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NAÏADE RESORTS LTD ANNUAL REPORT 2011

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“As part of its ongoing programme to help protect the environment and within the context of the GML “Think Green” initiative, GML companies have once again chosen to use Cocoon paper for their Annual Reports.

Cocoon paper is made from 100% recycled pulp, certified FSC (Forest Stewardship Council).

FSC is an international, non-governmental, non-profit making organisation created in 1993. It encourages socially, ecologically and economically responsible forestry management initiatives.”

By using Cocoon Offset rather than a non recycled paper, the environmental impact was reduced by :

Source: Carbon footprint data is calculated by the Edinburgh Centre for Carbon Management in partnership with The CarbonNeutral Company. Calculations are based on a comparison between recycled paper versus virgin fibre paper produced at the same mill, and on the latest European BREF data (virgin fibre paper) available. Results are obtained according to technical information and subject to change.

1,877kg of wood

25,346litres of water

219kg of CO2 ofgreenhouse gases

1,155kg of landfill

2,341kWh of energy

1,562km travel in theaverage European car

CONTENTS

◦ Value Added Statement 2

◦ Financial Highlights and Ratios 3

◦ Board and Committees 4

◦ Management 5

◦ Administration 6

◦ Group Structure 7

◦ Chairman’s Report 8-9

◦ CEO’s Report 12-17

◦ Corporate Governance Report 18-28

◦ Other Statutory Disclosures 29-34

◦ Secretary’s Certificate 35

◦ Independent Auditors’ Report 36

◦ Statements of Financial Position 37

◦ Statements of Comprehensive Income 38-39

◦ Statements of Changes in Equity 40

◦ Statements of Cash Flows 41

◦ Notes to the Financial Statements 42-96

◦ Directors’ Profiles 97-99

◦ Senior Management Profiles 100

◦ Notice to Shareholders 101

◦ Directorship 102-103

◦ Proxy Form 105

Naïade Resorts Ltd • Pierre Simonet Street • Floreal • MauritiusTel: +230 698 9800 • Fax: +230 697 5800 • Email: [email protected]

SOMETHING MOMENTOUS IS HAPPENING

IN THE INDIAN OCEAN

Dear Shareholder,

Your Board of Directors is pleased to present the Annual Report of Naïade Resorts Ltd for the year ended 30th June 2011. This report was approved by the Board of Directors on 29th September 2011.

Arnaud LAGESSE

Chairman

2 Naïade Resorts Ltd and its Subsidiaries Annual Report 2011

Year ended Six Months ended 30 June 2011 30 June 2010 Rs’000 Rs’000

Revenue 3,153,615 1,130,602 Value Added Tax 302,351 132,988

Total revenue 3,455,966 1,263,590 Paid to suppliers for materials and services 1,427,070 590,203

Value added 2,028,896 673,387 Share of results of associates ( 66,372) ( 61,990)Discontinued operations ( 531) ( 1,714)

Total wealth created 1,961,993 609,683

Distributed as follows:Members of staff

Salaries and other benefits 944,384 418,284

Providers of capital

Interest paid on borrowings 322,794 151,295 (Loss)/Profit attributable to minority holders 4,947 -

327,741 151,295

Government and parastatal corporations

Value Added Tax 302,351 132,988 Income tax (Current and deferred) 32,963 29,964 Environmental Protection fee 11,975 3,051 Licences, permits and levies 1,668 1,014 Lease costs 82,509 22,380

431,466 189,397

Reinvested in the Group to maintain and develop operations

Depreciation and amortisation 251,843 107,601 Retained profit 6,559 ( 256,894)

258,402 ( 149,293)

Total wealth distributed and Retained 1,961,993 609,683

Value Added StatementsYear ended 30 June 2011

48%

Members

of staff

22%

Government and

parastatal corporations

17%

Providers

of capital

13%

Reinvested in the Group

to maintain and develop

operations

Naïade Resorts Ltd and its Subsidiaries Annual Report 2011 3

Financial Highlights & RatiosNaïade Resorts Ltd and its subsidiaries

Income Statement

Year ended Period ended Year ended Year ended Year ended June 30, June 30, December 31, December 31, December 31, 2011 2010 2009 2008 2007 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Total Revenue 3,153,615 1,130,602 2,390,338 2,470,551 2,413,767

EBITDA 686,009 95,670 370,985 499,466 747,407 Depreciation and amortisation (251,843) (107,601) (238,281) (172,312) (139,980)

Operating profit before finance charges 434,166 (11,931) 132,704 327,154 607,427 Finance charges (322,794) (151,295) (324,539) (195,983) (116,432)Share of results in associated companies (66,372) (61,990) (173,236) (155,018) (38,797)

Exceptional item - - - 300,884 255,807Profit before taxation 45,000 (225,216) (365,071) 277,037 708,005 Taxation (32,963) (29,964) (2,409) (7,266) (56,596)

Profit after taxation 12,037 (255,180) (367,480) 269,771 651,409 Loss after tax from discontinued operation (531) (1,714)Non-controlling interests (4,947) - - 6,634 (87,113)

Profit attributable to the Group 6,559 (256,894) (367,480) 276,405 564,296

Rs Rs Rs Rs Rs

Earnings (Loss)/per share (EPS) 0.07 (2.77) (4.27) 3.22 6.54 Dividends per share - - 0.50 2.00 3.00

Balance Sheets Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Total assets 10,336,220 8,525,274 8,806,031 9,290,734 5,886,350

Interest bearing debt 5,650,025 4,479,307 4,505,452 4,374,593 2,393,407

Borrowing excluding overdraft 5,330,748 3,892,761 4,056,080 3,773,077 2,136,128

Total equity 3,492,707 2,995,537 3,262,935 3,658,947 2,454,447

Net Assets per share 30.63 34.73 37.83 42.42 28.46

Financial Ratios

EBITDA Margin 22% 8% 16% 20% 31%Interest cover (EBITDA/Interest) 2.13 0.63 1.14 2.55 6.42 Dividend cover N/a N/a -8.54 1.61 2.18Return on equity 0% -9% -11% 8% 23%Return on assets 0% -3% -4% 3% 10%Debt to equity 1.62 1.50 1.38 1.20 0.98

Note 1: Following the Rights Issue made by Naïade Resorts Maldives Limited, Naïade Resorts Ltd is now the holding company of NRML, with an effective shareholding of 92%. NRML has been consolidated as a subsidiary as from January 1, 2011, thus explaining the increase in interest bearing debt.


Board and Committees

Arnaud Lagesse(Chairman)

Désiré Elliah

Jean-Claude Béga

Alexis Harel

Jean Paul Chasteau de Balyon

Paul Jones (appointed on 29.09.11)(Chief Executive Officer)

Jean de Fondaumière

J. Cyril Lagesse

Laurent de la Hogue (appointed on 15.02.11)

Stéphane Lagesse

Audit Committee

Alexis Harel (Chairman)

Jean-Claude Béga


Stéphane Lagesse

Corporate Governance Committee

Alexis Harel (Chairman)

Jean Paul Chasteau de Balyon (appointed on 16.11.10)

Arnaud Lagesse

Remuneration Committee

Arnaud Lagesse (Chairman)

Jean Paul Chasteau de Balyon (appointed on 16.11.10)


Alexis Harel

Secretary

Poséidon Limitée

Per Désiré Elliah


Management

Jean Pierre Auriol(General Manager) – Les Pavillons

Tony Duval(General Manager) - Merville Beach

Stéphane Baras(Directeur Général) – Grand Hôtel du Lagon/Hôtel Le Récif,

Reunion Island

Brice Lunot(General Manager) – Legends

Pascal Bertrand (General Manager) - Beau Rivage

Dominik Ruhl(General Manager) – Diva Maldives

Alain Bhoyroo(General Manager) – Tamassa

Mario de l’Estrac(Island Manager) - Ile des Deux Cocos

Executive Committee

Paul Jones – Chief Executive Officer

Désiré Elliah – Chief Financial Officer

Julian Hagger – Chief Sales and Marketing Officer

Nicolas Autrey – Group Human Resources Manager

Guillaume Valet – Group Head of Legal, Secretarial and Corporate Affairs

Jeff Butterworth – Chief Spa & Wellness Officer

Chief Internal Auditor

Pritila Joynathsing-Gayan


Registered Office

Pierre Simonet StreetFloréalMauritius

Registry and Transfer Office

Poséidon LimitéePierre Simonet StreetFloréalMauritius

Bankers

The Mauritius Commercial Bank Ltd

State Bank of Mauritius Ltd

Bank One Limited

Barclays Bank Plc

Standard Bank (Mauritius) Ltd

State Bank of India (Mauritius) Ltd

AfrAsia Bank Ltd

HSBC Limited (Mauritius, UK, Germany, Maldives)

Bank of Ceylan

Standard Bank of South Africa Limited

Banque Française Commerciale Océan Indien

Banque de La Réunion

MCB Seychelles

Auditor

Ernst & YoungChartered Accountants

Legal Advisors

Clarel BenoitAndré Robert

Notary

Jean Pierre Montocchio

Administration


Group Structure as at 30 June 2011

100%Tropical

Hotel LtdDormant

100%Naïade Foundation

CSR

100% Naïade Holidays (Pty) Ltd

Tour Operator

100% Poséidon LimitéeManagement

Company

100% Naïade Resorts (UK) Limited

London Office

100%Blue Bay

Tokey Island LimitedOperator - Ile des

Deux Cocos & Naïade Boutiques

100%

100% 100%La Plantation Limited

Dormant

100% Merville Beach Hotel Ltd

Merville LtdProperty Owner -

Merville Beach Hotel

100%

100%

100%

Naïade Resorts Ltd (Holding)

Operating Le Tropical

White Sands Resort & Spa Pvt Ltd

Operator - Diva Maldives

100%

100%

100%

100%

100%

92%

Naïade Resorts Seychelles Ltd

Naïade Holidays LtdOnline Tour Operator

NRTA LtdTraining Academy

Ari Atoll Investments Ltd

Naïade Resorts Maldives Ltd

100% 53%

100% 47%

50%

FMM Ltée

LTK Ltd

MSF Leisure Company Ltd Nautical Centre

Le Morne

33.26%

100%

SA Société Villages - Hôtel de l’Océan Indien

Dormant

99.12% SAS Le RécifOperator - Hôtel

Le Récif

100%SA Les Villas du LagonOperator - Grand Hôtel du Lagon

66.43%

SNC Saint PaulProperty Owner -

Grand Hôtel du Lagon

SAS Hôtel Prestige Réunion

Beau Rivage Co LtdOperator - Beau Rivage

Holiday & Leisure Resorts Limited

Operator - Merville Beach Hotel & Legends

Océanide Limited

Néreide LimitedOperator - Tamassa

Les Pavillons Resorts Ltd

Operator - Les Pavillons


8 Naïade Resorts Ltd and its Subsidiaries Annual Report 200988 Naïade Resorts Ltd and its Subsiubsididiardiardiardiaries ieseses AnnuAnnuAnnnnual Rall eporeppp t tt 200920098 Naïade Resorts Ltd and its Subsidiaries Annual Report 2011

Review of Activities and Results

Tourist arrivals in Mauritius in the year-ended 30th June 2011

amounted to 960,228 compared with 897,002 in the previous year,

a growth of 7%. In the Maldives, tourist arrivals for 2011 numbered

857,252, up by 19% from 719,761 in 2010. As regards Reunion

Island, the statistics are not available for the financial year but on

a calendar year basis tourist arrivals in Reunion Island in 2009 and

2010 were flat at 420k.

The growth in occupancy of Naïade hotels in 2011 was significantly

higher than that recorded by the industry. In Mauritius, the

Occupancy rate of our hotels for the year under review reached 74%

up by 12% points on 2010 whilst the occupancy at DIVA Maldives

was higher by 17% from 37% to 54%. The combined occupancy

of our two hotels in Reunion Island reached 74% up by 22% points

from 51% in 2010.

The results for the year as shown on page 38 are not comparable

with those of 2010 for the following reasons:

i) The results for 2010 were for the half year ended 30th June

2010 whilst the results for 2011 cover the full financial year

ended 30th June 2011

ii) White Sands Resorts and Spa (WSRS), the company which

owns and operates DIVA Maldives, is accounted as subsidiary

at the level of 92% as from 1st January 2011. Before that date,

WSRS was accounted as an associate at 40%

For a more complete and detailed review of the performance of the

Group from one year to another, I would refer shareholders to the

CEO’s report on pages 13 to 17.

Chairman’s Report

It is with great pleasure that, on behalf of the Board of Directors, I am submitting my report and the Groupʼs audited results of Naïade Resorts Ltd (NRL) for the year ended 30th June 2011.


Rebranding of the Group

I am delighted to report that in addition to the positive results

recorded, your Company also embarked on an ambitious rebranding

project. This project entailed the redefinition of our Vision, Purpose

and Values in addition to the world class service educational program

that is being taught to all our team members in all three countries

where we operate.

We have created a new brand concept in order to unify all the

properties within the Group providing a substantial new product and

service proposition. The new brand will be unveiled to the world at

the beginning of December.

Short term outlook

The present environment remains challenging given the continuing

global economic crisis which has created a climate of uncertainty.

However, we are encouraged by the improved results that we have

produced and the bookings in hand for the high season are ahead

of last year. The benefits of the reorganisation undertaken last year

are already starting to be seen and I am confident that this together

with the benefits we should enjoy from the rebranding will result in

continued growth for the Group.

The future of the industry also depends on the evolution of the rupee

against the major currencies in which we transact namely the euro

and pound sterling. The strength of the rupee vis a vis these two

currencies is impacting negatively on the Group and going forward it

will become more and more difficult to operate if the rupee continues

to appreciate. It is also important that the authorities together with

Air Mauritius and AHRIM find a solution regarding air access policy as

this is critical for the survival of the industry and Mauritius in general.

Appreciation

Our people have been critical to our strong performance in this

financial year. On behalf of the Board, I should like to thank everyone

in Naïade for their hard work and commitment during the year.

On behalf of the Board of Directors, I would like to welcome our

CEO, Mr Paul Jones, as a director on the Board and at the same time,

I would like to thank Mr Patrice Hardy, who resigned on the 28th

February 2011, for his contributions during his period of service.

I also wish to express my heartfelt thanks to all shareholders, Board

members, customers, business associates and bankers for their

constant and unwavering support for Naïade.

Arnaud Lagesse

Chairman

29 September 2011

Chairman’s Report (Continued)

The Group’s turnover for the year ended 30th June 2011 amounted

to Rs 3.1bn and EBITDA was Rs 686m. Operating profit for the year

under review reached Rs 434m and profit before taxation amounted

to Rs 45m. The last time the Group recorded a profit was in the year

ended 31st December 2007. The results posted in 2011 was quite an

achievement, especially in such a tough global economic climate

and the bad start in the first quarter where a loss of Rs 189m was

recorded.

Rights Issue

Naïade Resorts Ltd proceeded with a Rights Issue and Bond Issue for

a total amount of Rs 1 billion payable in two tranches in December

2010 and March 2011. 27,777,778 New Ordinary Shares and

50,000,000 9% Convertible Bonds were offered to the shareholders

and 62% of both instruments were subscribed by the shareholders. By

virtue of the underwriting agreement between GML Investissement

Ltée (GMLIL) and NRL, GMLIL subscribed to the remaining 38% of

the New Ordinary Shares and the Convertible Bonds. As a result of

the underwriting by GMLIL, the latter has increased its shareholding

from 30% to 39%.

The Rights Issue price was Rs 18 per share and, at the time of writing,

Naïade’s shares are trading at Rs 27.5 representing a growth of 53%

for those shareholders who subscribed to the Rights Issue.

Gearing and Finance Costs

During the year, the Group repaid Bank debts for an amount of Rs 1

bn thanks to the proceeds from the Rights Issue and operational cash

flow. The cash generated from operations amounted to Rs 1.2bn and

interest paid during the year totaled Rs 329m.

At 30th June 2011, total borrowings of the Group, which are higher

than 2010 due to the consolidation of White Sands Resort and Spa,

amounted to Rs 5.6bn including an amount of Rs 500m in respect of

Convertible Bonds issued in December 2010. The gearing as at the

same date is 55% on the assumption that all the Convertible Bonds

are converted into equity and 60% if the Convertible Bonds are not

converted into equity. Going forward, borrowings will decrease in line

with loan repayments. Interest cover has now improved to 2.13 times

which place less strain on the Company.

Dividend

Although we are posting significantly better results than last year,

the Board of Directors has decided not to declare a dividend for this

current financial year given the uncertainty in the global economic

environment in 2011.


REVENUE (Rs million)

TEAM MEMBERS

2,413

2,471

2,390

1,131

3,154

Year ended

31 Dec 2007

Year ended

31 Dec 2008

Year ended

31 Dec 2009

Six months

ended

30 Jun 2010

Year ended

30 Jun 2011

31 Dec 2007 31 Dec 2008 31 Dec 2009 30 Jun 2010 30 Jun 2011

2,607

2,785

2,597

2,679

2,776


SHAREHOLDER’S FUNDS (Rs million)

OCCUPANCY RATE (%)

2,454

79

3,659

76

3,263

61

2,996

61

Year ended

31 Dec 2007

Year ended

31 Dec 2008

Year ended

31 Dec 2009

Six months

ended

30 Jun 2010

Year ended

30 Jun 2011

3,493

NRL Mauritius

76

6867

64

74

62

31 Dec 2007 31 Dec 2008 31 Dec 2009 30 Jun 2010 30 Jun 2011


I would like to thank our team of nearly 3,000 professionals who are really the force driving the turnaround of your Company. As we look to 2012 and beyond, I have the greatest faith in their continued ability and determination to take the Company and our new brand to even higher levels and to sustain improved results well into the future.

