligations depends on a of time (the vesting period). In this case, the past service likelihood that an outflow will be required in settlement number of factors that are determined on an actuarial basis costs are amortised on a straight-line basis over the vesting is determined by considering the class of obligations as a Interest income is recognised on a time-proportion basis using a number of assumptions. The assumptions used in period. whole. A provision is recognised even if the likelihood of an using the effective interest method.

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 62 Notes to the Financial Statements Notes to the Financial Statements 63

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

Summary Of Significant Accounting Policies (Continued) Financial Financial Financial Financial determining the net cost (income) for pensions include the Subsequent to 30 November 2011, risk management assets liabilities assets liabilities discount rate. Any changes in these assumptions will impact remained the responsibility of the Board of directors to 2011 2011 2010 2010 the carrying amount of pension obligations. whom the Audit and Risk committee reports. The board Rs’000 Rs’000 Rs’000 Rs’000 provides written principles for overall risk management, United States Dollar 452,370 516,306 462,657 481,515 The Company determines the appropriate discount rate at as well as written policies covering specific areas, such as the end of each year. This is the interest rate that should currency risk, interest rate risk, credit risk, and investment of be used to determine the present value of estimated future excess liquidity. cash outflows expected to be required to settle the pension (a) Market risk At 31 December 2011, if the currency had weakened/ fair values of the assets. The Company’s policy is to invest in obligations. In determining the appropriate discount rate, strengthened by 10% against the USD with all other financial institutions where it can earn the highest rates of the Company considers the interest rates of high-quality (i) Currency risk and currency profile variables held constant, post-tax profit for the year would interest. corporate bonds that are denominated in the currency have decreased/increased by Rs 6,394,000 (2010 - Rs The Company’s interest rate risk arises from cash and cash in which the benefits will be paid, and that have terms to Currency risk is the risk that the fair value or future cash 1,886,000), mainly as a result of currency gains/losses on equivalents and short-term bank overdrafts which bear maturity approximating the terms of the related pension flows of a financial instrument will fluctuate because of translation of US dollar-denominated trade receivables and interest at variable rates. The Company does not have long- liability. changes in foreign exchange rates. trade payables. term borrowings. Based on the simulations performed, the impact on post- Other key assumptions for pension obligations are based in The Company transacts with international customers and Management considers a 10% shift in foreign currency tax profit of a 50 basis point shift in interest rate would be part on current market conditions. Additional information suppliers and is exposed to currency risk arising from exchange rate is appropriate to determine the sensitivity of a maximum increase/decrease of Rs 40,378 (2010 - Rs is disclosed in Note 21. various currency exposures, primarily with respect to the USD denominated financial assets and liabilities vis a vis the 328,000), respectively. United States dollar (‘USD’). Currency risk arises from Mauritian rupee as over the past year, USD vis a vis MUR future commercial transactions and recognised assets and has varied on average by 8%. Management considers that a 50 basis point shift in interest 4 FINANCIAL RISK MANAGEMENT liabilities. It is the Company’s policy not to enter into any rate is reasonable as the repo rate has fluctuated around 50 currency hedging transactions. (ii) Price risk basis point on average over the past year. Financial risk factors The currency profile of the Company’s USD-denominated Price risk is the risk that the fair value or future cash flows (b) Credit risk The Company’s activities expose it to a variety of financial financial assets and liabilities is summarised as follows: of a financial instrument will fluctuate because of changes risks: market risk (including currency risk, price risk and in market prices of equity (other than those arising from Credit risk refers to the risk that a counter-party will default cash flow interest rate risk), credit risk and liquidity risk. The interest rate risk or currency risk). on its contractual obligations resulting in financial loss to the Company’s overall risk management programme focuses Company. on the unpredictability of financial markets and seeks The Company is not exposed to equity price risk as it does to minimise potential adverse effects on the Company’s not have any investment in equity securities. Credit risk arising from trade receivables is managed at the financial performance. company level. Credit risk arises from credit exposures Risk management was carried out by a central treasury (iii) Cash flow and fair value interest rate risk to wholesale and retail customers, including outstanding department in London under policies approved by the receivables and committed transactions. The credit control board of directors of the Royal Dutch Shell plc, formerly Cash flow interest rate risk arises from the possibility that department assesses the credit quality of the customer, the ultimate parent company until 30 November 2011. changes in interest rates will affect future cash flows or the taking into account its financial position, past experience

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 64 Notes to the Financial Statements Notes to the Financial Statements 65

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

Financial Risk Management (Continued) Financial Risk Management (Continued)

and other factors. Individual risk limits are set based on The Company adopts prudent liquidity risk management by and returns that are different from those of other business internal ratings in accordance with limits set by the board. maintaining sufficient cash and cash equivalents to meet its segments. The company operates principally in Mauritius The utilisation of credit limits is regularly monitored. normal operating commitments. and has identified the following business segments:

In cases where credit limits were exceeded during the year, Capital risk management • Aviation and marine this was done in accordance with the Company’s procedures • Regulated retail and commercial and management does not expect any major losses from The Company’s objectives when managing capital are to • Non – regulated retail and commercial non-performance by these counterparties. safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and The operations of the joint venture comprise of LPG Credit risk arising on cash and cash equivalents is considered benefits for other stakeholders and to maintain an optimal terminal usage facilities. to be minimal as these are placed with reputable financial capital structure to reduce the cost of capital. institutions. There are no sales between the business segments. Revenue The capital of the Company consists of equity and retained from no single customer amounted to 10% or more of the The maximum risk exposure is equivalent to the carrying/ earnings. The Company does not have any debt, other than Company’s total revenue. Unallocated costs represent net fair value of the balances as disclosed in Note 18. short-term bank overdrafts. In order to maintain or adjust expenses that do not directly relate to a business segment. (c) Liquidity risk the capital structure, the Company may adjust the amount Segment assets consist primarily of property, plant and of dividends paid to shareholders. equipment, prepaid operating leases, loans receivable, Prudent liquidity risk management implies maintaining Fair value estimation inventories, trade and other receivables and prepayments, sufficient cash, the availability of funding through an adequate investment in joint venture, and exclude cash and cash amount of committed credit facilities and the ability to close The carrying value of trade and other receivables, cash and equivalents. Segment liabilities comprise operating liabilities out market positions. Due to the dynamic nature of the cash equivalents, bank overdrafts, trade and other payables and exclude items such as taxation. Capital expenditure underlying businesses, company treasury maintains flexibility and deposits on LPG cylinders are assumed to approximate comprises additions to property, plant and equipment. in funding by maintaining availability under committed credit their fair values due to their short term maturities. lines.

All of the Company’s financial liabilities, which includes 5 SEGMENT INFORMATION trade and other payables, deposit on LPG cylinders and bank overdrafts are payable within 12 months and the The Company has determined its operating segments based amounts recognised in the statement of financial position on the reports reviewed by the Chief Operating Officer that of Rs 2,008,699,000 (2010: Rs 2,143,439,000) are are used to make strategic decisions. A business segment is approximately equal to the contractual undiscounted cash a distinguishable component of an entity that is engaged flows. All balances due within 12 months equal their carrying in providing an individual product or service or a group amounts, as the impact of discounting is not significant. of related products or services and that is subject to risks

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 66 Notes to the Financial Statements Notes to the Financial Statements 67

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

5 SEGMENT INFORMATION (Continued) 5 SEGMENT INFORMATION (Continued) Regulated Retail and Aviation and Retail and Non-Regulated Segment assets and liabilities are reconciled to the Company’s assets and liabilities as follows: marine commercial commercial Total Assets Liabilities Rs’000 Rs’000 Rs’000 Rs’000 Rs’ 000 Rs’ 000

Revenue from external customers 4,920,427 6,255,894 1,136,978 12,313,299 Segment assets/liabilities 2,075,939 1,758,084 Segment results 134,704 179,756 208,417 522,877 Unallocated: Unallocated costs ( 109,904) Property, plant and equipment 152,589 - Operating profit 412,973 Value added tax recoverable 23,136 - Finance income 1,086 Other receivables and prepayments 85,429 - Finance cost ( 25,304) Cash and cash equivalents 175,516 - Share of profits of joint venture - - 10,327 10,327 Retirement benefit assets 44,764 Dividends payable - 146,611 Profit before income tax 399,082 Deferred income tax liabilities - 55,018 Income tax expense ( 74,222) Bank overdrafts - 82,857 Profit for the year 324,860 Other payables - 21,147 Current income tax liabilities - 21,302 Segment assets 770,465 878,973 400,790 2,050,228 Total 2,557,373 2,085,019 Joint venture - - 25,711 25,711 Unallocated assets 481,434 Total assets 2,557,373

Segment liabilities 744,520 823,353 190,211 1,758,084 Unallocated liabilities 326,935 Total liabilities 2,085,019

Other segment items Capital expenditure 5,829 95,704 21,097 122,630 Depreciation ( 12,244) ( 36,737) ( 10,971) ( 59,952) Impairment ( 4,000) - - ( 4,000) Amortisation - ( 487) - ( 487)

Unallocated items Capital expenditure 7,776 Amortisation - Depreciation ( 15,212)

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.

The assets and liabilities are allocated based on the operations of the segments.