Chief Executive Officer Report


Dear Shareholder,

I am delighted to be writing my first report to you as

Chief Executive Officer of Naïade Resorts Ltd. Despite

the fact that the Company and our industry have faced

a challenging environment given the continuing global

economic crisis, I believe that we have made good

progress during the past year.

All our properties in the three destinations where we

operate have improved significantly on their prior year

results, particularly those outside Mauritius, which

have exceeded our expectations. During the year, we

have also made considerable progress in improving our

balance sheet and reducing our debt burden. This is in

no small measure due to the support of our bankers,

our shareholders, principally GML Investissement ltée

and I wish to express my sincere appreciation to all.

After a difficult first quarter, signs of an upturn came

early during the second quarter with an increase

in reservations that accelerated in the third and

four quarters resulting in overall growth in Group’s

occupancy rate by 15% points for the year compared to

previous year to reach 71%. The increase in occupancy

translated into a rise of 20% in the overall RevPAR

(Revenue per Available Room-calculated by dividing

total Room Revenue by the total number of rooms

available in the Group).

Group Results

As mentioned in the Chairman’s report, the results

for the year ended 30th June 2011 are not comparable

with 2010 given that they relate to different periods

and the change in the Group structure regarding the

consolidation of White Sands Resort and Spa as a

subsidiary as from 1st January 2011. To facilitate

better understanding of the Group’s business, we are

presenting and commenting below the performance of

all hotels operated by Naïade for the year ended 30th

June 2011 compared to 2010.

Year ended 30th

June 2011

Year ended 30th

June 2010

(Unaudited)

Rs’000 Rs’000

Revenue 3,804,887 3,113,830

EBITDA 736,184 175,480

Depreciation (382,931) (383,180)

Operating

Profit / (Loss) 353,253 (207,700)

Revenue increased by 22% to Rs 3.8bn and EBITDA

increased significantly to Rs 736m during the twelve

months ended 30th June 2011. Operating profit of

all our properties for the financial year under review

reached Rs 353m, a turnaround of Rs561m when

compared to a loss of Rs 208m for the full year in 2010.

The 2011 results reflect a growth in overall RevPAR of

20% led by occupancy as well as an increase in Average

Room Rate.

Mauritius Results

The number of guests who visited our Mauritius

properties during the financial year ended 30th

June 2011 improved by 18% on last year whilst for

the same period, tourist arrivals in Mauritius increased

by 7%. Revenue of our Mauritius hotels grew by Rs

254m to reach Rs 2.2bn an increase of 13% on last

year. EBITDA increased by Rs 206m to Rs 466m, an

improvement of 79% on year 2010. Operating profit

for the year 2011 more than trebled at Rs 264m

from Rs 84m last year driven by RevPAR growth and

operating efficiencies.

Chief Executive Officer Report (Continued)



Ile de La Reunion Results

The two hotels in Reunion Island performed well above

expectations during 2011 with a combined occupancy

reaching 73% up from 51% in 2010. Revenue increased

by 26% from Rs 608m to Rs 767m and EBITDA which

was negative last year (Rs 38m) grew to Rs 98m, a

turnaround of Rs 136m. Operating profit for the year

under review was at Rs 30m compared to a loss of

Rs 116m in 2010 driven again by RevPAR growth of

25%.

Maldives Results

Diva Maldives delivered improved results with

occupancy at 54% in 2011 compared to 37% for the

full year in 2010. Revenue increased by Rs 278m to

Rs 887m, a growth of 46% on last year driven by RevPAR

growth (42%) as a result of continued strong arrivals

growth from China. EBITDA which was negative at

Rs 49m last year improved by Rs 219m to Rs 170m

for the year 2011. Operating profit reached Rs 59m

compared to a loss of Rs 175m last year.

NRL increased its participation in WSRS, the company

which owns and operates Diva Maldives, from 40% to

92% following the capital reorganisation undertaken

by the Company. NRL invested an amount of USD 36m

financed mainly by capitalising its current account and

debentures held in WSRS. As the fair value of assets

acquired in respect of the additional 52% exceeds the

amount invested by Rs 60m, a negative goodwill for

the same amount has been recognised in the accounts

under other operating revenue.

With occupancy at 54% for the year, Diva Maldives still

has considerable scope for growth, the more so that the

destination has been enjoying double digit growth over

the last three years mainly as a result of the increase in

arrivals from China. Going forward, the contribution of

Diva Maldives in the NRL portfolio will become more

pronounced.

The chart below displays the growth in EBITDA of

Rs 561m between 2010 and 2011 by country of

operation.

Capital structure and liquidity management

The Group carried out a Rights Issue during the year of

27,777,778 ordinary shares at a price of Rs 18 per share

and 9% 50,000,000 convertible bonds at Rs 10 each.

The proceeds of the Rights and Bond Issue amounting

to Rs 1 billion have been used mainly to reduce Bank

debt. Total borrowings of the Group as at 30th June

2011 stood at Rs 5.6bn. No new loan was contracted

during the year and the gearing at 60% is in line with

industry norms.

The Group focused on cash management in 2011 with

cash generated from operations reaching Rs 1.2bn as

a result of the improved results posted for the year

and careful monitoring of working capital. Debtors

days, which were at 61 last year, have been reduced to

49 days and inventories have been kept to a minimum

with stock holding days finishing at 40 days (last year

50 days).

Interest cover for the year 2011 improved four-fold

compared to last year from 0.38 to 1.66. This ratio

should continue to improve in 2012 as finance charges

reduce as a result of lower borrowings and the increase

in revenue.

year ended

30th June

2010

175

Mauritius

206

Reunion

136

Maldives

219

year ended

30th June

2011

736


Trade and other receivables

Despite the consolidation of WSRS, Trade and other

receivables were reduced by Rs 519m mainly due to the

conversion of the current account between NRL and

White Sand Resorts and Spa into equity and improved

debtor’s collection.

Our Vision, Purpose and Values – The Beginning of a

Truly Engaging Journey

The year 2011 began with a meeting comprising

of our leadership team of resort General Managers,

Department Heads from our Central Office and the

Sales Offices to discuss the past and focus on what

the approach for the future should be. As a result, the

path for our future was determined with truly amazing

insight, that; as an organisation we are actually NOT

only in the resort business but more in ‘TIME’ business.

Our guests entrust us with their most valuable time

such as:

‘Time with family, Time alone, Time off, Time to reflect,

Time to reconnect, Time to heal, Time to explore, Time

for caring, Time for sharing’…all the precious ‘TIMES’

that our guests entrust us with.

This insight offered us a truly unique way of looking

at what we could do within our teams to seize each

opportunity to craft and design these truly precious

moments: moments that are handed to us by each and

every guest that we welcome at our resorts!

Through this realisation we articulated our Vision –

“Each Moment Matters”

Our Vision led us to our true Purpose – “Helping

People Celebrate Life”

Furthermore, it became apparent that our Vision and

Purpose do not strictly only apply to our time at work or

in dealing solely with guest interactions; it engages us

at all ‘times’ including those spent with our colleagues,

our family and our friends.

Property Plant and Equipment

Property, Plant and Equipment increased by some

Rs 2 billion mainly due to Diva Maldives which is

accounted as a subsidiary as from 1st January 2011. Le

Tropical hotel no longer forms part of the long term

strategy of the Group and the Board of Directors has

therefore accepted the offer made by Attitude Resorts

for the purchase of the hotel. The transaction had

not been completed and therefore not accounted in

this financial year as there are still some conditions

precedent to be fulfilled. In line with IFRS, the assets of

Le Tropical hotel have been transferred to ‘assets held

for sale’.

Intangible Assets

The increase in Intangible Assets is explained by

the consolidation of Diva Maldives. Following new

legislation in Maldives governing the lease period for

operating resorts, WSRS was able to extend its existing

lease by a further period of 15 years against payment

of US$1.5million. The lease of Diva now expires in April

2045.

In Mauritius, the Group has also secured the options

or signed new 60 year leases for all its properties. In

Reunion Island, the leases on Grand Hotel du Lagon and

Hotel Le Récif expire in 2041 and 2051 respectively.

Investment in Associated Companies

As mentioned already, WSRS is now accounted as a

subsidiary and therefore deconsolidated as an associate

company as from 1st January 2011. The only associate

of the Group is now Océanide Limited the holding

company of Nereide Limited, which owns and operates

Tamassa hotel in Mauritius. Naïade Resorts Ltd owns

50% of the capital of Océanide Limited.



With the intent to Lighten, Brighten and Heighten

our guest experiences, Ron took us through a series of

day to day work related examples showing how little

touches and extra attention can really go a long way

in creating very special moments for our guests and in

truly “Helping People Celebrate Life.”

As a follow up, a team of 30 trainers were identified

to drive our new service culture across all our

resorts and prepare our team members on service

principles, leadership rules, culture building blocks

and implementation road-maps. The first group of 12

Certified Course Leaders graduated in “Course 100

- Achieving Superior Service” in Singapore at a 4-day

intensive training session. The second group of 18

trainers has undergone the same training in Mauritius.

Between September and December 2011, the 30

trainers will have been responsible for presenting

‘Course 100’ to 100% of all our team members.

The programme is aimed at cultivating a service

mindset where team members will be able to identify

what our guests’ value the most during their stay.

By understanding what the guest values, they will be

given action steps on how to deliver the appropriate

level of service which will in-turn help us all achieve

our Vision and Purpose while practising our five Values.

Corporate Social Responsibility

A good business proposition

We know that great companies care about the

environment in which they operate. Our CSR strategy

focuses on the two areas where we can make the most

difference: protecting the environment and creating

economic opportunities for our communities. When

we work with stakeholders to cut carbon emissions, for

example, we do it not only because it is good for the

environment but also to help us reduce costs and drive

We then discovered that the most important elements

that will help us achieve our Vision and Purpose are the

5 Values symbolised by the mnemonic of an open hand;

People, Passion, Integrity, Leadership, Creativity.

Our new Vision, Purpose and Values were communicated

to all team members of Naïade from February 22, 2011

onwards. 25 sessions of approximately 2 hours each

were conducted in all operations worldwide.

Since June 2011, teams of trainers in individual

resorts have presented the “Enroll & Pledge” exercise

aimed at bringing together cross functional teams to

reinforce the understanding of our Vision, Purpose and

Values. Conjured up through dramatisation, the team

members were encouraged to enact scenes from day to

day life at work or at home to demonstrate their true

understanding of our Vision, Purpose and Values. With

our hand on our heart we stand as one team; one force;

ready to do whatever it takes to make “Each Moment

Matter” for not only our guests but also our colleagues.

As professionals in the ‘time’ business, we together

imagine a world where every moment presents an

opportunity to achieve our purpose of “Helping People

Celebrate Life” always.

Joining Forces with UP! Your Service

With the path for the future clearly mapped out and

each individual team member having pledged to make

“Each Moment Matter” for our guests and each other;

Naïade joined forces with Ron Kaufman; founder of

the UP! Your Service College and one of the world’s

most sought-after educators, consultants and thought-

leaders in achieving superior service.

We invited Ron to interact with over 2,000 of our

team members in June 2011. This was where we first

introduced our new service culture in line with our new

resort concept: Island Light.



Schmidt and the team at Luxury Branding for their

creative insight and unique talent in conceptualising

the entire program.

In addittion, my appreciation goes to all the various

team of the properties and the General Managers for

all their hard work in executing the Island Light brand

concept.

You will be able to read all the details in the document

attached to this report

Outlook

The new financial year 2011/12 will be another

challenge given the uncertainty surrounding the global

economy. However, I am confident that the people

and the systems that we have in place will enable us to

surmount the challenges ahead. I also sincerely believe

that our new brand offers something distinctive and

special and will make our hotels stand out from the

crowd. I am therefore confident that we will be able to

continue to achieve growth over the past year.

To conclude, I would like to thank our team of around

3,000 professionals who are indeed the strength behind

the turnaround of the Company. As we look to 2012

and beyond, I have great faith in their ability to take

the Company and our new brand to higher levels and

achieve improved results in the future.

I would like to take this opportunity to thank the Board,

in particular the Chairman, Mr Arnaud Lagesse, for their

wise counsel and guidance. To the General Managers

of the hotels and their teams and my colleagues

on the Executive Committee as well as the whole

management team for their support and advice during

the year. They have certainly worked hard over long

hours, throughout the past year.

Paul Jones

Chief Executive Officer

29 September 2011

value for shareholders. We are pleased to announce

that we have signed an agreement with Carbon

Footprint Ltd and as from November 2011, each

hotel of the Group is making a contribution for each

room night occupied. The money will fund not only a

carbon offset programme but contribute to a range of

environmentally-focused projects such as LED lighting

replacement, solar power, wind turbines and irrigation.

Contribution to GML Fondation Joseph Lagesse

During the year under review, Naïade Resorts Ltd

contributed Rs 2.8m to GML Fondation Joseph

Lagesse. We are particularly proud to have contributed

financially to the implementation of numerous projects

in different sectors in which the GML Fondation Joseph

Lagesse performs, such as access to health for the

needy, the alleviation of poverty, the re-establishment

of human dignity and particularly the importance of

education and training at different levels. Through

this specific action towards education, Naïade Resorts

clearly shares the GML Fondation of Joseph Lagesse

deep-rooted conviction to place education as a priority

of its Corporate Social Responsibility.

Rebranding

During the year we took on the challenge of preparing

your company to undergo a complete rebranding.

This entailed designing an entirely new brand concept

that would serve to unify all the properties especially

those that would be monolithically branded. This

concept became known as ‘Island light’ and focused on

lightening and brightening the entire resort experience

with less emphasis on the tangible aspects of the

properties.

I am delighted to report that we were able to complete

all the detailed arrangements in time to launch the new

brand to the world’s press and our major distribution

partners before the end of the current calendar year.

I would like to take this opportunity to congratulate

and thank Julian Hagger and his entire team for their

hard work in pulling this off in conjunction with Piers



Company Constitution

On 13 December 2010, the shareholders approved by

a special resolution several changes to the Company

Constitution. The main changes are:

• The Board of Directors may increase the share

capital of the Company without the requirement

of an ordinary resolution provided that any such

increase does not exceed more than 15% of the

existing capital of the Company

• The shareholders may propose any candidate to

be elected as Director on the Board

• The sections regarding the cross-directorships

have been deleted

• A new article has been inserted detailing

circumstances in which Directors may contract

with the Company

A copy of the Constitution is available at the registered

office of the Company and on its website www.naïade.

com.

Shareholding

At 30 June 2011, the Company’s share capital was

Rs 1,140,346,510 (114,034,651 shares of Rs 10 each)

and there were 3,190 shareholders (30.06.10: 2,940) on

the registry.

The directors regard GML Investissement Ltée (GMLIL)

as the ultimate holding company and as at 30 June

2011, two directors were common to the Company

and GML Investissement Ltée (GMLIL), namely Messrs

Arnaud Lagesse and J. Cyril Lagesse.

Corporate Governance

Shareholding of more than 5% of the Company at 30 June 2011 were:

GML Investissement Ltée 39.21%

Compagnie d’Investissement Immobilier de Flacq Ltée 6.59%

The Anglo-Mauritius Assurance Society Ltd 5.84%

Patrice Hardy 5.38%

Other shareholders 42.98%

Total 100.00%


Corporate Governance (Continued)

Defined BracketsNumber of

Shareholders

Number of

Shares Owned

Percentage

%

1-500 1,037 204,267 0.18

501-1,000 406 330,671 0.30

1,001-5,000 879 2,202,510 1.93

5,001-10,000 321 2,335,263 2.05

10,001-50,000 379 8,025,526 7.03

50,001-100,000 76 5,470,709 4.80

100,001-250,000 53 8,104,368 7.10

250,001-1,000,000 32 14,688,981 12.89

1,000,001-1,500,000 0 0 0

Over 1,500,000 7 72,672,356 63.72

3,190 114,034,651 100.00

Summary of Shareholder Category

Category of ShareholdersNumber of Number of % of Total

Shareholders Shares Owned Issued Shares

Individuals 2,913 29,620,942 25.98

Insurance and assurance companies 25 8,553,472 7.50

Pension and provident funds 23 1,738,683 1.52

Investment and trust companies 2 3,757,162 3.30

Other corporate bodies 227 70,364,392 61.70

3,190 114,034,651 100.00

Share Price Information

At the time of reporting, the share price of the

Company is around Rs 27/- with 114,034,651 shares in

issue compared to Rs 26/- at the same period for the

previous financial statements, with 86,256,873 shares

in Issue.

Shareholders’ Agreement

The Company is aware of the existence of a

Shareholders’ Agreement, signed in September 2007

between GML Investissement Ltée and Forward

Investment and Development Enterprises Limited

(a minority shareholder of the Company), both of GML,

and the Anglo-Mauritius Assurance Society Limited,

which together hold 48.34% of the share capital of the

Company.

This agreement, which is mainly a working arrangement

among the shareholders mentioned above, takes

into account the interest of all shareholders under

the Companies Act 2001 and the principles of good

corporate governance. It makes provision for the

management of Naïade Resorts Ltd and lays down

procedures for key decisions, the administration and

constitution of the Board and committees of the Board,

dividend policy, retention and disposal of shares, and

pre-emption rights.

The Company’s shareholding profile as at 30 June 2011 was as follows:



Management Agreement

Poséidon Limitée, a 100% subsidiary of Naïade Resorts

Ltd, provides to the Company, its other subsidiaries

and associated company a range of management,

administrative, secretarial, financial, marketing and

communication services.

Dividend Policy

Subject to internal cash flow requirements and the

need for future capital investments, it is the Company’s

policy to declare 50% dividends out of profits available

for distribution, in accordance with the Companies

Act 2001. The Audit Committee and the Board ensure

that the Company satisfies the solvency test at each

dividend declaration.

The Board did not declare a dividend with respect to

the year ended 30 June 2011.

Summary of dividends per share paid over the past five years in MUR:

Period Interim Final Total

Year ended 31st December 2007 1.00 2.00 3.00

Year ended 31st December 2008 1.00 1.00 2.00

Year ended 31st December 2009 0.50 nil 0.50

Six months ended 30th June 2010 nil nil nil

Year ended 30th June 2011 nil nil nil

Board of Directors

Mr Patrice Hardy resigned as Managing Director and

Director of the Company on 28 February 2011.

Mrs Virginie Corneillet resigned as Director on 15

February 2011 and Mr Laurent de la Hogue was on

the same date appointed as Director to fill the vacancy

until the forthcoming Annual General Meeting. Mr Paul

Jones, Chief Executive Officer, has been appointed

as Director on the Board on 29 September 2011. His

appointment and the appointment of Mr Laurent

de la Hogue will be submitted for the approval

by the shareholders at the next Annual Meeting

of Shareholders, together with the re-election of

Mr J. Cyril Lagesse as Director under Section 138(6) of

the Companies Act, in line with the recommendations

of the Corporate Governance Committee, which also

serves as Nomination Committee.

The profiles of the above named directors are given on

pages 97 to 99 of the report, together with those of the

other directors and alternate directors.

All new directors are given a Directors Induction pack

to became acquainted with the Company and its

subsidiaries. They are also encouraged to meet with the

Company’s senior officers to gain a better insight into

the operations.



Category Number of shares

Direct

Interest

%

Indirect

Interest

%

Number of

Other

Directorships

in Listed

Companies

Directors

Jean-Claude Béga NED 235,878 0.21 - 2

Jean Paul Chasteau de Balyon NED - - - 1

Jean de Fondaumière INED - - - 4

Laurent de la Hogue (appointed on 15 Feb 2011)

NED 25,000 0.02 - 1

Désiré Elliah ED 855,766 0.75 - -

Alexis Harel INED 21,538 0.02 - 2

Arnaud Lagesse NICB 19,462 0.01 0.57 10

J. Cyril Lagesse NED 90,570 0.07 - 11

Stéphane Lagesse NED 107,564 0.09 - -

Patrice Hardy (resigned on 28 Feb 2011)

ED 6,190,228 5.42 - -

Virginie Corneillet (resigned on 15 Feb 2011)

NED 100,401 0.08 - -

Alternate Directors

Jean-Raymond Harel - 126,400 0.11 - -

Amaury Lagesse - 20,933 0.01 - -

Hugues Lagesse - - - 0.10 2

Dev Poolovadoo - 466,947 0.40 - -

ED Executive director

INED Independent non-executive director

NED Non-executive director

NICB Non-independent Chairperson of the Board

The table below sets out the Directors’ respective category, direct and indirect interests and number of other

directorships in listed companies as at 30 June 2011:

Senior Officers’ interests in the Company at 30 June 2011

Number of shares Percentage

Julian Hagger 41,000 0.03%

Paul Jones 100,000 0.08%


The Company communicates with the broader

investment community and stakeholders via press

releases and its quarterly results, which is published on

the website.

Board Appraisal

The Board appraisal conducted annually enabled the

Directors to critically appraise their peers and the

functioning of the Board. Results of the appraisal are

discussed in the Corporate Governance Committee

and any improvement actions are implemented. The

process confirmed that all Directors considered the

Board to be working well and had the right balance of

required skills.

Board Activity during the year

The Board met nine times between1 July 2010 to

30 June 2011 - the individual attendance by Directors

is detailed below - for the purpose of considering and

approving, amongst other things:

• The Audited financial statements for the six

months ending 30th June 2010 and relevant

publications

• The Financial Restructuring Agreement signed

between banks and the Company

• Rights Issue of the Company in December 2010

• Appointment of a new CEO

• Financial restructuring of Diva and Tamassa

• Sale of a portion of land next to Merville Hotel

• Refurbishment of Beau Rivage Hotel

• Branding

• Sale of Le Tropical Hotel

• Forecasts and budget

Decisions were also taken by way of written resolutions

signed by all the Directors.


Board of Directors (continued)

None of the Directors hold any direct interest in the

subsidiaries of the Company.

During the period under review, share dealings by

directors (including Alternate directors) were as follows:

Number of

Shares

Purchased/

(Sold)

Directly

Number of

Shares

Purchased/

(Sold)

Indirectly

Jean-Claude Béga 57,602

Alexis Harel 4,038

Arnaud Lagesse 4,752 215,627

Stephane Lagesse 26,267

Jean Raymond Harel 51,021

Dev Poolovadoo (35,000)

The directors follow the principles of the Model Code

for Securities Transactions by Directors of Listed

Companies as detailed in Appendix 6 of the Mauritius

Stock Exchange Listing Rules 2000, and disclose any

transaction in the shares of the Company as applicable.

The Company keeps an Interests Register in accordance

with the Companies Act 2001 and an Insiders Register

pursuant to the Securities Act 2005, and the registers

are regularly updated with the information submitted

by the directors and/or other insiders as applicable.

Communication

The Chairman and the Management of the Company

regularly meet fund managers, institutional investors

and investment analysts to discuss the state of affairs

of the Company and that of the industry in general,

within the parameters of the Listing Rules and other

applicable regulations. Any figures or information

presented to those panels are simultaneously posted

on the Company’s website.



In performing its duties, the committee maintains

an effective working relationship with the Board

of Directors, management, and the internal and

external auditors. The committee mainly makes

recommendations to the Board for its approval or

final decision.

To perform his or her role effectively, each committee

member is encouraged to obtain an understanding of

the detailed responsibilities of committee membership

as well as the Company’s business, operations,

and risks.

Attendance Report (Period ended 30 June 2011)

Board

Committees

Audit Remuneration

Corporate

Governance

Number of meetings held 9 5 3 0

Jean-Claude Béga 9 5 1/1*

Jean Paul Chasteau de Balyon 8 5 2

Laurent de la Hogue (appointed on 15 Feb 2011) 3/ 3

Jean de Fondaumière 9 3

Désiré Elliah 9

Alexis Harel 8 4 3

Arnaud Lagesse 7 2/2

J. Cyril Lagesse 8

Stéphane Lagesse 8 3

Managing Director (resigned on 28 Feb 2011) 5/6

Virginie Corneillet (resigned on 15 Feb 2011) 4/6

In attendance

Chief Executive Officer 7 /7

Chief Financial Officer - 5

Chief Internal Auditor - 1

External auditors - 1

* Mr Jean-Claude Bega replaced Mr Arnaud Lagesse once.

Committees of the Board

Audit Committee

The Audit Committee is governed by a charter which

is in line with the provisions of the Code of Corporate

Governance for Mauritius (“the Code”).

The overall objective of the Audit Committee is to

assist the Board in fulfilling its oversight responsibilities.

In so doing, the committee will review the financial

reporting process, the system of internal control and

management of risks, the audit process, the ethical

behaviour of the Company, its executives and senior

officials, and the Company’s process for monitoring

compliance with laws and regulations and its own code

of business conduct.


Committees of the Board (continued)

Audit Committee (continued)

The Audit Committee met five times during the year

and has, amongst other things:

• Reviewed interim and year end results by the

Board for approval.

• Reviewed the Listing Particulars

• Reviewed the budget for 2011/12

• Discussed the risk assessment exercise conducted

for the Company and its subsidiaries

• Taken cognizance of the internal and external

audit reports issued.

The composition of the Audit Committee remained

unchanged for the twelve months period to 30 June

2011 and its members are as follows:

Alexis Harel – Chairman

Jean-Claude Béga


Stéphane Lagesse

Remuneration Committee

The Remuneration Committee has as its main aim

to determine the basic salary and other benefits

attributable to the Senior Officers of the Company and

that of the Directors. In this exercise, the Committee

takes into account prevailing market conditions

and the job profile and responsibilities of the Officers

and Directors.

The Remuneration Committee met three times during

the year and its members comprised of

Arnaud Lagesse – Chairman

Jean Paul Chasteau de Balyon (appointed on

16 November 2010)


Alexis Harel

Patrice Hardy (resigned on 29 October 2010)


The Corporate Governance Committee, which also

acts as the Nomination Committee, is governed by a

charter which determines the objects and functions of

the Committee.

The main role of the Committee is to advise and

make recommendations to the Board on all aspects of

corporate governance which should be followed by the

Company, so that the Board remains effective while

complying with sound and recommended corporate

practices and principles.

Although no meetings of the Corporate Governance

Committee were held during the year under review,

all aspects regarding Corporate Governance were dealt

with directly by the Board.

The members of the Committee are:

Alexis Harel – Chairman

Jean Paul Chasteau de Balyon (appointed on

16 November 2010)

Arnaud Lagesse

Patrice Hardy (resigned on 29 October 2010)

Company Secretary

All Directors have access to the advice and services of

the Company Secretary, who is responsible for ensuring

that Board procedures are followed and that applicable

rules and regulations are complied with.




Remuneration paid to each executive director has

not been disclosed individually as the Board considers

this information as commercially sensitive in this

commercially competitive environment. However

remuneration is set by the Remuneration Committee

based on prevailing market rates.

Related Party Transactions

Please refer to pages 86 and 87, Note 35 to the

Financial Statements.

Employee Share Option Plan

The Company does not have an Employee Share

Option Plan.

Donations

Please refer to page 34, in Other Statutory Disclosures,

for information regarding political and other donations.

Independent Professional Advice

The Directors may also seek independent professional

advice at the Company’s expense as and when required.

Statement of Remuneration Philosophy

All Directors receive a fixed fee and an additional fee

for each board meeting attended. In addition, members

of the Audit Committee and Corporate Governance

Committee receive an extra fee for each committee

meeting attended. No additional fees are paid to the

members of the Remuneration Committee.

For the year ended 30 June 2011, there was no change

to the fee structure of Directors, which was as follows:

Board

Annual Director’s fees Rs100,000

Attendance fee Rs10,000

Audit Committee

Chairman’s Annual fee Rs75,000

Member’s Annual fee Rs50,000


Annual fee Rs25,000

Calendar of Important Events

Publication of 1st quarter results November 2011

Annual Meeting of Shareholders December 2011

Declaration/payment of interim dividend (if applicable) November/December 2011

Publication of half-yearly results February 2012

Publication of 3rd-quarter results April/May 2012

Declaration/payment of final dividend (if applicable) June/July 2012

Financial year-end June 2012

Publication of abridged end-of-year results September 2012


Internal Control and Risk Management

The Directors are responsible for ensuring that the

system of controls that is in place is sufficient and

appropriate in order to enable the Company to mitigate

the risks which may impact its objectives. Such systems

are designed to manage rather than eliminate the

risk of failure to achieve business objectives and can

provide only reasonable and not absolute assurance

against misstatement or loss.

Internal Audit

The Company has an established internal audit function

which reviews internal controls on an ongoing basis.

The function is headed by a Chief Internal Auditor who

reports administratively to the CEO and functionally to

the Audit Committee. A risk-based audit plan, which

provides assurance over key business processes and

business risks facing the Company, is approved by the

Audit Committee annually.

Risk Management

The Board has delegated to the Audit Committee the

responsibility for risk management. The Company has

put in place a structure and process to help identify,

assess and manage risks. All risks are documented

in a Risk Register and this is reviewed at least yearly

to identify new and emerging risks. All mitigating

measures taken to manage those risks are subject to

review at least annually and reported to the Audit

Committee.

The main risks faced by the Group are listed below.

Industry or Sector Risk

The volume of tourist arrivals in Mauritius and the

other destinations where the Group operates may not

grow to match with the expansion in room capacity

brought about by the construction of new hotels. This

imbalance may create competitive pressure on Naïade.

The Group is however well experienced and positioned

in the market and is able to compete effectively in the

main markets.

Political Risk

The role of Government is crucial in the development

of the tourism industry. Political stability, allocation of

adequate funds for the promotion of this sector and a

well balanced approach to the opening of air access are

very important factors to be considered.

The Company, through its affiliation with AHRIM and

equivalent associations in Maldives and Reunion, takes

part in discussions which affect the policies regarding

air access and tourism.

Market Risk

The economic recession or downturn in Europe which

remains the Group’s main market could adversely

and materially affect the Group’s operations and

financial condition.

Management’s strategy is to diversify its client base so

as to be less dependent on one market.

Information Systems Risk

The Company relies on critical information systems

to handle its operations. A breakdown in any of these

systems will cause disruptions in operations and may

affect the financial results. Regular backups of all

systems are kept to mitigate the risk of information

loss. An IT audit was conducted in the financial year to

identify any weaknesses in our systems and measures

were taken to address those weaknesses.



Human Resource Risk

The hospitality industry, in the countries in which

the Group operates, is very competitive and with the

limited workforce available in these countries, finding

the right people and retaining them are the challenges

that the Group face.

The Group conducts regular salary benchmarking across

the industry to ensure that its people receive salaries

and benefits which are in line with industry norms.

Moreover, the Company has a well defined training

program to ensure the continuous development

of its staff. The Company has also joined forces

with Ron Kaufman; founder of UP! Your Service

College and one of the world’s most sought-after

educators, consultants, and thought-leaders in

achieving superior service.

Insurance Risk

In order to protect itself against any liability falling

outside the scope of coverage or against any inadequate

coverage, the Group reviews its insurance policies on a

yearly basis with expert advisors.

Financial Risks

The Group’s activities expose it to a variety of financial

risks. A description of the significant risk factors is

given below.

Credit risk

The Group’s credit risk is primarily attributable to

its trade receivables. The amounts presented in the

statement of financial position are net of allowances

for doubtful receivables, estimated by the Group’s

management based on prior experience and the current

economic environment.

The Group has no significant concentration of credit

risk, with exposure spread over a large number of

counterparties and customers. The Group has policies

in place to ensure that sales of products and services

are made to clients with an appropriate credit history.

Adequate insurance cover has also been taken against

this risk.

Interest rate risk

The Group is exposed to interest rate risk as it borrows

at variable rates (PLR, LIBOR, EURIBOR and OAT) +

a margin. Any increase in these rates may negatively

affect its results.

Foreign Exchange risk

It is the practice in the hospitality industry to fix tariffs

yearly in advance. In order to achieve stability of tariffs

in the overseas markets and as a hedge against a fall in

the value of the Mauritian Rupee, contracts with tour

operators are denominated in the major international

currencies of the markets in which the foreign tour

operators belong.

A significant number of contracts are therefore

denominated in euros, pounds sterling and us dollars

and invoices are raised in these currencies. While

protecting the Group against any fall in the parity of

the Mauritian Rupee, it exposes it to a fall in revenue

should the Rupee appreciate against one or more of the

international currencies.

Liquidity risk

Prudent liquidity risk management implies maintaining

sufficient cash and the availability of funding through

an adequate amount of committed credit facilities.

The Group aims at maintaining flexibility in funding by

keeping reliable credit lines available.



Ethics

The Group’s whistleblowing policy, which is an

extension to the Group’s Code of Ethics, gives details

of the telephone hotline in place to report any areas

of malpractices, fraud or non-compliance to law

or Company policies. The hotline is operated by an

independent third party to ensure confidentiality

of matters reported. All cases are investigated and

reported to the Audit Committee.

Corporate Social Responsibility

The Company has a policy of channelling all requests

for donations excluding political donations which

are dealt with directly by the board) and other forms

of Social assistance through its Corporate Social

Responsibility Committee.

During the year under review, Naïade Resorts Ltd

contributed Rs 2.8m in GML Fondation Joseph

Lagesse. We are particularly proud to have contributed

financially in the implementation of numerous projects

in different sectors in which the GML Fondation Joseph

lagesse performs, such as access to health for the

needy, the alleviation of poverty, the re-establishment

of human dignity and particularly the importance of

education and training at different levels. Through this

specific action towards education, Naïade Resorts Ltd

clearly shares the conviction of GML Fondation Joseph

Lagesse deep-rooted to place education as a priority of

its Corporate Social Responsibility.

Green Initiatives

The Company has taken the initiative to further

participate in sustainable tourism development to

reduce its impact on global warming and climate

change. Naïade Resorts is hence involved in various

environmental projects such as recycling of paper,

cooking oil, plastics and waste waters and sea water

desalination. It has also implemented a tree planting

scheme destined to further compensate the amount of

CO2 produced by its activities.

Three of the hotels, namely, Les Pavillons, Beau Rivage

and Legends, have been awarded the Certificate of

Good Environmental Practices by SGS (Mauritius)

in 2010.

Naïade Resorts Ltd also has as objective to completely

offset the amount of CO2 produced by all its properties

and has, hence, set up a “Green Committee”, which is

responsible for the communication and implementation

of all the environmental projects across the Group.

Désiré Elliah

Secretary

Poséidon Limitee

29th September 2011

Corporate Governance(Continued)


Other Statutory Disclosures(Pursuant to Section 221 of the Companies Act 2001)

Main Activities

The main activities of Naïade Resorts Ltd and its

subsidiaries consist of operating and managing hotels.

Results for the year

The Statements of comprehensive income for the year

ended 30th June 2011 are shown on pages 38 and 39.

Revenue of the Company and the Group was Rs. 114

million and Rs. 3,154 million respectively (six month

ended 30th June 2010: Company Rs. 48 million and the

Group Rs. 1,130 million). The Company’s loss for the

year was Rs. 59.8 million (six months ended 30 June

2010: loss of Rs. 35.1 million). The Group reported a

profit after tax of Rs. 11.5 million for the year ended

30th June 2011 (six months ended 30 June 2010: loss of

Rs. 256.8 million).

Dividends

No dividend has been declared in respect of the

financial year ended 30th June 2011.