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 68 Notes to the Financial Statements Notes to the Financial Statements 69

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

5 SEGMENT INFORMATION (Continued) 5 SEGMENT INFORMATION (Continued)

Year ended 31 December 2010 Segment assets and liabilities are reconciled to the Company’s assets and liabilities as follows: Regulated Non-Regulated Aviation and Retail and Retail and Assets Liabilities marine commercial commercial Total Rs’ 000 Rs’ 000 Rs’000 Rs’000 Rs’000 Rs’000 Segment assets/liabilities 2,024,586 1,912,135 Unallocated: Revenue from external customers 2,810,362 6,068,141 575,209 9,453,712 Property, plant and equipment 177,988 - Segment results 148,971 199,367 142,175 490,513 Value added tax recoverable 4,705 - Unallocated costs ( 118,818) Other receivables and prepayments 68,257 - Operating profit 371,695 Cash and cash equivalents 435,994 - Finance income 15,497 Dividends payable - 146,611 Finance cost ( 5,166) Deferred income tax liabilities - 48,028 Share of profits of joint venture - - 8,043 8,043 Retirement benefit obligations - 19,708 Profit before income tax 390,069 Bank overdrafts - 610 Income tax expense ( 65,146) Other payables - 84,083 Profit for the year 324,923 Current income tax liabilities - 27,384 Segment assets 909,779 828,171 247,252 1,985,202 Total 2,711,530 2,238,559 Joint venture - - 39,384 39,384 Unallocated assets 686,944 Total assets 2,711,530 Segment liabilities 734,372 1,035,431 142,332 1,912,135 6 OTHER INCOME Unallocated liabilities 326,424 Total liabilities 2,238,559 2011 2010 Other segment items Rs’000 Rs’000 Capital expenditure - 23,899 7,071 30,970 Rental income 8,739 8,888 Depreciation ( 12,212) ( 36,575) ( 8,225) ( 57,012) Management fees 3,527 3,184 Impairment ( 15,225) - - ( 15,225) (Loss)/Profit on disposal of Property, Plant and Equipment ( 518) 217 Amortisation - ( 802) - ( 802) Fuel storage fee 34,581 27,817 Throughput fee 8,094 9,825 Unallocated items Tanker discharge fee 1,053 867 Capital expenditure 7,333 Others 16,208 16,838 Amortisation - 71,684 67,636 Depreciation ( 16,311)

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 70 Notes to the Financial Statements Notes to the Financial Statements 71

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

7 OPERATING PROFIT 9 INCOME TAX EXPENSE 2011 2010 The following items have been (credited)/charged in arriving at operating profit: Rs’000 Rs’000 2011 2010 Charge for the year Rs’000 Rs’000 Loss/(profit) on disposal of property, plant and equipment 518 ( 217) Based on the profit for the year, as adjusted for tax purposes, at 15 % (2010 - 15%) 58,292 58,221 Depreciation on property, plant and equipment (Note 12) Corporate Social Responsibility provision “CSR” 6,573 5,270 - included in cost of sales 60,515 57,136 Under provision of income tax in previous year 2,367 - - included in administrative expenses 14,649 16,187 Deferred income tax (Note 20) 6,990 1,655 Impairment of assets 4,000 15,225 Charge to income statement 74,222 65,146 Amortisation of intangible assets (Note 13) 487 730 Amortisation of prepaid operating leases (Note 14) 70 72 Current income tax liabilities Fees paid to auditor - audit services 1,746 2,008 - audit related services 630 600 At 01 January 27,384 24,886 Operating lease charges on land 3,886 3,325 Charge for the year 67,232 63,491 Operating lease charges on motor vehicles 14,800 14,305 Tax liability on foreign remittances 338 80 Operating lease charges on vehicles for distribution purposes Paid during the year, based on Repairs and maintenance: 42,502 31,285 - Previous year’s profit ( 25,251) ( 24,995) - included in cost of sales 1,573 3,630 - Current year’s profit and CSR ( 48,401) ( 36,078) - included in administrative expenses 24,371 22,205 At 31 December 21,302 27,384 Staff costs (Note 11) - included in cost of sales 12,060 10,956 - included in administrative expenses 142,520 111,769 Provision for impairment of receivables (Note 18) 3,758 13,658 Inventories written down (6,053) 742 A reconciliation between the effective rate of income tax of the Company of 18.60% (2010 – 16.70%) and the applicable income tax rate Cost of inventories recognised as expense of 15% (2010 - 15.00%) follows: - included in cost of sales 11,426,913 8,632,015 (As a percentage of profit before taxation)

2011 2010 8 FINANCE INCOME/(COSTS) – NET % % Applicable income tax rate 15.00 15.00 Finance costs: Impact of: Interest expense ( 9,250) ( 5,166) Depreciation on non-qualifying assets 0.62 0.44 Unrealised exchange loss on bank accounts ( 16,054) - Expenses not allowable 1.15 0.22 ( 25,304) ( 5,166) Share of profit of joint venture ( 0.39) ( 0.31) Under provision of income tax in previous year 0.59 - Finance income: Corporate Social Responsibility 1.63 1.35 Interest income 1,086 1,947 Effective income tax rate 18.60 16.70 Unrealised exchange gain on bank accounts - 13,550 1,086 15,497 Net finance income/(costs): ( 24,218) 10,331

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 72 Notes to the Financial Statements Notes to the Financial Statements 73