Directors

The names of the Directors of Naïade Resorts Ltd and its subsidiaries, as at 30th June 2011, are as follows:

Companies Directors

Naïade Resorts Ltd Arnaud Lagesse - Chairman

Jean-Claude Béga


Laurent de la Hogue (appointed on 15.02.11)


Désiré Elliah

Alexis Harel

J. Cyril Lagesse

Stéphane Lagesse

Virginie Corneillet (resigned on 15.02.11)

Patrice Hardy - Managing Director (resigned on 28.02.11)

Jean-Raymond Harel (alternate to Alexis Harel)

Amaury Lagesse (alternate to Stéphane Lagesse)

Hugues Lagesse (alternate to J. Cyril Lagesse)

Dev Poolovadoo (alternate to Désiré Elliah)

Pascal Bertrand (resigned as alternate to Patrice Hardy on 29.10.10)

Virginie Corneillet (resigned as alternate to Jean Claude Béga on 15.02.11)

Laurent de la Hogue (resigned as alternate to Virginie Corneillet on 15.02.11)

Beau Rivage Co Ltd Arnaud Lagesse

Blue Bay Tokey Désiré Elliah

Island Limited Alexis Harel

Les Pavillons Resorts Ltd Paul Jones (appointed on 29.10.10)

La Plantation Limited Patrice Hardy (resigned on 28.02.11)


Other Statutory Disclosures (Continued)

(Pursuant to Section 221 of the Companies Act 2001)

Directors (continued)

Companies Directors

Poséidon Limitée Arnaud Lagesse

Alexis Harel

Paul Jones (appointed on 29.10.10)

Patrice Hardy (resigned on 28.02.11)

FMM Ltée Arnaud Lagesse

LTK Ltd Désiré Elliah

MSF Leisure Paul Jones (appointed on 29.10.10)

Company Ltd Patrice Hardy (resigned on 28.02.11)

NRTA Ltd Nicolas Autrey

Désiré Elliah


Pascal Bertrand (resigned on 29.10.10)

Sylvia Maigrot (resigned on 29.10.10)

Tropical Hotel Ltd Paul Jones (appointed on 02.01.11)

Désiré Elliah (appointed on 02.01.11)

Naïade Resorts Arnaud Lagesse

(UK) Limited Désiré Elliah



Seychelles Ltd Peter Burian

Gemma Mein (appointed on 04.04.11)

Bernadette Suzanne Julie (appointed as alternate to Peter Burian and

Gemma Mein on 04.04.11)

Richard Ramasawmy (resigned on 12.02.11)

Gemma Mein (resigned as alternate to Peter Burian on 04.04.11)


Maldives Ltd Peter Burian

Gemma Mein (appointed on 21.02.11)

Bernadette Suzanne Julie (appointed as alternate to Peter Burian and

Gemma Mein on 21.02.11)

Richard Ramasawmy (resigned on 12.02.11)

Gemma Mein (resigned as alternate to Peter Burian on 21.02.11)



Companies Directors

White Sands Resort & Spa Pvt Ltd Arnaud Lagesse


Robert Ahnee

Leon Liu

Ziyad Bundhun


Désiré Elliah (alternate to Arnaud Lagesse)

Naïade Holidays Paul Jones (appointed on 29.10.10)

(Pty) Ltd Désiré Elliah

Sydney Pierre (resigned on 29.10.10)


Naïade Holidays Ltd Paul Jones (appointed on 29.10.10)

Désiré Elliah


Naïade Foundation Paul Jones (appointed on 29.10.10)

Désiré Elliah

Pascal Bertrand (resigned on 29.10.10)


Holiday & Leisure Arnaud Lagesse

Resorts Limited Paul Jones (appointed on 29.10.10)

Désiré Elliah


Merville Beach Arnaud Lagesse

Hotel Ltd Paul Jones (appointed on 29.10.10)

Merville Limited Désiré Elliah


Hôtel Prestige Réunion Paul Jones (appointed as ‘‘Président’’ on 09.12.10)

Patrice Hardy (resigned as ‘’Président’’ on 09.12.10)





Companies Directors

Les Villas du Lagon Paul Jones (appointed as ‘‘Président Directeur Général’’ and

‘’Administrateur’’ on 09.12.10)

Stéphane Baras (‘‘Administrateur’’ and ‘‘Directeur Général Délégué’’)

Désiré Elliah (‘’Administrateur’’)

Pascal Bertrand (resigned as ‘‘Administrateur’’on 07.12.10)

Patrice Hardy (resigned as ‘’Président Directeur Général’’on 09.12.10)

Société Villages Hôtels Paul Jones (appointed as ‘‘Président Directeur Général’’ and

De l’Océan Indien ‘’Administrateur’’ on 09.12.10)

Stéphane Baras (‘‘Administrateur’’ and ‘‘Directeur Général Délégué’’)

Désiré Elliah (‘’Administrateur’’)

Pascal Bertrand (resigned as ‘‘Administrateur’’on 07.12.10)

Patrice Hardy (resigned as ‘’Président Directeur Général’’on 09.12.10)

Le Récif SAS Paul Jones (appointed as ‘‘Président’’ on 09.12.10)

Stéphane Baras (‘‘Directeur Général’’)

Patrice Hardy (‘’resigned as Président’’on 09.12.10)



Directors’ Service Contract

The Executive Directors of the Group have no service

contract. Their employment is only subject to the

Employment Rights Act and has no expiry date. The

Non-Executive Directors hold no service contract with

the Company and its subsidiaries.

Indemnity Insurance

During the current year, the directors of Naïade Resorts

Ltd and its subsidiaries have renewed the indemnity

insurance cover for directors’/officers’ liability. There is

no indemnity insurance for other employees.

Contract of Significance

During the year under review, there was no contract of

significance.

Directors’ Share Interest

The interests of the Directors in the securities of

the Company, as at 30th June 2011, are disclosed at

page 21.




Directors’ Remuneration and Benefits

Remuneration and benefits (including bonuses and

commissions) received and receivable from the

company and related corporations were as follows:

Year ended 30.06.11 Six months ended 30.06.10

Executive Non-Executive Executive Non-Executive

Rs Rs Rs Rs

The Company 365,000 1,250,000 172,599 757,500

Subsidiary

Poséidon Limitée (note (a))91,624,000 - 14,150,000 -

(a) Includes alternate directors and severance allowance

paid to a director for which the Group has received a

refund of Rs 28 million from the pension fund.

Statement of Directors’ responsibilities in respect

of the preparation of Financial Statements

Financial Statements

For the year under review, the directors report that:

• the financial statements fairly present the state

of affairs of the Group and the Company as at

the end of the financial period and the result of

operations and cash flows for that period;

• the external auditors are responsible for reporting

on whether the financial statements are fairly

presented;

• adequate accounting records and an effective

system of internal controls and risk management

have been maintained;

• appropriate accounting policies supported by

reasonable and prudent judgments and estimates

have been used consistently;

• the financial statements have been prepared

in accordance and comply with International

Financial Reporting Standards;

• the financial statements have been prepared on

the going concern basis;

• they are responsible for safeguarding the assets of

the Group and of the Company; and

• they have taken reasonable steps for the

prevention and detection of fraud and other

irregularities




Donations

Donations were as follows:

Year ended

June 30, 2011

Six months ended

June 30, 2010

Political

Rs

Others

Rs

Political

Rs

Others

Rs

The Company - 13,731 - 11,731

The Subsidiaries

Les Pavillons Resorts Ltd - 60,731 - 11,731

Beau Rivage Co Ltd - 181,123 - 62,292

Poséidon Limitée - - 2,000,000 -

Holiday & Leisure Resorts Limited - 203,462 - 391,231

Blue Bay Tokey Island Limited - 234,824 - -

Auditors

The fees paid to the auditors, for audit and other services were:

The Group The Company

Year ended

June 30, 2011

Six months

ended

June 30, 2010

Year ended

June 30, 2011

Six months

ended

June 30, 2010

Rs Rs Rs Rs

(a) Ernst & Young

Audit services 1,750,000 1,304,800 200,000 170,400

Other services 700,000 250,000 225,000 110,000

Total 2,450,000 1,554,800 425,000 280,400

(a) Other Auditors

Audit services 1,488,750 630,500 - -

Other services - - - -

Total 1,488,750 630,500 - -

By Order of the Board

Arnaud Lagesse Alexis Harel

Chairman Chairman of the Audit Committee

This 29th September 2011


Secretary’s Certificate

We certify that, to the best of our knowledge and belief,

the Company has filed with the Registrar of Companies,

all such returns as are required of the Company under

the Companies Act 2001, in terms of section 166(d).

Désiré Elliah

Poséidon Limitée

Secretary

This 29th September 2011


Independent Auditors’ Report to the Members

Opinion

In our opinion, the financial statements on pages 37 to 96 give a true and fair view of the financial position of the Company and the Group at June 30, 2011 and of their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards and comply with the Companies Act 2001.

Other matter

This report, including the opinion, has been prepared for and only for the Company’s members, as a body, in accordance with Section 205 of the Companies Act 2001 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Report on Other Legal and Regulatory Requirements

Companies Act 2001

We have no relationship with or interests in the Group and the Company other than in our capacities as auditors and tax advisors, and dealings in the ordinary course of business.

We have obtained all the information and explanations we have required.

In our opinion, proper accounting records have been kept by the Company as far as appears from our examination of those records.

The Financial Reporting Act

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

Ernst & Young Li Kune Lan Pookim, A.C.A, F.C.C.A.

Ebène, Mauritius

29 September 2011

Report on the Financial Statements

We have audited the financial statements of Naiade Resorts Ltd (the “Company”) and its subsidiaries (together referred to as the “Group”) on pages 37 to 96 which comprise the statements of financial position as at June 30, 2011 and the statements of comprehensive income, statements of changes in equity and statements of cash flows for the year then ended and a summary of significant accounting policies and other explanatory notes.

Directors’ Responsibility for the Financial Statements

The 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 Companies Act 2001, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

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


Statements of Financial Position as at June 30, 2011

Notes THE GROUP THE COMPANY

2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

AssetsNon-current assetsProperty, plant and equipment 4 7,720,305 5,747,713 106,360 237,439Intangible assets 5 1,139,583 401,871 - 719Investment in subsidiary companies 6 - - 1,449,321 1,449,321Investment in associated companies 7 194,058 464,443 - -Other financial assets 8 57,232 77,515 58 58Deferred tax assets 9 19,733 27,933 - -Retirement benefit asset 10 12,277 6,592 - -

9,143,188 6,726,067 1,555,739 1,687,537

Current assetsInventories 11 100,345 61,621 - 1,648Trade and other receivables 12 726,162 1,244,806 2,870,541 2,225,476Cash and short term deposits 31 (a) 233,810 113,577 84,803 54,606

1,060,317 1,420,004 2,955,344 2,281,730

Non-current assets classified as held for sale 13 132,715 379,203 132,715 -

Total Assets 10,336,220 8,525,274 4,643,798 3,969,267

Equity and Liabilities

Capital and reservesIssued capital 14 1,140,346 862,568 1,140,346 862,568Share premium 391,819 194,386 391,819 194,386Treasury shares 14 (18,081) (18,081) (18,081) (18,081)Other reserves 15 1,339,963 1,469,091 114,318 114,462Retained earnings 550,936 487,573 265,796 325,619

Equity attributable to the owners of the parent 3,404,983 2,995,537 1,894,198 1,478,954Non-controlling interests 16 87,724 - - -

Total Equity 3,492,707 2,995,537 1,894,198 1,478,954

Non-current liabilitiesInterest bearing loans and borrowings 17 4,722,196 3,277,805 1,121,451 598,086Deferred tax liabilities 9 323,535 323,892 24,399 25,166Retirement benefit obligations 10 32,497 27,612 654 654Government grants 18 20,764 11,428 - -

5,098,992 3,640,737 1,146,504 623,906Current liabilitiesInterest bearing loans and borrowings 17 927,829 1,201,502 232,597 745,924Trade and other payables 19 800,354 687,278 1,370,499 1,120,483 Current tax liabilities 20 (d) 16,338 220 - -

1,744,521 1,889,000 1,603,096 1,866,407

Total liabilities 6,843,513 5,529,737 2,749,600 2,490,313

Total Equity and Liabilities 10,336,220 8,525,274 4,643,798 3,969,267

These financial statements have been approved for issue by the board of directors on September 29, 2011.

The notes set out on pages 42 to 96 form an integral part of these financial statements.

Auditors’ report on page 36.

Arnaud Lagesse Alexis HarelChairman Chairman of the Audit Committee


Statements of Comprehensive Income - Year ended June 30, 2011

THE GROUP THE COMPANY

Notes Year Six months Year Six months ended ended ended ended June 30, June 30, June 30, June 30, 2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Continuing operations

Sale of goods and services 21 2,980,045 1,082,891 - -Finance revenue 22 24,068 18,530 114,456 48,564Other operating income 23 149,502 29,181 - -

Revenue 3,153,615 1,130,602 114,456 48,564

Cost of inventories 24 581,843 187,778 - -Employee benefits expense 25 944,384 418,284 - -Other operating expenses 26 941,379 428,870 3,681 3,770

2,467,606 1,034,932 3,681 3,770Earnings before interest, tax and depreciation and amortisation 686,009 95,670 110,775 44,794Depreciation and amortisation 27 251,843 107,601 2,824 371

Operating profit/(loss) 28 434,166 (11,931) 107,951 44,423Finance costs 29 (322,794) (151,295) (167,743) (76,970)Share of results in associated companies 7 (66,372) (61,990) - -

Profit/(loss) before tax 45,000 (225,216) (59,792) (32,547)Income tax expense/(credit) 20 32,963 29,964 (500) 854

Profit/(loss) from continuing operations 12,037 (255,180) (59,292) (33,401)

Discontinued operation

Loss after tax from discontinued operation 13 (531) (1,714) (531) (1,714)

Profit/(loss) for the year/period 11,506 (256,894) (59,823) (35,115)

Profit/(loss) for the year/period attributable to:- Owners of the Company 6,559 (256,894) (59,823) (35,115)- Non-Controlling interests 4,947 - - -

11,506 (256,894) (59,823) (35,115)

Earnings/(Loss) per share attributable to ordinary equity holders of the parentFrom continuing and discontinued operations

Basic (Rs) 30 0.07 (2.77)

Fully diluted (Rs) 30 0.07 (2.77)

From Continuing operations

Basic (Rs) 30 0.07 (2.75)

Fully diluted (Rs) 30 0.07 (2.75)

The notes set out on pages 42 to 96 form an integral part of these financial statements. Auditors’ report on page 36.




Profit/(loss) for the year/period 11,506 (256,894) (59,823) (35,115)

Other Comprehensive income

Exchange difference on translationof foreign operations 15 (86,279) (10,270) - -Gain on fair value of available-for-sale investments 8 - 1,257 - -Gain realised on disposal of available-for-sale-investments 15 (11,656) (1,522) - -Cash flow hedge movement 15 29,698 (29,969) (144) -Hedge reserve realised on repayment of borrowings 15 (2,292) - - -Share of reserves in associated companies 7 (9,541) 30,000 - -Income tax relating to components of other comprehensive income 9 1,481 - - -Other comprehensive income for the year/period net of tax (78,589) (10,504) (144) -

Total comprehensive income for the year/period (67,083) (267,398) (59,967) (35,115)

Other comprehensive income attributable to:- Owners of the Company (72,324) (10,504) (144) -- Non-Controlling interests (6,265) - - -

(78,589) (10,504) (144) -

Total comprehensive income attributable to:- Owners of the Company (65,765) (267,398) (59,967) (35,115)- Non-Controlling interests (1,318) - - -

(67,083) (267,398) (59,967) (35,115)


Statements of Comprehensive Income - Year ended June 30, 2011


Statements of Changes In Equity - Year ended June 30, 2011

Attributable to the equity holders of the parent

Issued Treasury Other Attributable to Non- capital Share shares reserves Retained owners of ControllingTHE GROUP (Note 14) premium (Note 14) (Note 15) earnings the Parent Interests Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

At January 1, 2010 862,568 194,386 (18,081) 1,479,595 744,467 3,262,935

Other comprehensive income for the period - - - (10,504) - (10,504)Loss for the period - - - - (256,894) (256,894)Total comprehensive income for the period - - - (10,504) (256,894) (267,398)

At June 30, 2010 862,568 194,386 (18,081) 1,469,091 487,573 2,995,537

At July 1, 2010 862,568 194,386 (18,081) 1,469,091 487,573 2,995,537 - 2,995,537

Other comprehensive income for the year - - - (72,324) - (72,324) (6,265) (78,589)Profit for the year - - - - 6,559 6,559 4,947 11,506

Total comprehensive income for the year - - - (72,324) 6,559 (65,765) (1,318) (67,083)Revaluation surplus reserve realised on disposal - - - (56,804) 56,804 - - -Non-controlling interest arising on acquisition of subsidiary - - - - - - 89,042 89,042Issue of shares 277,778 222,222 - - - 500,000 - 500,000Share issue costs - (24,789) - - - (24,789) - (24,789)

At June 30, 2011 1,140,346 391,819 (18,081) 1,339,963 550,936 3,404,983 87,724 3,492,707

Issued Share Treasury Revaluation Retained capital premium shares reserves earnings Total

THE COMPANY (Note 14) (Note 14) Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

At January 1, 2010 862,568 194,386 (18,081) 114,462 360,734 1,514,069

Loss for the period - - - - (35,115) (35,115)

Total comprehensive income for the period - - - - (35,115) (35,115)

At June 30, 2010 862,568 194,386 (18,081) 114,462 325,619 1,478,954

At July 1, 2010 862,568 194,386 (18,081) 114,462 325,619 1,478,954

Other comprehensive income for the year - - - (144) - (144)Loss for the year - - - - (59,823) (59,823)