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011 - 10 EARNINGS PER SHARE - Total 4,000 Rs’000 75,164 15,225 73,323 The calculation of earnings per share is based on the Company’s profit for the year ofRs 324,860,000 (2010 - Rs 324,923,000) and on 38,303 619,117 761,178 668,806 745,902 683,178 130,406 1,429,984 1,365,019 1,353,534 ( 25,824) ( ( 19) ( 29,322,252 ordinary shares in issue and outstanding during the two years ended 31 December 2011. There were no potentially dilutive 65,422) ( ( 63,888) ( 810) ( 26,008) ( shares outstanding at 31 December 2011 or 2010. Diluted earnings per share are therefore the same as basic earnings per share. ------325 325 325 6,962 Rs’000 12,710 12,710 12,710 11 STAFF COSTS Capital ( 6,962) in progress ( 325) expenditure 2011 2010

------Rs’000 Rs’000 - 9,234 1,609 1,662 fittings Rs’000 20,633 28,930 10,868 11,399 18,062 20,700 Wages and salaries 118,523 110,065 33,306 ( 8,272) ( 4,300) ( 8,297) Social security costs 1,342 1,218 ( 4,376) Furniture and Pension costs – defined benefit plan (Note 21) 20,351 17,314

------Pension exit fee 27,884 - - Other benefits 21,809 18,498 1,288 3,587 2,299 3,293 Rs’000 28,967 30,639 27,679 27,052 27,942 Termination benefits 916 492 34,821 Computer ( 1,672) ( 4,183) ( 1,672) ( 4,182) Recharge of costs to related companies ( 34,679) ( 24,862) equipment 156,146 122,725

------2,154 2,154 2,154 2,154 4,552 4,552 Rs’000 2011 2010 ( 2,398) ( 2,398)

Number Number (2010 - Rs 325,126) in the course of construction.

Motor vehicles

Number of employees at year end 120 119 325 4,000 6,962 Rs’000 810) 94,600 60,615 15,225 57,032 Directors’ emoluments included in staff costs are as follows: 37,978

448,317 419,107 609,481 589,651 531,550 978,888 Plant and 1,057,798 2011 2010 1,008,758 Rs 12,709,865 ( equipment ( 19) ( 44,785) ( 14,156) ( 45,866) Rs’000 Rs’000 ( 14,260)

------

Short-term benefits 14,544 9,126 land 5,145 5,494 Rs’000 63,045 54,567 14,027 55,118 54,723 Post-employment benefits 1,281 1,246 49,829 118,163 109,290 109,890 Buildings ( 4,750) ( 5,154) ( 600) ( 15,825 10,372 600) ( on leasehold

------Further to the change in ownership of the Company in November 2011, Shell Trust (Bermuda) Limited terminated the participation of 9,069 5,496 5,842 Rs’000 75,353 71,804 55,347 54,260 the Company in the Shell Overseas Contributory Pension Fund (‘SOCPF’). The Company was charged an exit fee of GBP 618,000 (Rs 48,605 130,700 126,064 126,256 buildings Freehold ( 4,409) ( 4,433) 27,884,160). 192) ( ( 187)

------The recharge of costs is in respect of 14 (2010 - 13) Shell Oil Products Africa (SOPAF) employees based in Mauritius whose costs are -

incurred by the Company and recharged to other group companies. Rs’000 58,859 58,859 58,859 58,859 58,859

Out of the Rs 15,825,642 as directors’ emoluments, a sum of Rs 1,052,609 has been claimed back to Shell International Petroleum Company Limited Freehold land

At 31 December 2011 Included in capital expenditure progress are plant and equipment amounting to Net book amount: At 31 December 2010 At 31 December 2011 Charge the year for At 31 December 2010 Charge the year for At 01 January 2010 At 31 December 2011 depreciation: Accumulated Write offs/adjustments Assets capitalised At 31 December 2010 Additions Disposals Impairment loss Disposals Impairment loss Disposals Disposals Assets capitalised Write offs/adjustments

At 01 January 2010 Additions

Cost:

12 PROPERTY, PLANT AND EQUIPMENT PLANT 12 PROPERTY,

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 74 Notes to the Financial Statements Notes to the Financial Statements 75

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

13 INTANGIBLE ASSETS 15 OTHER LONG TERM ASSETS Computer software 2011 2010 Rs’000 Rs’000 Rs’000 Cost: At 01 January 2010, 31 December 2010 and at 31 December 2011 21,812 Loans to Dealers Deferred charges and prepayments 2,088 4,000 Accumulated amortisation: - 119 At 01 January 2010 20,595 2,088 4,119 Amortisation for the year 730 At 31 December 2010 21,325 Loans to Dealers relate to a loan agreement between the Company and an Ebène retailer for the construction of a petrol station at Ebène. Amortisation for the year 487 At 31 December 2011 21,812 Net book amount: 16 INTEREST IN JOINT VENTURE At 31 December 2011 - 2011 2010 At 31 December 2010 487 Rs’000 Rs’000 Cost: At 01 January and 31 December 15,000 15,000 Share of post-acquisition reserves: 14 PREPAID OPERATING LEASES At 01 January 24,384 46,341 Share of profit after income tax 10,327 8,043 Rs’000 Dividends received ( 24,000) ( 30,000) Cost: At 31 December 10,711 24,384 At 01 January 2010 1,751 Net book amount: Disposals ( 132) At 31 December 25,711 39,384 At 31 December 2010 1,619 Disposals ( 146) The Company’s interest in its joint venture, which is unlisted, is as follows: At 31 December 2011 1,473 Place of Description of % % Amortisation: incorporation Activity shares held holding holding At 01 January 2010 797 2011 2010 Charge for the year 72 Energy Storage Company Disposals ( 128) Limited Mauritius LPG storage Ordinary shares 50.0 50.0 At 31 December 2010 741 Charge for the year 70 Disposals ( 146) Key financial information of the joint venture is summarised below: At 31 December 2011 665 2011 2010 Net book amount: Rs’000 Rs’000 At 31 December 2011 808 At 31 December 2010 878 Total assets 80,076 109,630 Total liabilities 29,182 30,864 Operating leases represent upfront lease payments on certain lease of land. Revenue 31,358 26,794 Profit and Total Comprehensive Income for the year 20,127 16,086

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 76 Notes to the Financial Statements Notes to the Financial Statements 77

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

17 INVENTORIES 18 TRADE AND OTHER RECEIVABLES (Continued) 2011 2010 Rs’000 Rs’000 As of 31 December 2011, trade receivables of Rs 21,473,000 (2010 - Rs 23,124,000) were impaired. The amount of the provision was Rs 21,473,000 as of 31 December 2011 (2010 - Rs 23,124,000). The individually impaired receivables relate to customers, which are in Goods for resale (at cost) 742,227 794,280 ­unexpectedly difficult economic situations. The ageing of these receivables is as follows: Spares, accessories and supplies (at net realisable value) 24,428 13,735 766,655 808,015 2011 2010 Rs’000 Rs’000

3 to 6 months 7,732 11,077 18 TRADE AND OTHER RECEIVABLES Over 6 months 13,741 12,047 21,473 23,124 2011 2010 Rs’000 Rs’000 The carrying amounts of the Company’s trade and other receivables are denominated in the following currencies: Trade receivables 652,078 554,210 Less: provision for impairment of receivables ( 21,473) ( 23,124) 2011 2010 Trade receivables – net 630,605 531,086 Rs’000 Rs’000 Other receivables 33,985 19,285 Currency Less: provision for impairment of other receivables ( 1,398) ( 2,935) Mauritian rupee 449,159 356,502 Other receivables – net 32,587 16,350 United States dollar 423,866 447,034 Trade receivables from related companies (Note 28 (vi)) 148,794 201,068 873,025 803,536 Value added tax recoverable 23,136 4,705 Prepayments 37,903 50,327 209,833 256,100 Movements on the Company’s provision for impairment of trade and other receivables are as follows: 873,025 803,536 2011 2010 Rs’000 Rs’000 The carrying amount of receivables and prepayments approximate their fair values. At 01 January 26,059 15,930 Trade receivables that are less than three months past due are not considered impaired. As of 31 December 2011, trade receivables of Provision for impairment of trade and other receivables 3,758 13,658 Rs 107,606,000 (2010 - Rs 5,355,000) were past due but not impaired. These relate to a number of independent customers for whom Receivables written off during the year as uncollectible ( 6,946) ( 3,529) there is no recent history of default. The ageing analysis of these trade receivables are as follows: At 31 December 22,871 26,059

2011 2010 Rs’000 Rs’000 The creation and release of provision for impaired receivables have been included in ‘administrative expenses’ in profit or loss. Amounts charged to the allowance account are generally written off, when there is no expectation of recovering additional cash. Up to 3 months 107,606 5,355 The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable. At 31 December 2011, the Company held bank guarantees as security on receivables amounting to Rs 14,205,000 (2010 - Rs 8,280,000).

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 78 Notes to the Financial Statements Notes to the Financial Statements 79

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

19 SHARE CAPITAL 21 RETIREMENT BENEFIT OBLIGATIONS

2011 2010 2011 2010 Pension benefits Number Number Rs’000 Rs’000 The amounts recognised in the statement of financial position are determined as follows: Issued and fully paid: Ordinary shares of Nil par value 29,322,252 29,322,252 293,223 293,223 2011 2010 Rs’000 Rs’000

Present value of funded obligations 241,642 189,589 20 DEFERRED INCOME TAX LIABILITIES Fair value of plan assets ( 190,416) ( 121,224) 51,226 68,365 The gross movement on the deferred income tax account is as follows: Unrecognised actuarial loss ( 95,990) ( 48,657) (Asset)/liability in the statement of financial position ( 44,764) 19,708 2011 2010 Rs’000 Rs’000 The amounts recognised in profit or loss are as follows: At 01 January 48,028 46,373 2011 2010 Charge for the year (Note 9) 6,990 1,655 Rs’000 Rs’000 At 31 December 55,018 48,028 Current service cost 7,351 6,708 Scheme expenses 997 655 Cost of insuring risk benefits 1,160 1,181 Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax Interest cost 20,878 17,943 liabilities and when the deferred income taxes relate to the same fiscal authority. Expected return on plan assets ( 13,725) ( 11,424) Actuarial loss 3,690 2,251 The movements in deferred income tax assets and liabilities during the year are shown below: Total included in staff costs (Note 11) 20,351 17,314