Total comprehensive income for the year - - - (144) (59,823) (59,967)Issue of shares 277,778 222,222 - - - 500,000 Share issue costs - (24,789) - - - (24,789)

At June 30, 2011 1,140,346 391,819 (18,081) 114,318 265,796 1,894,198



Statements of Cash Flows - Year ended June 30, 2011



Operating Activities

Cash from operationsProfit/(loss) before taxation from continuing operations 45,000 (225,216) (59,792) (32,547)Adjustments for:- Loss before tax from discontinued operations (577) (1,898) (577) (1,898)- Negative goodwill arising on acquisition of subsidiary (60,669) - - -- Share of results of associates 7 66,372 61,990 - -- Foreign exchange differences (2,293) (6,356) - (25,500)- Depreciation and amortisation 255,008 110,534 5,989 3,304- (Profit)/loss on disposal of property, plant and equipment (10,545) 174 - 40- Gain on disposal of available-for-sale investment (7,957) (1,522) - -- Retirement benefit obligations (842) 1,157 - 69- Interest income (24,093) (18,606) (114,456) (48,640)- Interest expense 328,833 155,085 167,743 80,760

588,237 75,342 (1,093) (24,412)Changes in working capital:- Inventories 12,293 7,049 1,648 499- Trade and other receivables 367,276 (60,325) (640,565) (186,144)- Trade and other payables 219,663 49,583 250,016 101,765

Cash generated from operations 1,187,469 71,649 (389,994) (108,292)Interest received 24,093 18,606 114,456 48,640Income tax paid 20(d) (6,881) (23,257) (221) (10)Interest paid (328,833) (155,085) (167,743) (80,760)

Net cash flows from/(used in) operating activities 875,848 (88,087) (443,502) (140,422)

Investing Activities

Purchase of shares in subsidiary 31(c) (723,793) - - -Purchase of property, plant and equipment 31(b) (99,580) (18,914) (6,906) (8,345)Purchase of intangible assets 5 (56,873) (3,729) - (93)Proceeds from sale of available-for-sale investment 22,272 3,617 - -Proceeds from sale of assets held for sale - 11,708 - -Proceeds from sale of property, plant and equipment 71,265 79 - -

Net cash flows used in investing activities (786,709) (7,239) (6,906) (8,438)

Financing Activities

Payments of long term borrowings (666,462) (46,701) (193,053) -Repayment of obligation under finance leases (6,717) (3,445) - -Issue of shares net of issue costs 475,211 - 475,211 -Issue of convertible bonds 17 500,000 - 500,000 -

Net cash flows from/(used in) financing activities 302,032 (50,146) 782,158 -

Net increase/(decrease) in cash and cash equivalents 391,171 (145,472) 331,750 (148,860)At July/January 1, (472,969) (324,885) (352,221) (203,361)Net foreign exchange difference (3,669) (2,612) - -

At June 30, 31(a) (85,467) (472,969) (20,471) (352,221)

The notes set out on pages42 to 96 form an integral part of these financial statements. Auditors’ report on page 36.


Notes to the Financial Statements - Year ended June 30, 2011

1 CORPORATE INFORmATION

Naïade Resorts Ltd is a public Company incorporated in Mauritius and its shares are listed on the Stock Exchange of Mauritius. Its registered office is situated at 58, Pierre Simonet Street, Floréal. The main activity of the Group and the Company is the operation and management of resort hotels.

2 ACCOuNTINg POLICIES

2.1 BAsis Of PREPARATiON

The consolidated and separate financial statements have been prepared on a historical cost basis as modified by the revaluation of land and buildings and available-for-sale investments which are stated at their fair values as disclosed in the accounting policies hereafter. The consolidated and separate financial statements are presented in Mauritian rupees and all values are rounded to the nearest thousand (Rs’000) except when otherwise indicated.

Statement of Compliance

The consolidated and separate financial statements of Naïade Resorts Ltd and its subsidiaries have been prepared in accordance with International Financial Reporting Standards (IFRSs).

Basis of consolidation

The consolidated financial statements comprise the financial statements of Naïade Resorts Ltd and its subsidiaries as at June 30 each year. The financial statements of the subsidiaries are prepared for the same reporting period as the parent Company, using consistent accounting policies.

All intra-group balances, transactions, unrealized gains and losses resulting from intra-group transactions and dividends, are eliminated in full.

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:

• Derecognises the assets (including goodwill) andliabilities of the subsidiary

• Derecognises the carrying amount of any non-controlling interest

• Derecognises the cumulative translationdifferences,recorded in equity

• Recognisesthefairvalueoftheconsiderationreceived

• Recognisesthefairvalueofanyinvestmentretained

• Recognisesanysurplusordeficitinprofitorloss

• Reclassifiestheparent’sshareofcomponentspreviouslyrecognised in other comprehensive income to profit or loss or retained earnings, as appropriate.

2.2 CHANGEs iN ACCOUNTiNG POliCiEs

The accounting policies adopted are consistent with those of the previous financial year except as follows: The Group has adopted the following new and amended IFRS and IFRIC interpretations as of 1 July 2010:

• AmendmentstoIFRS2–Sharebasedpayment–Groupcash settlement-effective for annual periods beginning on or after January 01, 2010

• IAS 32 – Financial Instruments (amendment) –Classification of Rights Issues-effective for annual periods beginning on or after February 01, 2010

• IFRIC19–ExtinguishingFinancialLiabilitieswithEquityInstruments-effective for annual periods beginning on or after July 01, 2010

• ImprovementstoIFRS

The adoption of the standards and interpretations is described below:

Amendments to IFRS 2 – Share based payment – group cash settlement

The amendments clarify the scope of IFRS 2, as well as the accounting for group cash-settled share-based payment transactions in the separate (or individual) financial statements of an entity receiving the goods or services when another group entity or shareholder has the obligation to settle the award. It did not have an impact on the financial position or performance of the Group.


Notes to the Financial Statements - Year ended June 30, 2011

2 ACCOuNTINg POLICIES (continued)

2.2 CHANGEs iN ACCOUNTiNG POliCiEs (continued)

IAS 32 – Financial Instruments (amendment) – Classification of Rights Issues

The amendments to IAS 32 titled Classification of Rights Issues address the classification of certain rights issues denominated in a foreign currency as either an equity instrument or as a financial liability. It did not have an impact on the financial position or performance of the Group.

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

The interpretation clarifies that equity instruments issued to a creditor to extinguish a financial liability qualify as consideration paid. The equity instruments issued are measured at their fair value. In case that this cannot be reliably measured, the instruments are measured at the fair value of the liability extinguished. Any gain or loss is recognised immediately in profit or loss. It did not have an impact on the financial position or performance of the Group.

Improvements to IFRSs

In April 2009 and May 2010, the IASB issued omnibus of amendments to its standards, primarily with a view to removing inconsistencies and clarifying wording. There are separate transitional provisions for each standard. The adoption of the following amendments resulted in changes to accounting policies but did not have any impact on the financial position or performance of the Group.

Issued in April 2009

IFRS 8 Operating segments-effective for annual periods beginning on or after January 01, 2010

Segments assets and liabilities need only be reported when those assets and liabilities are included in measures used by the chief operating decision maker.

IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations (amendment) - effective for annual periods beginning on or after January 01, 2010

The amendments to IFRS 5 clarify that the disclosure requirements in IFRSs other than IFRS 5 do not apply to non-current assets (or disposal groups) classified as held for sale or discontinued operations unless those IFRSs require (i) specific disclosures in respect of non-current assets (or disposal groups) classified as held for sale or discontinued operations, or (ii) disclosures

about measurement of assets and liabilities within a disposal group that are not within the scope of the measurement requirement of IFRS 5 and the disclosures are not already provided in the consolidated financial statements.

IAS 1 Presentation of Financial Statements (amendment)-effective for annual periods beginning on or after January 01, 2010

The amendments to IAS 1 clarify that the potential settlement of a liability by the issue of equity is not relevant to its classification as current or non-current.

In line with the revised standard, the Group has classified the liability component of convertible notes issued in the current year as non-current based on when cash settlement is required to be made. This amendment has had no effect on the amounts reported in prior years because the Group has not previously issued instruments of this nature. The amendment had no impact on the financial statements.

IAS 7 - Statement of Cash Flows (amendment)-effective for annual periods beginning on or after January 01, 2010

The amendments to IAS 7 specify that only expenditures that result in a recognised asset in the statement of financial position can be classified as investing activities in the statement of cash flows. This amendment did not have any impact on the statement of cash flows.

IAS 17 – Leases (amendment)-effective for annual periods beginning on or after January 01, 2010

It removes specific guidance regarding classification of leases of land, so as to eliminate inconsistency with the general guidance on lease classification. As a result, leases of land should be classified as either finance or operating using the general principles of IAS 17. Amendments to be applied retrospectively to existing leases if the necessary information is available at the inception of the lease. Otherwise land leases should be reassessed on the date of adoption of the amendment. The amendment had no impact on the financial statements.

IAS 36 - Impairment of Assets-effective for annual periods beginning on or after January 1, 2010

The largest unit permitted for allocating goodwill acquired in a business combination is the operating segment defined in IFRS 8 before aggregation for reporting purposes. The amendment had no impact on the financial statements.


Notes to the Financial Statements - Year ended June 30, 2011(Continued)


2.2 CHANGEs iN ACCOUNTiNG POliCiEs (continued)

IAS 39 - Amendments to IAS 39 Financial Instruments: Recognition and measurement – Eligible Hedged Items-effective for annual periods beginning on or after January 1, 2010

The amendments provide clarification on two aspects of hedge accounting: identifying inflation as a hedged risk or portion, and hedging with options. The amendment had no impact on the financial statements.

Issued in May 2010

IFRS 3 - Business Combinations effective for annual periods beginning on or after July 1, 2010

The amendments address measurement of non-controlling interests, un-replaced and voluntary replaced share-based payment awards and transitional requirements for contingent consideration from a business combination that occurred before the effective date of the revised IFRS. It did not have an impact on the financial position or performance of the Group.

IAS 27 - Consolidated and Separate Financial Statements effective for annual periods beginning on or after July 1, 2010

The standard clarifies that the amendments made to IAS 21 -The Effects of Changes in Foreign Rates, IAS 28 Investments in Associates and IAS 31 Interests in Joint Ventures as a result of IAS 27(2008) should be applied prospectively (with the exception of paragraph 35 of IAS 28 and paragraph 46 of IAS 31, which should be applied retrospectively). The change in accounting policy was applied prospectively. It did not have an impact on the financial position or performance of the Group.

2.3 sTANdARds issUEd BUT NOT YET EffECTivE

Standards issued but not yet effective up to the date of issuance of the Group’s financial statements are listed below. This listing is of standards and interpretations issued, which the Group reasonably expects to be applicable at a future date. The Group intends to adopt those standards when they become effective and the directors do not anticipate that these amendments will have a significant effect on the group’s disclosure nor on the amounts reported.

Amendments to IFRS 7 – Financial Instruments: Disclosures-Transfers of Financial assets effective as of January 01, 2011

These amendments, effective for annual periods beginning on or after July 1, 2011, require enhancements to the existing disclosures in IFRS 7 where an asset is transferred but is not recognised but the entity continues to have a continuing exposure to the asset after the sale. These amendments are intended to provide greater transparency around risk exposures of transactions where a financial asset is transferred but the transferor retains some level of continuing exposure (referred to as ‘continuing involvement’) in the asset. The amendments also require disclosure where transfers of financial assets are not evenly distributed throughout the period (e.g., where transfers occur near the end of a reporting period). This is intended to create transparency around transactions that may be motivated by window dressing.

IFRS 9 - Financial Instruments effective as of January 01, 2015

IFRS 9 as issued reflects the first phase of the IASBs applies to classification and measurement of financial instruments within the scope of IAS 39. The standard is effective for annual periods beginning on or after January 1, 2015. In subsequent phases, the IASB will address impairment of financial instruments and hedge accounting with a view to replacing IAS 39 in its entirety.

IFRS 10- Consolidated Financial Statements effective as of January 01, 2013

The objective of the standard is to have a single basis for consolidation for all entities regardless of the nature of the investee, and that basis is control. The definition of control includes three elements: power over an investee, exposure or rights to variable returns of the investee and the ability to use power over the investee to affect the investor’s returns. It provides detailed guidance on how to apply the control principle in a number of situations, including agency relationships and holdings of potential voting rights. An investor would reassess whether it controls an investee if there is a change in facts and circumstances. This standard replaces those parts of IAS 27 that address when and how an investor should prepare consolidated financial statements and replaces SIC-12 in its entirety. The standard is effective for annual periods beginning on or after January 1, 2013, with early application permitted.




2.3 sTANdARds issUEd BUT NOT YET EffECTivE (continued)

IFRS 11 - Joint Arrangements effective as of January 1, 2013

The standard classifies joint arrangements as either joint operations (combining the existing concepts of jointly controlled assets and jointly controlled operations) or joint ventures (equivalent to the existing concept of a jointly controlled entity). It requires the use of equity method of accounting for interests in joint ventures thereby eliminating the proportionate consolidation method. The determination of as to whether a joint arrangement is a joint operation or a joint venture is based on the parties’ rights and obligations under the arrangement, with the existence of a separate legal vehicle, no longer being the key factor. The standard is effective for annual periods beginning on or after January 1, 2013, with early application permitted.

IFRS 12 - Disclosures of Interests in Other Entities effective as of January 1, 2013

The standard applies to entities that have an interest in subsidiaries, joint arrangements, associates or unconsolidated structures entities. It establishes disclosure objectives and specifies minimum disclosures that an entity must provide to meet those objectives. An entity should disclose information that helps users of its financial statements evaluate the nature of and risks associated with its interests in other entities and the effects of those interests on its financial statements. The disclosure requirements are extensive and significant effort may be required to accumulate the necessary information.

IFRS 13 - Fair value measurement effective as of January 1, 2013

The standard establishes a single framework for measuring fair value where that is required by other standards. The Standard applies to both financial and non-financial items measured at fair value. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date” (i.e., an exit price).

Amendments to IAS 1 – Presentation of Financial Statements effective as of January 01, 2011

The amendments retain the option to present profit or loss and other comprehensive income in either

a single continuous statement or in two separate but consecutive statements. Items of the other comprehensive income are required to be grouped into those that will and will not subsequently be reclassified to profit or loss. Tax in items of other comprehensive income is required to be allocated on the same basis. The measurement and recognition of items of profit or loss and other comprehensive income are not affected by the amendments.

Amendments to IAS 12 – Income Taxes effective as of 1 January 2012

The amendment provides that, in specified circumstances, the measurement of deferred tax liability and deferred tax asset should reflect rebuttable presumption that the carrying amount of the underlying asset will be recovered entirely by sale.

IAS 24 – Related party disclosures (revised) effective as of 1 January 2011

The amendment modifies the definition of a related party and simplifies the disclosure for government-related entities.

IFRIC 14 – Limit on a defined benefit asset, minimum Funding Requirements and their Interaction (amendment) – Prepayments of a minimum Funding Requirement effective as of 1 January 2011

It provides guidance on assessing the recoverable amount of a net pension asset. The amendment permits an entity to treat the prepayment of a minimum funding requirement as an asset. The amendment to IFRIC 14 is effective for annual periods beginning on or after January 1, 2011 with retrospective application.

Improvements to IFRSs (issued in May 2010)

The IASB issued Improvements to IFRSs, an omnibus of amendments to its IFRS standards. The amendments have not been adopted as they became effective for annual periods on or after January 1, 2011. The topics addressed by these amendments are listed below:

IFRS 1 First-time Adoption of IFRS: effective for annual periods beginning on or after January 1, 2011

The amendments deal with accounting policy changes in the year of adoption, revaluation basis as deemed cost and the use of deemed cost for operations subject to rate regulations.




2.3 sTANdARds issUEd BUT NOT YET EffECTivE (continued)

IFRS 7 Financial Instruments: Disclosures: effective for annual periods beginning on or after January 1, 2011, encourages qualitative disclosures in the context of the quantitative disclosure required; clarifies the required level of disclosure around credit risk and collateral held and provides relief from disclosure of renegotiated loans.

IAS 1 Presentation of Financial Statements: effective for annual periods beginning on or after January 1, 2011, clarifies that an entity may present the analysis of other comprehensive income by item either in the statement of changes in equity or in the notes to the financial statements.

IAS 34 Interim Financial Reporting: effective for annual periods beginning on or after January 1, 2011, emphasises the principle in IAS 34 that the disclosure about significant events and transactions in interim periods should update the relevant information presented in the most recent annual financial report.

IFRIC 13 Customer Loyalty Programmes: effective for annual periods beginning on or after January 1, 2011, clarifies the meaning of ‘fair value’ in the context of measuring of award credits.

2.4 sUMMARY Of siGNifiCANT ACCOUNTiNG POliCiEs

(a) Foreign currency translation

The consolidated and separate financial statements are presented in Mauritian Rupee, which is the parent’s functional and presentation currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Transactions in foreign currencies are initially recorded in the functional currency at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated to the functional currency at the rate of exchange ruling at the reporting date. All differences are taken to profit or loss with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken to other comprehensive income until the disposal of the net investment, at which time they are recognised in profit or loss. Tax charges and credits attributable to exchange differences on those borrowings are also dealt with in

other comprehensive income. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Where the functional currency of the subsidiaries at the reporting date is not the presentation currency of the Group (the Mauritian Rupee), the assets and liabilities of these subsidiaries are translated into Mauritian Rupee at the rate of exchange ruling at the reporting date and, income and expenses are translated at the weighted average exchange rates for the year. The exchange differences arising on the translation are taken through other comprehensive income. On disposal of a foreign entity, the deferred cumulative amount recognised in other comprehensive income relating to that particular foreign operation is recognised in profit or loss.

(b) Property, plant and equipment

All property, plant and equipment are initially recorded at cost. Land and buildings are subsequently shown at fair value, based on subsequent valuations by external independent valuers, less subsequent depreciation for property and impairment losses recognised after the date of revaluation. All other property, plant and equipment are stated at historical cost less depreciation and impairments.

Increases in the carrying amount arising on revaluation are credited to revaluation reserve in equity. Decreases that offset previous increases of the same asset are charged through other comprehensive income against the revaluation reserve to the extent that the decrease does not exceed the amount held in the revaluation reserve in respect of that same asset; all other decreases are charged to the profit or loss.

The carrying values of property, plant and equipment are reviewed for impairment at each reporting date or when events or changes in circumstances indicate that the carrying value may not be recoverable.

Gains and losses on disposal of property, plant and equipment are determined by reference to their carrying amount and are taken into account in determining operating profit. On disposal of revalued assets, amounts in revaluation and other reserves relating to that asset are transferred to retained earnings.




2.4 sUMMARY Of siGNifiCANT ACCOUNTiNG POliCiEs (continued)

(b) Property, plant and equipment (continued)

Depreciation is calculated on the straight line method to write off the cost of each asset, or the revalued amounts, to their residual values over their estimated useful lives. The useful life, residual value and method of depreciation of an item of property, plant and equipment are reviewed at each financial year end and adjusted prospectively if appropriate. The residual values and remaining useful lives of buildings have been estimated by the independent external valuers.

The annual rate of depreciation is as follows:

Buildings - 2%–9.45%Plant and equipment - 10% - 20%Furniture and fittings - 10% - 33.33%Motor vehicles - 20%Computer equipment - 10% - 33.33%

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

(c) Investments in subsidiaries

Financial statements of the Company

Investments in subsidiary companies are carried at cost which is the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the acquirer, in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The carrying amount is reduced to recognise any impairment in the value of individual investments. The impairment loss is taken to profit or loss.

Consolidated financial statements

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. Business combinations are accounted for using the purchase method of accounting.

(d) Investments in associates

Associated companies are entities in which the Company or the Group has significant influence but which are neither a subsidiary nor a joint venture of the Company or the Group.

Financial statements of the Company

Investments in associates are carried at cost. The carrying amount is reduced to recognise any impairment in the value of individual investments. The impairment loss is taken to profit or loss.

Consolidated financial statements

The Group’s investments in associated companies are accounted for using the equity method of accounting. The amount recognized in profit or loss reflects the Group’s share of the results of operations of associated companies. The investment in associate is carried in the Statement of Financial Position at cost plus post-acquisition changes in the Group’s share of net assets of the associated companies, less any impairment loss. The Group’s investment in its associate includes goodwill on acquisition, which is treated in accordance with the accounting policy for goodwill stated further below.

Where there has been a change recognised in other comprehensive income of the associate, the Group recognises its share of any changes and discloses this, when applicable, in other comprehensive income.

When the Group’s share of losses exceeds the carrying amount of the investment, the investment is reported at nil value and recognition is discontinued except to the extent of the Group’s commitment on behalf of the associated company.





(e) Intangible assets

Goodwill

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.

For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units. Each unit or group of units to which the goodwill is so allocated:

• representsthelowestlevelwithintheGroupatwhichthe goodwill is monitored for internal management purposes; and

• is not larger than a segment based on either theGroup’s primary or the Group’s secondary reporting format determined in accordance with IFRS 8 Segment Reporting.

Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cash-generating units), to which the goodwill relates. Where the recoverable amount of the cash-generating unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognised. Where goodwill forms part of a cash-generating unit (group of cash-generating units) and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.

Negative goodwill represents the excess of the acquirer’s interest in the fair values of the identifiable net assets and liabilities acquired over the cost of acquisition. It is recognised immediately as income in the statement of comprehensive income.

Negative goodwill arising from the acquisition of an associated company is included as income in the determination of the Group’s share of the associate’s profit or loss of the period in which the associate was acquired.

Other intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is the fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is charged against profits in the year in which the expenditure is incurred. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in profit or loss in the expense category consistent with the function of the intangible asset. The estimated useful lives of intangible assets with finite useful lives are as follows:

Computer software - 5 years Leasehold rights - over the period of the leases.

Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash-generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indefinite life is reviewed annually to determine whether indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is made on a prospective basis.





(f) Trade and other receivables

Trade and other receivables are initially recognised at original invoice amount and are subsequently carried at amortised cost using the effective interest method less any allowance for impairment. Gains and losses are recognised through profit or loss when the receivables are derecognised or impaired, as well as through the amortisation process.

(g) Derivative financial instruments

The Group sometimes uses forward contracts to hedge its risks associated with foreign currency fluctuations. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.

Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship. There were no forward contract transactions during the year.

(h) Other financial assets

Financial assets within the scope of IAS 39 are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Group determines the classification of its financial assets after initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year-end.

All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date that the Group commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace.

The Group and the Company has the following investment:

Available-for-sale financial assets

Available-for-sale financial assets are those non-derivative financial assets that are designated as available-for-sale or are not loans and receivables, held-to-maturity investments or investments held at fair value through profit and loss. After initial recognition available-for sale financial assets are measured at fair value with gains or losses being recognised in other comprehensive income until the investment is derecognised or until the investment is determined to be impaired at which time the cumulative gain or loss previously reported in other comprehensive income is included in profit or loss.

The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the reporting date. For investments where there is no active market, fair value is determined using valuation techniques. Such techniques include using recent arm’s length market transactions; reference to the current market value of another instrument, which is substantially the same; discounted cash flow analysis and option pricing models.

(i) Cash and cash equivalents

Cash and short-term deposits in the Statement of Financial Position comprise cash at banks and in hand and short-term deposits with an original maturity of three months or less.

For the purpose of the consolidated and separate statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. Such financial assets are carried at amortised cost using the effective interest rate method.





(j) Financial liabilities

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.

Repurchase of the Company’s own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.

Financial liabilities

initial recognition and measurement

Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit or loss (FVTPL), loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, plus directly attributable transaction costs. The Group’s financial liabilities include trade and other payables, bank overdrafts and loans and borrowings.

subsequent measurement

The measurement of financial liabilities depends on their classification as follows:

financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term.

loans and borrowings

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the income statement

when the liabilities are derecognised as well as through the effective interest rate method (EIR) amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in profit or loss.

(k) Derecognition of financial assets and liabilities

Financial assets

A financial asset (or, where applicable a part of a financial asset or part of a Group of similar financial assets) is derecognised where:

• the rights to receivecash flows fromtheassethaveexpired;

• the Company or the Group retains the right toreceive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass-through’ arrangement; or

• theCompanyor theGrouphas transferred its rightsto receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Where the Company or the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Company’s or the Group’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company or the Group could be required to repay.

Where continuing involvement takes the form of a written and/or purchased option (including a cash-settled option or similar provision) on the transferred asset, the extent of the Group’s continuing involvement is the amount of the transferred asset that the Group may repurchase, except that in the case of a written put option (including a cash-settled option or similar provision) on an asset measured at fair value, the extent of the Group’s continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price.





(k) Derecognition of financial assets and liabilities (continued)

Financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

(l) Impairment of financial assets

The Group assesses at each reporting date whether a financial asset or group of financial assets is impaired.

Assets carried at cost

If there is objective evidence that an impairment loss on an unquoted equity instrument that is not carried at fair value because its fair value cannot be reliably measured, or on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.

Available-for-sale financial assets

If an available-for-sale asset is impaired, if there is objective evidence of a significant or prolonged decline in the fair value of the investment below its cost, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, the cumulative loss is transferred from other comprehensive income to profit or loss. Reversals in respect of equity instruments classified as available-for-sale are not recognised in profit or loss. Reversals of impairment losses on debt instruments are reversed through profit or loss, only if the increase in fair value of the instrument can be objectively related to an event occurring after the impairment loss was recognised in profit or loss.

Trade and other receivables

For amounts due from customers carried at amortised cost, the Group first assesses individually whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are individually not significant. If the Group determines that no objective evidence of impairment exists for individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment.

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in profit or loss.

(m) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the consolidated and separate statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

(n) Fair Value of Financial Instrument

The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices, without any deduction for transaction costs. For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may include using recent arm’s length market transactions; reference to the current fair value of another instrument that is substantially the same; a discounted cash flow analysis or other valuation models.





(o) Hedge Accounting

For the purpose of hedge accounting, hedges are classified as:

• fairvaluehedgeswhenhedgingtheexposuretochangesin the fair value of a recognised asset or liability or an unrecognised firm commitment (except for foreign currency risk); or

• cashflowhedgeswhenhedgingexposuretovariabilityin cash flows that is either attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognised firm commitment; or

• hedgesofanetinvestmentinaforeignoperation.

At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which the Group wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge.

The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument’s effectiveness in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated.

The Group currently has only cash flow hedges which are accounted for as follows:

The effective portion of the gain or loss on the hedging instrument is recognised directly in other comprehensive income, while any ineffective portion is recognised immediately in profit or loss.

Amounts taken to other comprehensive income are transferred to profit or loss when the hedged transaction affects profit or loss, such as when the hedged financial income or financial expense is recognised or when a forecast sale occurs. Where the hedged item is the cost of a non-financial asset or non-financial liability,

the amounts taken to other comprehensive income are transferred to the initial carrying amount of the non-financial asset or liability.

If the forecast transaction or firm commitment is no longer expected to occur, amounts previously recognised in other comprehensive income are transferred to profit or loss. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, amounts previously recognised in other comprehensive income remain in either comprehensive income until the forecast transaction or firm commitment affects profit or loss.

The Group uses 2 loans included in non-current liabilities as hedges of its exposure to dividend flows from foreign entities. Furthermore, the Group has 2 other loans in non-current liabilities denominated in EURO as hedges of its exposure to cash flows in EURO.

(p) Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment has been affected. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses of continuing operations are recognised in profit or loss in those expense categories consistent with the function of the impaired asset.





(p) Impairment of non-financial assets (continued)

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

(q) Inventories

Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and condition are accounted for on a weighted average cost basis.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

(r) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in profit or loss net of any reimbursement. If the effect of the time value of money

is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

(s) Retirement Benefit Obligations

The Group operates a defined benefit plan for some of its employees. For the remaining employees, the Group contributes to a unitised defined contribution pension scheme that was established on July 1, 2002. The employer contributes 9% of salaries less their contribution to the National Pensions Scheme in respect of members of the fund. Members contribute 6% of salaries less their contribution to the National Pensions Scheme. In each case the minimum monthly contribution is Rs.100.

Defined benefits schemes

The cost of providing benefits under the defined benefit plans is determined using the projected unit credit actuarial valuation method. Actuarial gains and losses are recognised as income or expense when the net cumulative unrecognised actuarial gains and losses at the end of the previous reporting year exceeded 10% of the higher of the defined benefit obligation and the fair value of plan assets at that date. These gains or losses are recognised over the expected average remaining working lives of the employees participating in the plans.

The past service cost is recognised as an expense on a straight-line basis over the average period until the benefits become vested. If the benefits are already vested immediately following the introduction of, or changes to, a pension plan, past service cost is recognised as an expense immediately.

The defined benefit liability is the aggregate of the present value of the defined benefit obligation and actuarial gains and losses not recognised reduced by past service cost not yet recognised and the fair value of plan assets out of which the obligations are to be settled directly. If such aggregate is negative, the asset is measured at the lower of such aggregate or the aggregate of cumulative unrecognised net actuarial losses and past service cost and the present value of any economic benefits available in the form of refunds from the plan or reductions in the future contributions to the plan.





(s) Retirement Benefit Obligations (continued)

Defined contributions schemes

Payments to defined contribution retirement plans are charged as an expense as they fall due. Unpaid contributions are recognized as a liability.

Other retirement benefits

For employees who are not covered by the above plan, the net present value of gratuities payable under the Employment Right Act 2008 is calculated by a qualified actuary and a liability accounted for. The obligations under this item are not funded.

(t) Taxes

Current tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Group operates and generates taxable income.

Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred tax

Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

• Wherethedeferredtaxliabilityarisesfromtheinitialrecognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

• Inrespectoftaxabletemporarydifferencesassociatedwith investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax credits and unused tax losses can be utilized, except:

• Where the deferred tax asset relating to thedeductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

• In respect of deductible temporary differencesassociated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

The principal temporary differences arise from depreciation on property, plant and equipment, revaluations of certain non-current assets, tax losses carried forward and retirement benefit obligations.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantially enacted at the reporting date.

Income tax relating to items recognised directly in other comprehensive income is recognised in other comprehensive income and not profit or loss.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.





(t) Taxes (continued)

Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, would be recognised subsequently if new information about facts and circumstances changed. The adjustment would either be treated as a reduction to goodwill (as long as it does not exceed goodwill) if it is incurred during the measurement period or in profit or loss.

Value Added Tax

Revenues, expenses and assets are recognised net of the amount of value added tax except:

• Wherethevalueaddedtaxincurredonapurchaseofassets or services is not recoverable from the taxation authority, in which case the value added tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• Receivables and payables that are stated with theamount of value added tax included.

The net amount of value added tax recoverable from, or payable to, the taxation authority is included as part of accounts receivables or payables in the Statement of Financial Position.

(u) Non-current assets held for sale and discontinued operations

Non-current assets and disposal groups are classified as held for sale if the carrying amount will be recovered through a sale rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset is available for sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs. Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortised.

In the consolidated statement of comprehensive income of the reporting period, and of the comparable period of the previous year, income and expenses from discontinued operations are reported separately from

income and expenses from continuing operations, down to the level of profit after taxes. The resulting profit or loss (after taxes) is reported separately in the statement of comprehensive income.

(v) Lease

The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.

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

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The difference between actual payments and the straight lining of the expense is recognised as a liability or asset in the statement of financial position.

(w) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use.

All other borrowing costs are recognised as an expense when incurred.





(x) Treasury shares

Own equity instruments which are reacquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equity instruments. Any difference between the carrying amount and the consideration is recognised in other reserves.

(y) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific criteria must also be met:

(i) Sale of goods and services

Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and upon customer acceptance, if any, or performance of services, net of value added taxes and discounts, and after eliminating sales within the Group. The Group turnover reflects the invoiced values derived from hotel operations.

(ii) Other revenues

Other revenues earned by the Company are recognised on the following basis:

• Interestincome-asitaccrues(takingintoaccounttheeffective yield on the asset) unless collectability is in doubt.

• Dividend income - when the shareholder’s right toreceive payment is established.

(z) government grants

Government grants are recognised where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. When the grant relates to an expense item, it is recognised as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate. Where the grant relates to an asset, it is recognised as deferred income and released to income in equal annual amounts over the expected useful life of the related asset.

3 SIgNIFICANT ACCOuNTINg JuDgEmENTS AND ESTImATES

The preparation of the Group’s consolidated and separate financial statements requires management to make judgements, estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Judgements

In the process of applying the Group’s accounting policies, management has made the following judgement, apart from those involving estimations, which has the most significant effect on the amounts recognised in the financial statements:

Scope of Consolidation

The Company does not legally own SNC St Paul, an entity in Réunion Island which owns the property of SA Villas du Lagon. Having regard to the fact that:

• the entitywas setup inorder to take advantageofa specific tax exemption scheme proper to French territories;

• theGrouphasanobligation tobuyand thepresentshareholders an obligation to sell the shares of the entity at a specified time at Euro 1 per shareholder;

• TheDirectorsbelievethattheentityisaSpecialPurposeEntity (SPEs) since:

• in substance, the activities of the SPE are beingconducted on behalf of the Group according to its specific business needs so that the Group obtains benefits from the SPE’s operation;

• in substance, the Group has the decision-makingpowers to obtain the majority of the benefits of the activities of the SPE. This is achieved by the existence of an ‘autopilot’ mechanism;

• insubstance,theGrouphasrightstoobtainthemajorityof the benefits of the SPE and therefore may be exposed to risks incident to the activities of the SPE; and

• in substance, theGroup retains themajority of theresidual or ownership risks related to the SPE or its assets in order to obtain benefits from its activities.

Consequently, the Directors have consolidated financial statements of the SPE in accordance with SIC 12 Consolidation–SpecialPurposeEntities.



3 SIgNIFICANT ACCOuNTINg JuDgEmENTS AND ESTImATES (continued)

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the Reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Deferred tax assets

Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. At June 30, 2011, the status of unused tax losses was as follows:

Recognised unrecognised Total Rs’000 Rs’000 Rs’000

Tax losses 237,099 406,013 643,112

Useful life and residual value of buildings

The depreciation of buildings is dependent on the estimation of the useful lives and residual values of the buildings, which have been made by the Group based on the report of independent valuers. The carrying amount of buildings included under Property, Plant and Equipment amounted to Rs.6,627M (2010: Rs.5,361M).

Impairment of goodwill

Goodwill is tested on an annual basis for impairment loss in accordance with IFRS 3. This requires an estimation of the “value in use’ of the cash generating units to which goodwill is allocated. Estimating a value in use amount requires management to make estimates of the expected future cash flows from the cash generating unit and the selection of suitable discount rate in order to compute the present value of expected cash flow. The carrying amount of goodwill as at June 30, 2011 amounted to Rs.644M (2010: Rs.193M). Further details are given in Note 5.

Retirement benefits obligations

The cost of defined benefit pension plans and related provision, as disclosed in Note 10 to the financial statements requires the use of actuarial valuations. The actuarial valuation involves the use of significant estimate in respect of inter-alia, discount rate, expected return on plan assets, future salary increases, mortality rate and future pension increases. Due to the long term nature of these plans, such estimates are subject to significant uncertainty. The net employee liability at June 30, 2011 is Rs.20.2 M (2010: Rs.21.01 M). Further details are set out in Note 10.