Accelerated Provision for Retirement Capital tax impairment of benefit Other The actual return on plan assets amounted Rs (9,667,448) (2010 - Rs 7,488,167). allowances receivables obligations differences Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 The movement in the (asset)/liability recognised in the statement of financial position is as follows:

At 01 January 2010 54,804 ( 4,735) ( 3,139) ( 557) 46,373 2011 2010 Charge/(credit) for the year 3,280 826 183 ( 2,634) 1,655 Rs’000 Rs’000 At 31 December 2010 58,084 ( 3,909) ( 2,956) ( 3,191) 48,028 Charge/(credit) for the year 5,538 478 666 308 6,990 At 01 January 19,708 20,931 At 31 December 2011 63,622 ( 3,431) ( 2,290) ( 2,883) 55,018 Total expense – as shown above 20,351 17,314 Employer’s contributions ( 84,823) ( 18,537) At 31 December ( 44,764) 19,708

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 80 Notes to the Financial Statements Notes to the Financial Statements 81

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

21 RETIREMENT BENEFIT OBLIGATIONS (Continued) 21 RETIREMENT BENEFIT OBLIGATIONS (Continued)

The movement in present value of funded obligations is as follows: Plan assets

2011 2010 None of the plan assets are invested in shares of the Company or in property used by the Company. Rs’000 Rs’000 Mortality rate At 01 January 189,589 171,121 Current service cost 7,351 6,708 Assumptions regarding future mortality experience are set based on advice in accordance with published statistics and experience. The aver- Interest cost 20,878 17,943 age life expectancy in years of a pensioner retiring at age 60 on the reporting date is as follows: Actuarial loss/(gains) 27,630 - Benefits paid ( 3,806) ( 6,183) 2011 2010 At 31 December 241,642 189,589 Male 18 18 Female 23 23 The movement in fair value of plan assets is as follows: The average life expectancy in years of a pensioner retiring at age 60, 20 years after the reporting date is as follows: At 01 January 121,224 103,217 Expected return on plan assets 13,725 11,424 2011 2010 Employer’s contribution 84,823 18,537 Scheme expenses ( 997) ( 655) Male 18 18 Cost of insuring risk benefits ( 1,160) ( 1,181) Female 23 23 Actuarial (losses)/gains ( 23,393) ( 3,935) Benefits paid ( 3,806) ( 6,183) At 31 December 190,416 121,224 2011 2010 2009 2008 2007 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 At 31 December: Plan assets are comprised as follows: Present value of defined benefit obligations 241,642 189,589 171,121 154,542 118,219 2011 2011 2010 2010 Fair value of plan assets 190,416 121,224 103,217 82,294 85,930 Rs’000 % Rs’000 % Deficit/(surplus) 51,226 68,365 67,904 72,248 32,289

Overseas equities 116,192 61 74,062 61 Experience adjustments on plan liabilities 27,630 - - 22,358 ( 11,921) Overseas fixed interest securities 74,224 39 47,162 39 190,416 100 121,224 100 Experience adjustments on plan assets ( 23,393) ( 3,935) 2,498 ( 19,670) ( 10,100)

The expected return on plan assets is determined by considering the expected returns available on the assets underlying the current invest- The Company’s best estimate of the contributions expected to be paid for the year ending 31 December 2012 is Rs 18,000,000. ment policy. Expected returns on overseas equities reflect long-term government bond yields plus an approximate equity risk premium. Expected yields as fixed interest securities are based on government bond yields of approximately 10% per annum.

The principal actuarial assumptions used were as follows:

2011 2010 % %

Discount rate 9.25 10.00 Expected rate of return on plan assets 9.25 10.50 Future salary increases 7.25 7.50 Future pension increases 3.00 3.00

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 82 Notes to the Financial Statements Notes to the Financial Statements 83

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

22 TRADE AND OTHER PAYABLES 26 OPERATING LEASES

2011 2010 The Company leases various plots of land and vehicles under non-cancellable operating lease agreements. The leases have varying terms, Rs’000 Rs’000 escalation clauses and renewal rights. The lease expenditure charged to profit or loss during the year is disclosed in Note 7.