4 PROPERTY, PLANT AND EQuIPmENT

THE GROUP

Freehold Buildings on Plant Furniture Construction Land and Leasehold and and motor Computer in Buildings Land Equipment Fittings Vehicles Equipment Progress Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Cost and Valuation

At January 1, 2010 618,206 5,452,673 595,849 385,359 66,705 57,642 11,993 7,188,427 Transfers - - 241 - - - (241) - Additions 114 3,708 7,394 1,618 636 2,702 2,742 18,914 Disposal adjustment - - (826) - (29) - - (855) Transfer to asset held for sale

(note 13) - (405,485) - - - - - (405,485) Exchange difference - (154,432) (20,823) (304) 57 (682) (335) (176,519)

At June 30, 2010 618,320 4,896,464 581,835 386,673 67,369 59,662 14,159 6,624,482 Transfers - (9,925) 2,182 5,040 - 11,426 (8,723) - Acquisition of subsidiary - 1,770,000 273,638 76,446 20,273 17,289 - 2,157,646 Additions 1,919 23,628 25,272 9,169 5,130 9,942 8,617 83,677 Disposal adjustment (56,875) - (403) - (477) (1,122) - (58,877) Transfer from assets held for

sale (note 13) - 405,485 - - - - - 405,485 Transfer to assets held for sale

(note 13) - (129,297) (13,334) (11,911) (435) (3,338) - (158,315) Exchange difference - (60,110) (10,422) (5,009) (1,263) (895) 133 (77,566)

At June 30, 2011 563,364 6,896,245 858,768 460,408 90,597 92,964 14,186 8,976,532

Depreciation

At January 1, 2010 1,424 196,749 285,908 249,021 44,797 43,015 - 820,914 Charge for the period 724 48,474 35,266 13,045 4,803 3,621 - 105,933 Disposal adjustment - - (573) - (29) - - (602) Transfer to asset held for sale

(note 13) - (29,334) - - - - - (29,334) Exchange difference - (9,623) (9,962) (153) 12 (416) - (20,142)

At June 30, 2010 2,148 206,266 310,639 261,913 49,583 46,220 - 876,769 Acquisition of subsidiary - - 86,974 24,945 4,401 13,011 - 129,331 Charge for the year 1,499 139,735 61,874 29,951 9,021 10,027 - 252,107 Disposal adjustment - - (19) (99) (477) (1,118) - (1,713) Transfer from assets held for

sale (note 13) - 29,334 - - - - - 29,334 Transfer to assets held for sale

(note 13) - (4,948) (10,139) (7,424) (334) (3,147) - (25,992) Exchange difference - 1,879 (2,520) (1,847) (333) (788) - (3,609)

At June 30, 2011 3,647 372,266 446,809 307,439 61,861 64,205 - 1,256,227

Net Book Values

At June 30, 2011 559,717 6,523,979 411,959 152,969 28,736 28,759 14,186 7,720,305

At June 30, 2010 616,172 4,690,198 271,196 124,760 17,786 13,442 14,159 5,747,713




4 PROPERTY, PLANT AND EQuIPmENT (continued)

THE COMPANY

Freehold Buildings on Plant Furniture Land and Leasehold and and motor Computer Buildings Land Equipment Fittings Vehicles Equipment Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Cost and Valuation

At January 1, 2010 100,000 125,000 15,824 16,460 2,436 3,912 263,632 Additions - 2,715 4,917 684 - 29 8,345 Disposal - - (583) - - - (583)

At June 30, 2010 100,000 127,715 20,158 17,144 2,436 3,941 271,394 Additions 442 1,582 1,767 2,652 - 463 6,906 Transfer to assets held for sale

(note 13) - (129,297) (13,334) (11,911) (435) (4,103) (159,080)

At June 30, 2011 100,442 - 8,591 7,885 2,001 301 119,220

Depreciation

At January 1, 2010 1,038 2,187 11,548 11,940 1,496 3,230 31,439 Charge for the period 528 1,170 283 625 101 352 3,059 Disposal adjustment - - (543) - - - (543)

At June 30, 2010 1,566 3,357 11,288 12,565 1,597 3,582 33,955 Charge for the year 1,081 1,591 918 1,319 223 530 5,662 Transfer to assets held for sale

(note 13) - (4,948) (10,139) (7,424) (334) (3,912) (26,757)

At June 30, 2011 2,647 - 2,067 6,460 1,486 200 12,860

Net Book Values

At June 30, 2011 97,795 - 6,524 1,425 515 101 106,360

At June 30, 2010 98,434 124,358 8,870 4,579 839 359 237,439



4 PROPERTY, PLANT AND EQuIPmENT (continued)

(a) The freehold land and buildings and buildings on leasehold land of the Group and the Company were revalued in 2008 at their open market value, by reference to recent market transactions on arm’s length term, by Gexim Real Estate Ltd, Land Surveyor.

The book values were adjusted to the revalued amount and the revaluation surpluses net of deferred taxation were credited to revaluation reserves.

The Group’s policy is to revalue property, plant & equipment every five years unless there is evidence that the fair value of the assets differ materially from the carrying amount.

If the land and buildings were stated on the historical cost basis, the amounts would be as follows:

Building on leasehold land


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Cost 3,765,112 3,739,565 - 49,950 Accumulated depreciation (626,290) (550,988) - (42,989)

Net carrying amount 3,138,822 3,188,577 - 6,961

Freehold land and building

Cost 299,283 297,364 56,848 56,848 Accumulated depreciation (15,255) (14,655) (5,550) (4,950)

Net carrying amount 284,028 282,709 51,298 51,898

(b) Motor vehicles above include leased assets as follows:


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Cost 38,225 40,927 - - Accumulated depreciation (27,505) (20,834) - -

Net book values 10,720 20,093 - -

(c) Bank borrowings are secured on the assets of the Group and the Company.

(d) No borrowing costs have been capitalised during the period. (2010: Rs.Nil).



5 INTANgIBLE ASSETS

THE GROUP

Computer Leasehold Software & Rights goodwill Licences Total Rs’000 Rs’000 Rs’000 Rs’000

Cost

At January 1, 2010 250,808 193,621 48,401 492,830 Additions - - 3,729 3,729 Transfer to assets held for sale (Note 13) (19,321) - - (19,321) Exchange difference (1,982) - (400) (2,382)

At June 30, 2010 229,505 193,621 51,730 474,856 Additions 46,114 - 10,759 56,873 Acquisition of subsidiary 401,808 482,760 3,442 888,010 Transfer from assets held for sale (Note 13) 19,321 - - 19,321 Transfer to assets held for sale (Note 13) - - (6,727) (6,727) Exchange difference (29,044) (32,184) (59) (61,287)

At June 30, 2011 667,704 644,197 59,145 1,371,046

Amortisation

At January 1, 2010 41,449 - 26,107 67,556 Charge for the period 2,938 - 3,969 6,907 Transfer to assets held for sale (Note 13) (1,216) - - (1,216) Exchange difference (114) - (148) (262)

At June 30, 2010 43,057 - 29,928 72,985 Acquisition of subsidiary 162,164 - 3,438 165,602 Charge for the year 466 - 8,152 8,618 Transfer from assets held for sale (Note 13) 1,216 - - 1,216 Transfer to assets held for sale (Note 13) - - (6,335) (6,335) Exchange difference (10,462) - (161) (10,623)

At June 30, 2011 196,441 - 35,022 231,463

Net Book Values

At June 30, 2011 471,263 644,197 24,123 1,139,583

At June 30, 2010 186,448 193,621 21,802 401,871



5 INTANgIBLE ASSETS (continued)

THE COMPANY Computer Software Rs’000 Cost

At January 1, 2010 6,634 Additions 93

At June 30, 2010 6,727 Disposal (6,727)

At June 30, 2011 -

Amortisation At January 1, 2010 5,763 Charge for the period 245

At June 30, 2010 6,008 Charge for the year 327 Disposal (6,335)

At June 30, 2011 -

Net Book Values

At June 30, 2011 -

At June 30, 2010 719

(a) Impairment test on goodwill

Goodwill represents the surplus of purchase consideration over the fair value of the assets acquired as at the date of acquisition. Goodwill has been assessed as having an indefinite life and in accordance with IFRS 3, goodwill has been assessed for impairment based on each cash generating unit.

THE GROUP

2011 2010 Rs’000 Rs’000

Les Pavillons Resorts Ltd 70,000 70,000 Holiday & Leisure Resorts Limited 83,658 83,658 Naïade Resorts Maldives Ltd 450,576 - Other subsidiaries 39,963 39,963

644,197 193,621

The recoverable amount of each cash generating unit has been determined based on value-in-use calculation. The calculation used pre-tax cash flow projection based on financial budgets approved by management covering a three-year period. The pre-tax discount rate applied to the cash flow projection is 16% (2010: 16%) and a growth rate of 4% (2010: 4%) has been assumed as well as a 5% (2010: 4%) inflation rate.

The key assumptions used for preparing the cash flow forecasts are based on management’s past experience of the industry and the ability of each cash generating unit to at least maintain its market share as well as stable local and international economic conditions.



6 INVESTmENT IN SuBSIDIARY COmPANIES

THE COMPANY

2011 2010 Rs’000 Rs’000

At July/January 1, 1,449,321 1,423,318 Additions - 26,003

At June 30, 1,449,321 1,449,321

(a) The subsidiary companies are as follows:

Country of Effective Shareholding 2011 Effective Shareholding 2010 Name of Companies Incorporation Direct Indirect Direct Indirect % % % %

Les Pavillons Resorts Ltd Mauritius 100 - 100 - Beau Rivage Co Ltd Mauritius 100 - 100 - Blue Bay Tokey Island Limited Mauritius 100 - 100 - Poseidon Limitée Mauritius 100 - 100 - Holiday & Leisure Resorts Limited Mauritius 100 - 100 - La Plantation Limited Mauritius - 100 - 100 Merville Beach Hotel Limited Mauritius - 100 - 100 Merville Limited Mauritius - 100 - 100 MSF Leisure Co Ltd Mauritius - 100 - 100 LTK Ltd Mauritius - 100 - 100 FMM Ltee Mauritius - 100 - 100 Naïade Resorts (UK) Limited England 100 - 100 - Naïade Resorts Seychelles Ltd Seychelles - 100 - 100 NRTA Ltd Mauritius - 100 - 100 Naïade Holidays (Pty) Ltd South Africa 100 - 100 - SAS Hôtel Prestige Réunion (note (b)) France 100 - 100 - SA Les Villas Du Lagon Réunion Island - 100 - 100 SAS Le Récif Réunion Island - 99 - 99 Ari Atoll Investment Ltd Seychelles - 100 - 100 Naïade Holidays Ltd Mauritius 100 - 100 - Naïade Foundation Mauritius 100 - 100 - Naïade Resorts Maldives Ltd Seychelles - 92 - - White Sand Resorts & Spa Pvt Ltd Maldives - 92 - - Le Tropical Hotel Ltd Mauritius 100 - - -

(b) In accordance with SIC 12, Consolidation - Special Purpose Entities and as more fully explained in note 3, the Company has also consolidated the financial statements of SNC St Paul even if this entity does not legally belong to the Group. The Special Purpose Entity is incorporated in Réunion Island.



7 INVESTmENT IN ASSOCIATED COmPANIES

THE GROUP

2011 2010 Rs’000 Rs’000

At July/January 1, 464,443 187,139 Deposit on shares - 315,000 Share of reserves (9,541) 30,000 Share of results (66,372) (61,990) Exchange difference 3,844 (5,706) Deconsolidation of Naïade Resorts Maldives Ltd as associated company (198,316) -

At June 30, 194,058 464,443

Naïade Resorts Oceanide maldives Ltd Limited Rs’000 Rs’000

Assets N/A 707,319 Liabilities N/A (513,261)

Share of associate’s revenue and result Revenue 147,338 175,024 Loss (39,796) (26,576)

Country of incorporation Mauritius Effective indirect shareholding 49.30%

(a) Following rights issue made by Naïade Resorts Maldives Limited (NRML), Naïade Resorts Limited is now the holding company of NRML with a shareholding of 92%. NRML has therefore been consolidated as a subsidiary as from January 1, 2011.

8 OTHER FINANCIAL ASSETS


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Available-for-sale investments 94 26,067 58 58 Non-current receivable 57,138 51,448 - -

57,232 77,515 58 58

Available-for-sale investment At July/January 1, 26,067 28,427 58 58 Disposal (25,973) (3,617) - - Gain in fair value - 1,257 - -

At June 30, 94 26,067 58 58

Available-for-sale investments consist of: - Quoted shares 4 25,977 - - - Unquoted shares 90 90 58 58

94 26,067 58 58



8 OTHER FINANCIAL ASSETS (continued)

The fair value of quoted ordinary shares (classified as Level 1 as detailed in Note 37(d)) is determined by reference to published price quotations in an active market at the reporting date. The fair values of unquoted investments approximate their carrying values. Given the relative immateriality of the value of these unquoted shares, the directors did not provide any disclosure relating to Level 3 financial instruments as explained in Note 37(d).

Non-current receivable THE GROUP

2011 2010 Rs’000 Rs’000

Net amount receivable on disposal of Desroches Ltd (note (a)) 96,402 90,448 Amount receivable within one year (39,264) (39,000)

Non-current receivable 57,138 51,448

Note (a)

Amount receivable in respect to disposal of Desroches Island Lodge is interest free and represents net present value of cash inflows using a discount rate of 5%. The non-current portion is receivable in July 2012.

9 DEFERRED TAX

Deferred income taxes are calculated on all temporary differences under the liability method.

Deferred tax is reflected in the statements of financial position as follows:


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Deferred tax assets (19,733) (27,933) - - Deferred tax liabilities 323,535 323,892 24,399 25,166

303,802 295,959 24,399 25,166

The movement in the deferred income tax account is as follows: At July/January 1, 295,959 265,185 25,166 24,496 Recognised in profit or loss (note 20) 9,845 27,064 (767) 670 Recognised in other comprehensive income (1,481) - - - Exchange difference (521) 3,710 - -

At June 30, 303,802 295,959 24,399 25,166



9 DEFERRED TAX (continued)

Deferred income tax at June 30 relates to the following:

THE GROUP Balance movement

2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Deferred tax liability Accelerated depreciation 145,445 158,149 (12,704) (9,602) Revaluation of property, plant & equipment 197,672 197,672 - -

343,117 355,821 (12,704) (9,602) Deferred tax assets Retirement benefit obligation (2,817) (2,661) (156) 233 Tax losses (34,631) (54,266) 19,635 40,266 Provision for expenses and others (1,867) (2,935) 1,068 (123)

(39,315) (59,862) 20,547 40,376

Net deferred tax liabilities 303,802 295,959

Total movement for the year/period 7,843 30,774 Recognised as follows: In profit or loss (Note 20) 9,845 27,064 In other comprehensive income (note 15) (1,481) - Exchange difference (521) 3,710

7,843 30,774

Deferred tax assets have not been recognised on tax losses amounting to Rs 421.5 million (2010: Rs 310.03 million) for the Group.

THE COMPANY Balance movement

2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Deferred tax liability Accelerated depreciation 4,987 5,730 (743) 698 Revaluation of property, plant & equipment 19,836 19,836 - -

24,823 25,566 (743) 698

Deferred tax assets Retirement benefit obligation (97) (97) - (10) Provision for expenses (327) (303) (24) (18)

(424) (400) (24) (28)

Net deferred tax liabilities 24,399 25,166

Total movement for the year (767) 670

Recognised as follows: In profit or loss (Note 20) (767) 670

(767) 670

Deferred tax assets has not been recognised on tax losses amounting to Rs 115.8 million (2010: Rs 64.1 million) for the Company.



10 RETIREmENT BENEFIT OBLIgATIONS/(ASSETS)

(a) The benefits of employees of the Group fall under three different types of arrangements:

(i) A defined benefit scheme which is funded. The plan assets are held independently by an insurance company;

(ii) A defined contribution scheme; and

(iii) Retirement benefits as defined under the Employment Right Act 2008 and which are unfunded.

(b) The liabilities in respect of the defined benefit obligations (i) and (iii) above are analysed as follows:


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Funded obligation - Asset (note (c - k)) (12,277) (6,592) - - Unfunded obligation (note (l - o)) 32,497 27,612 654 654

20,220 21,020 654 654 As there is no right of set off in respect of the two above obligations, the amounts have been disclosed separately.

(c) The amounts recognised in the statements of financial position in respect of funded obligation are as follows:

THE GROUP

2011 2010 Rs’000 Rs’000

Present value of funded obligation 32,188 63,579 Fair value of plan assets (39,493) (64,684)

(7,305) (1,105) Unrecognised actuarial loss (4,972) (5,487)

Asset in the statements of financial position (12,277) (6,592)

Movement in asset recognised in the statements of financial position: At July/January 1, (6,592) (4,528) Total expenses (note (d)) (1,649) 1,536 Contributions paid (4,036) (3,600)

At June 30, (12,277) (6,592)

(d) The amounts recognised in the statements of comprehensive income are as follows: Current service cost 3,304 1,573 Interest cost 6,689 3,027 Scheme expenses 147 144 Cost of insuring risk benefits 335 - Expected return on plan assets (6,448) (3,208) Effect of curtailment/settlement (5,676) -

Total included in staff costs (1,649) 1,536



10 RETIREmENT BENEFIT OBLIgATIONS/(ASSETS) (continued)

THE GROUP

2011 2010 Rs’000 Rs’000

(e) Changes in the fair value of plan assets are as follows: At July/January 1, 64,684 59,372 Expected return on plan assets 6,448 3,208 Employer’s contribution 4,036 3,600 Scheme expenses (147) (144) Cost of insuring risk benefits (335) - Actuarial losses (5,373) (1,352) Benefits paid (29,820) -

At June 30, 39,493 64,684

(f) The main categories of plan assets are as follows: Local equities 13,822 24,256 Overseas equities 15,797 14,554 Fixed interest 7,504 22,639 Properties 2,370 3,235

Total market value of assets 39,493 64,684

(g) Changes in defined benefit obligation are as follows: At July/January 1 63,579 58,978 Current service cost 3,304 1,573 Interest cost 6,689 3,028 Actuarial gains (1,825) - Effect of curtailment (9,739) - Benefits paid (29,820) -

At June 30, 32,188 63,579

(h) Actual and expected return on plan assets.