Trade payables 1,474,521 1,587,530 The future aggregate minimum lease payments under non-cancellable motor vehicle leases are as follows: Payable to related parties (Note 28 (vi)) 123,777 222,564 Other payables and accruals 79,759 114,300 2011 2010 1,678,057 1,924,394 Rs’000 Rs’000

Within 1 year 23,891 19,557 Between 1 and 5 years 41,059 40,140 23 DEPOSITS ON LPG CYLINDERS After five years 22,408 21,005

2011 2010 The future aggregate minimum lease payments under non-cancellable leasehold land leases are as follows: Rs’000 Rs’000 2011 2010 At 01 January 218,435 230,496 Rs’000 Rs’000 Net (refunds)/deposits received 29,350 ( 12,061) At 31 December 247,785 218,435 Within 1 year 3,177 3,318 Between 1 and 5 years 13,966 13,906 After five years 2,152 4,734

24 CASH, CASH EQUIVALENTS AND BANK OVERDRAFTS

Cash, cash equivalents and bank overdrafts include the following for the purposes of the cash flow statement. 27 CONTINGENT LIABILITIES 2011 2010 Rs’000 Rs’000 At 31 December 2011, there were contingent liabilities in respect of bank guarantees amounting to Rs 14,099,885 (2010 - Rs 6,942,708) in the ordinary course of business. It is not anticipated that any material liabilities will arise from the contingent liabilities other than those Cash and cash equivalents 175,516 435,994 provided for. Bank overdrafts ( 82,857) ( 610) 92,659 435,384 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 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 6.88% annually (2010: 7.56% annually).

25 DIVIDENDS 28 RELATED PARTY TRANSACTIONS

At 31 December 2011, the Company is controlled by Vivo Energy Mauritius Holdings BV (Netherlands) which owns 75% of the Company’s The company declared the following dividends during the year. shares (shares previously held by Shell Overseas Holdings Limited). The remaining 25% of the shares are widely held and are listed on the

Stock Exchange of Mauritius. The intermediate and ultimate parents of the Company are Vivo Energy Holding BV (Netherlands) and HV 2011 2010 Investments BV (Netherlands), companies based in Netherlands. Until 30 November 2011, the directors considered Shell Overseas Hold- Rs’000 Rs’000 ings Limited and Royal Dutch Shell plc as the Company’s parent and ultimate parent respectively. Fellow subsidiaries are entities which are

controlled by the ultimate parent directly or indirectly through one or more intermediaries. Associates are entities in which the Company has Rs 6.10 per ordinary share (2010 - Rs 5.00) 178,866 146,611 significant influence but which it does not control. The following transactions were carried out with related parties: Rs 5.00 per ordinary share (2010 - Rs 5.00) 146,611 146,611 325,477 293,222

The dividend of Rs 6.10 declared in 2011 represents the final dividend in respect of the financial year ended 31 December 2010. The dividend of Rs 5.00 declared in 2011 represents the interim dividend in relation to the financial year ended 31 December 2011.

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 84 Notes to the Financial Statements Notes to the Financial Statements 85

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

28 RELATED PARTY TRANSACTIONS (Continued) 28 RELATED PARTY TRANSACTIONS (Continued) 2011 2010 Rs’000 Rs’000 2011 2010 (i) Purchases of goods and services Rs’000 Rs’000

Purchases of goods: Emoluments 33,462 25,338 Shell South Africa (former fellow subsidiary) (lubricants) 140,967 178,733 Post employment benefits 3,598 3,309 Purchases of services from former fellow subsidiaries: 37,060 28,647 Shell International Petroleum Company 63,257 62,179 Out of the Rs 37,060,000, Rs. 3,335,883 were claimed to Shell International Petroleum Company Limited. Other Shell entities 20,421 11,728 83,678 73,907 (iv) Expenses

The above transactions were carried out on normal commercial terms and conditions, except for service fees amounting Rs 64,132,057 Expenses paid: (2010 - Rs 69,270,883) which are charged by Shell International Petroleum Company (former fellow subsidiary), a related party, for: SOPAF (former fellow subsidiary) 42,178 31,203 Shell Trust Bermuda Limited 27,884 - (a) Business Support Services and Research and Development and Technical Support Services, at cost, and 70,062 31,203 (b) Management Advisory Services, at cost plus 10%. The expenses related to SOPAF (Shell Oil Products Africa) were made on behalf of (and reclaimed from) Shell International Petroleum Company Limited. These expenses were invoiced at cost and included staff costs of Rs 34,679,000.

The services are charged on a General or Specific basis as follows: The expenses related to Shell Trust Bermuda Limited were made in respect of a pension exit fee. General services - Proportion of Company’s turnover to the turnover of all Shell’s operating units in Africa Specific services -Standard charge or on a time and materials basis (including disbursements) (v) Dividends paid 2011 2010

Rs’000 Rs’000 Shell Overseas Holdings Limited (former Parent) 244,108 197,925 (ii) Sales of goods and services.

(vi) Outstanding balances (a) Sales of goods to former fellow subsidiaries:

Shell Marine Products 505,694 1,671,217 Receivable from related parties: Shell International Trading & Shipping 57,304 -

Shell Uganda 369 345 Vitol Aviation 63,302 - 563,367 1,671,562 Shell Aviation 64,733 23,100 (b) Sales of services: Shell Marine Products - 167,306 Energy Storage Company Ltd (joint venture) (management services) 2,000 2,000 Shell International Petroleum Company 20,759 9,761 Vivo Energy Indian Ocean Holdings (formerly Shell Other Shell entities - 901 Indian Ocean Holdings Limited)(management services) (fellow subsidiary) 1,178 1,184 148,794 201,068 3,178 3,184

Payable to related parties: The above transactions were carried out on normal commercial terms and conditions, except for the sales of goods to Shell Marine Products in 2011 amounting to Rs 509,964,000 (2010 : Rs 1,671,217,000) provided net of discounts of Rs 5,056,940 (2010 : Rs 17,785,000) during Shell Overseas Holdings Limited (former Parent) 109,958 196,017 that year. Shell Aviation (former fellow subsidiary) 13,819 26,547

(iii) Key management personnel (including full time directors) The amounts receivable from, and payable to, related parties are unsecured, interest free and have no fixed repayment terms. 2011 2010 Number Number

Shares held in the Company - Directly 200 4,700 - Indirectly 900 900 1,100 5,600

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 86 Notes to the Financial Statements Notes to the Financial Statements 87

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011 NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

29 THREE YEAR SUMMARY 29 THREE YEAR SUMMARY 2011 2010 2009 2011 2010 2009 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Statement of financial position

Statement of Comprehensive Income ASSETS Non-current assets Sales 12,313,299 9,453,712 8,430,950 Property, plant and equipment 668,806 619,117 670,356 Intangible assets - 487 1,217 Operating profit 412,973 371,695 286,104 Prepaid operating leases 808 878 954 Finance income 1,086 15,497 7,603 Interest in joint venture 25,711 39,384 61,341 Finance cost ( 25,304) ( 5,166) ( 10,493) Other long term assets 2,088 4,119 253 Share of profit of joint venture 10,327 8,043 31,013 Retirement benefit asset 44,764 - - Profit before income tax 399,082 390,069 314,227 742,177 663,985 734,121 Income tax expense ( 74,222) ( 65,146) ( 49,961) Current assets Profit for the year 324,860 324,923 264,266 Inventories 766,655 808,015 630,366 Dividends declared per share Rs 11.10 10.00 8.75 Receivables and prepayments 873,025 803,536 492,769 Cash and cash equivalents 175,516 435,994 339,947 Basic and diluted earnings per share 11.08 11.08 9.01 1,815,196 2,047,545 1,463,082 Total assets 2,557,373 2,711,530 2,197,203

EQUITY Share capital 293,223 293,223 293,223 Retained earnings 179,131 179,748 148,047 Total equity 472,354 472,971 441,270

LIABILITIES Non-current liabilities Deferred income tax liabilities 55,018 48,028 46,373 Retirement benefit obligations - 19,708 20,931 55,018 67,736 67,304 Current liabilities Bank overdrafts 82,857 610 6,616 Trade and other payables 1,678,057 1,924,394 1,426,631 Deposits on LPG cylinders 247,785 218,435 230,496 Current income tax liabilities 21,302 27,384 24,886 2,030,001 2,170,823 1,688,629 Total liabilities 2,085,019 2,238,559 1,755,933 Total equity and liabilities 2,557,373 2,711,530 2,197,203

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011 88 Notes to the Financial Statements

NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2011

30 FINANCIAL INSTRUMENTS BY CATEGORY

Financial assets on the statement of financial position comprise of other long term assets, trade and other receivables and cash and cash equivalents totalling Rs 1,050,629,000 (2010 : Rs 1,243,649,000). Financial liabilities on the statement of financial position comprise of bank overdrafts and trade and other payables totalling Rs 1,760,914,000 (2010 : Rs 1,925,004,000). These are classified as loans and receivables and other liabilities at amortised cost respectively.

31 PARENT AND ULTIMATE PARENT COMPANIES

At 31 December 2011, the directors consider Vivo Energy Mauritius Holdings B.V. (incorporated in the Netherlands) as the parent ­company. The intermediate and ultimate parents of the Company are Vivo Energy Holding BV (Netherlands) and HV Investments BV (Netherlands), companies based in ­Netherlands.Until 30 November 2011, the directors considered Shell Overseas Holdings Limited (based in Nethelands) and Royal Dutch Shell plc (based in the United Kingdom) as the Company’s parent and ultimate parent respectively.

32 INCORPORATION AND REGISTERED OFFICE

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.

33 CURRENCY

The financial statements are presented in thousands of Mauritian rupees.

34 CHANGE IN OWNERSHIP

On 30 November 2011, 21,991,689 shares held by shares held by Shell Overseas Holdings Limited were sold to Vivo Energy Mauritius Holdings B.V. and the directors consider Vivo Energy Mauritius Holdings B.V. (incorporated in the Netherlands) as the parent company.

35 POST BALANCE SHEET EVENTS

Subsequent to the year end, the Company has through a board resolution dated 26 March 2012 declared dividends amounting to Rs 178,865,737, representing a dividend per share of Rs 6.10.

Vivo Energy Mauritius Limited Annual Report 2011