(i) The actual return on plan assets was Rs 1,074,218 (2010: Rs.1,855,000) for the year ended June 30, 2011.

(ii) The assets of the plan are invested in Anglo Mauritius’ Deposit Administration Fund. The latter is expected to produce a smooth progression of return from one year to the next. The breakdown of the assets above corresponds to a notional allocation of the underlying investments based on the long term strategy of the fund.

As the fund is expected to produce a smooth return, a fairly reasonable indication of the future returns can be obtained by looking at historical ones. Therefore, the long term expected return on asset assumption has been based on historical performance of the fund.

In terms of the individual expected returns, the expected return on equities has been based on an equity risk premium above a risk free rate. The risk free rate has been measured in accordance to the yields on government bonds which at June 30, 2011 stood at 7%.

The fixed interest portfolio includes government bonds, debentures, mortgages and cash. The expected return for this asset class has been based on yields of government bonds at June 30, 2011.

(iii) The expected return on properties has been based on the rate of inflation estimated at 5% at June 30, 2011.




(i) Employer’s contributions which are expected to be paid are estimated at Rs.2.4m (2010: Rs 7.2m).

(j) The figures in respect of defined benefit obligation for the current and previous four periods are shown below.

Year Period ended ended June 30 June 30 Year ended December 31, 2011 2010 2009 2008 2007 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Retirement benefit obligation 32,188 63,579 58,978 60,605 53,496 Fair value of plan assets (39,493) (64,684) (59,372) (49,119) (37,759)

(Surplus)/Deficit (7,305) (1,105) (394) 11,486 15,737 Unrecognised actuarial loss (4,972) (5,487) (4,134) (13,742) (15,268)

(12,277) (6,592) (4,528) (2,256) 469

Experience adjustments on planned assets (5,373) (1,352) (2,407) (1,880) 441

Experience adjustments on planned liabilities 1,825 - 11,457 2,732 (245)

(k) The principal actuarial assumptions used for accounting purposes were:


2011 2010 2011 2010 % % % %

Discount rate 10.0 10.0 - - Expected rate of return on plan assets 10.5 10.5 - -

Future salary increases 8.0 12.0 - -

(l) The amounts recognised in the statements of financial position in respect of unfunded obligation are as follows:


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Present value of unfunded obligation 22,830 27,730 654 717 Unrecognised actuarial gains 9,667 (118) - (63)

Liability in the statements of financial position 32,497 27,612 654 654

Movement in the liability recognised in the statements of financial position:

At July/January 1, 27,611 24,483 654 585 Total expenses (note (m)) 5,503 3,221 - 69 Benefits paid (662) - - - Exchange difference 45 (92) - -

At June 30, 32,497 27,612 654 654





2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

(m) The amounts recognised in the statements of comprehensive income are as follows: Current service cost 2,596 1,922 - 35 Interest cost 2,840 1,263 - 34 Actuarial loss 67 36 - -

Total included in staff costs 5,503 3,221 - 69

(n) Changes in defined benefit obligation are as follows: At July/January 1, 27,730 24,638 717 648 Current service cost 2,596 1,922 - 35 Interest cost 2,840 1,263 - 34 Actuarial gains (9,719) - (63) - Benefits paid (662) - - - Exchange difference 45 (93) - -

At June 30, 22,830 27,730 654 717

(o) The principal actuarial assumptions used for accounting purposes were:


2011 2010 2011 2010 % % % %

Discount rate 9.5 11.0 9.5 11.0 Future salary increases 7.5 8.0 7.5 8.0

11 INVENTORIES


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Food and beverages 40,848 23,141 - 762 Others 59,497 38,480 - 886

100,345 61,621 - 1,648

The inventories are stated at cost and have been pledged as security for bank borrowings. Rs 500,000 of inventories were written down this year. (2010: Rs 500,000).



12 TRADE AND OTHER RECEIVABLES


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Trade receivables 399,210 379,403 2,611 14,929 Receivable from fellow subsidiaries (note (35)) - - 2,857,960 2,151,894 Receivable from associates (note (35)) 173,719 579,613 - 17,542 Loans receivable from key management personnel (note (i) and 35) 929 4,138 929 4,138 Other receivables and prepayments 173,310 292,653 10,593 38,581

747,168 1,255,807 2,872,093 2,227,084 Less allowances for impairment of receivables (21,006) (11,001) (1,552) (1,608)

726,162 1,244,806 2,870,541 2,225,476

(i) Key management personnel include executive directors. These loans which are neither past due nor impaired are unsecured and have been properly approved by the Board of Directors which, pursuant to section 81 of the Companies Act 2001, considers the loans as being in the interests of the company.

(ii) Trade receivables are not secured, non-interest bearing and are generally on 30 days term. Impairment of receivables have been assessed on a collective basis only as there were no indications of impairment on an individual basis. The Group has subscribed to a credit protection scheme for the current portfolio of Mauritian operations with a Global Service Provider, with a view to minimise its credit risk exposure.

(iii) At June 30, 2011, the ageing analysis of trade receivables is as follows:


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Neither past due nor impaired 112,155 113,137 - 5,070 Less than 30 days 94,548 80,698 - 2,334 More than 30 and less than 60 days 65,246 44,747 - 1,319 More than 60 and less than 90 days 26,808 21,297 - 695 More than 90 days 100,453 119,524 2,611 5,511

399,210 379,403 2,611 14,929

(iv) The movement in allowances for impairment of trade and other receivables were as follows:


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

At July/January 1, 11,001 10,181 1,608 1,488 Acquisition of subsidiary 2,996 - - - Charge for the year/period 15,393 820 90 120 Utilised (8,384) - (146) -

At June 30, 21,006 11,001 1,552 1,608

(v) Other receivables and receivables from associates are neither past due nor impaired. No collaterals are held in respect of those receivables.



13 NON-CuRRENT ASSET CLASSIFIED AS HELD FOR SALE AND DISCONTINuED OPERATION


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Le Tropical Hotel 132,715 - 132,715 - Le Récif Hotel - 379,203 - -

132,715 379,203 132,715 -

Property of Hotel Le Récif

At July/January 1, 379,203 - - - Transfer from property, plant and equipment (Note 4) - 376,151 - - Transfer from intangible assets (Note 5) - 18,105 - - Grant pertaining to building - (15,053) - - Assets transferred back to normal operating assets (379,203) - - -

At June 30, - 379,203 - -

Negotiations with the potential buyer for the acquisition on a sale and leaseback basis of Hotel Le Récif in Reunion Island have not been successful. Although it is the intention of the Directors to sell this property on a sale and leaseback basis, the Directors have decided to transfer the assets back to property, plant and equipment and intangible assets, as appropriate.

Plan to Dispose of Hotel Le Tropical

Le Tropical Hotel does not form part of the long term strategy of the Group, the Directors have decided to accept an offer for the sale of the hotel. An agreement has been signed with the potential buyer subject to the fulfilment of a number of conditions precedent. In line with IFRS 5, the asset has been reclassified as held for sale.

There is no potential impairment as the sale proceeds is expected to recover more than the book value of the assets to be transferred.


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Details of assets held for sale

Transfer from property, plant and equipment (note 4) 132,323 - 132,323 - Transfer from intangible assets (note 5) 392 - 392 -

132,715 - 132,715 -



13 NON-CuRRENT ASSET CLASSIFIED AS HELD FOR SALE AND DISCONTINuED OPERATION (continued)

THE GROUP ANd THE COMPANY

Year Six months ended ended June 30, June 30, 2011 2010 Rs’000 Rs’000

Total revenue 68,036 35,469 Total operating expenses (59,409) (30,644)

Operating profit 8,627 4,825 Depreciation and amortisation (3,165) (2,933) Finance costs (6,039) (3,790)

Profit before tax (577) (1,898) Less income tax expense (46) (184)

Result for the year/period attributable to discontinued operations (531) (1,714)

Cash flows from discontinued operations Cash flow from operating activities 8,593 3,890 Cash flows from investing activities (6,654) (8,056) Cash flows from financing activities - -

Net cash flows from discontinued operations 1,939 (4,166)

14 ISSuED CAPITAL


2011 2010 Rs’000 Rs’000

Stated Capital Ordinary shares of Rs 10 each. At July/January 1, 862,568 862,568 Rights issue 277,778 -

At June 30, 1,140,346 862,568

Number of shares No of Shares 2011 2010

At July/January 1, 86,256,873 86,256,873 Rights issue 27,777,778 -

At June 30, 114,034,651 86,256,873

During the year ended June 30, 2011, as part of the financial restructuring plan, the company has made a rights issue of new shares in the ratio of 0.32311 new ordinary shares for every 1 ordinary share held. The shares were issued at a price of Rs 18 per ordinary share resulting into a share premium of Rs 8 per ordinary share.

The new ordinary shares will in all respect rank pari passu with existing ordinary shares.



14 ISSuED CAPITAL (continued)

The proceeds from the rights issue were received in two tranches namely, December 2010 and March 2011, and the shares were allotted at end of March 2011.


2011 2010

Treasury shares Number of shares units 287,000 287,000 Value Rs’000 18,081 18,081

15 OTHER RESERVES

(a) THE GROUP Foreign Reserve in Cash Flow Asset Currency Associated Hedging Revaluation Fair value Translation Company Reserve Reserve Reserve Reserve Total

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

At January 1, 2010 57,487 (7,600) 1,408,264 8,026 13,418 1,479,595 Cash flow hedging on loan in foreign

currency 30,000 (29,969) - - - 31 Currency translation difference - - - - (10,270) (10,270) Realised on disposal of available-for-sale

investments - - - (1,522) - (1,522) Gain on fair value of available-for-sale

investments - - - 1,257 - 1,257

At June 30, 2010 87,487 (37,569) 1,408,264 7,761 3,148 1,469,091 Cash flow hedging on loan in foreign

currency (9,541) 29,698 - - - 20,157 Transfer - - (3,895) 3,895 - - Currency translation difference - - - - (80,014) (80,014) Realised on disposal of available-for-sale

investment - - - (11,656) - (11,656) Hedged reserve realised on repayment

of borrowings - (2,292) - - - (2,292) Revaluation reserve transferred to

retained earnings - - (56,804) - - (56,804) Income tax related to cash flow

hedged items - 1,481 - - - 1,481

At June 30, 2011 77,946 (8,682) 1,347,565 - (76,866) 1,339,963



15 OTHER RESERVES

(a) THE GROUP

Nature and purpose of other reserves

Reserve in associated company

This reserve records the share of revaluation and hedging reserve in the associated company.

Cash flow hedging reserve

This reserve records the effective portion of the gain or loss on the hedging instruments in cash flow hedges. The movement for the year is in respect of exchange difference on conversion of loan in US$ and EURO at year end rate and also with respect to the portion of exchange difference reserve realised on repayment of borrowings.

Asset revaluation reserve

The asset revaluation reserve is used to record increases in the fair value of land and buildings (net of deferred tax on the revalued asset) and decreases to the extent that such decreases relates to an increase on the same asset previously recognised in equity.

During the year, the group disposed of a plot of land which was previously revalued. The revaluation surplus pertaining to this portion of land has therefore, been released to retained earnings.

Fair value reserve

This reserve records fair value changes on available-for-sale financial assets and represents net unrealised gains. The movement for the year includes the portion of fair value reserve realised on disposal of available-for-sale investment transferred to profit or loss for the year.

Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of financial statements of foreign subsidiaries and associates. It is also used to record the hedging of net investments in a foreign operations.

(b) THE COMPANY Revaluation Hedged Reserve Reserve Total Rs’000 Rs’000 Rs’000

At January 1, 2010 114,462 - 114,462 Movement for the period - - -

At June 30, 2010 114,462 - 114,462 Cash flow hedging on loan in foreign currency - (144) (144)

At June 30, 2011 114,462 (144) 114,318



16 NON-CONTROLLINg INTERESTS

THE GROUP

2011 2010 Rs’000 Rs’000

Arising on acquisition of subsidiary 89,042 - Share of result for the year 4,947 - Share of translation reserve (6,265) -

At June 30, 87,724 -

During the year, the Group increased its stake from 40% to 92% in Naïade Resorts Maldives Ltd. The 8% Non-controlling interest recognised at the acquisition date was measured by reference to their fair value. The following were the key models used in determining the fair value.

- assumed discount rate of 16%

- Assumed long-term sustainable growth of 4-5% per annum

17 INTEREST BEARINg LOANS AND BORROWINgS


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Current

Bank loans (note (a)) 574,133 601,579 127,323 339,097 Finance leases (note (b)) 5,006 6,552 - - Other loans (note (c)) - 6,825 - - Debentures (note (e)) 29,413 - - - Bank overdrafts (note 31(a)) 319,277 586,546 105,274 406,827

927,829 1,201,502 232,597 745,924

Non-current

Bank loans (note (a)) 4,129,672 3,270,209 621,451 598,086 Finance leases (note (b)) 4,286 7,596 - - Convertible bonds (note (d)) 500,000 - 500,000 - Debentures (note (e)) 88,238 - - -

4,722,196 3,277,805 1,121,451 598,086

Total borrowings 5,650,025 4,479,307 1,354,048 1,344,010


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

(a) Bank loans can be analysed as follows:-

Within one year 574,133 601,579 127,323 339,097 After one year and before two years 543,864 412,461 78,781 86,217 After two years and before five years 1,716,085 1,247,130 140,456 258,651 After five years 1,869,723 1,610,618 402,214 253,218

4,703,805 3,871,788 748,774 937,183



17 INTEREST BEARINg LOANS AND BORROWINgS (continued)


Effective Maturity 2011 2010 2011 2010Denomination interest rate (%) Rs’000 Rs’000 Rs’000 Rs’000

MUR 9.15% - 10.00% June 2018 1,179,641 1,280,378 532,988 520,933 EURO EURIBOR + 1.35% Dec 2017 143,386 87,750 143,386 87,750 EURO 5.76% Dec 2017 94,082 91,401 - - EURO 5.68% Oct 2012 68,637 71,740 - - EURO OAT + 1.40% Oct 2017 32,710 32,322 - - EURO EURIBOR + 2.00% Oct 2012 21,870 35,100 - - EURO EURIBOR + 1.60% Dec 2017 67,560 80,388 - - EURO 3.75% Dec 2014 245,879 240,150 - - EURO EURIBOR + 1.40% Dec 2014 145,977 147,101 - - EURO EURIBOR + 1.30% Dec 2019 280,841 275,362 - - MUR 9.25% - 10.00% Oct 2018 708,981 800,000 - - US$ LIBOR + 1.25% - 1.5% Dec 2017 276,131 374,850 - - US$ LIBOR + 1.25% - 1.5% July 2015 22,400 31,500 22,400 31,500 US$ LIBOR + 2.5% Dec 2019 281,232 - - - US$ LIBOR + 2.5% - 3.25% Dec 2019 360,333 - - - US$ LIBOR + 2.5% Dec 2019 720,994 - - - EURO EURIBOR+1.25% - 1.5% At call 3,151 202,246 - 175,500 MUR 9.15% - 10% At call 50,000 121,500 50,000 121,500

4,703,805 3,871,788 748,774 937,183

(b) Finance lease liabilities - minimum lease payments:

Within one year 5,759 7,761 - - After one year and before two years 3,142 5,529 - - After two years and before five years 1,665 2,838 - -

10,566 16,128 - - Future finance charges on finance leases (1,274) (1,980) - -

Present value of finance lease liabilities 9,292 14,148 - -

The present value of finance lease liabilities may be analysed as follows:

Within one year 5,006 6,552 - - After one year and before two years 2,836 4,437 - - After two years and before five years 1,450 3,159 - -

9,292 14,148 - -

Lease liabilities are effectively secured as the rights to the leased assets revert to the lessor in the event of default. The rate of interest on the lease vary between 10% to 11.5%.

Other loans

(c) Other loans which included non-secured short term Euro loan payable at call bearing an annual interest rate of 3% has been repaid during the year.



17 INTEREST BEARINg LOANS AND BORROWINgS (continued)

Convertible bonds

(d) 50 million units of unsecured Convertible Bonds have been issued for an aggregate amount of Rs 500 million. The Convertible Bonds are listed on the Stock Exchange of Mauritius and carry interest at the rate of 9% per annum. Interests on the Convertible Bonds are payable twice yearly in March and September.

The Convertible Bonds are redeemable on 31 December 2017. However, the holder of a Convertible Bond has the option to convert the Bond into share capital on:

31 December 2014

31 December 2015

31 December 2016

On the above specified dates, the number of shares to be delivered on conversion of one (1) convertible bond will be determined by applying the following formulae.

P/(Ax0.80)

A is equal to the average price of share listed on the stock exchange for the ninety day period ending on 15 November preceding the relevant conversion period.

P is equal to the principal amount.

Debentures

(e) The debentures have been issued in US$ by the subsidiary, White Sand Resorts & Spa Pvt Ltd, and carries interest at the rate of 5% per annum, payable yearly. The debentures are repayable as follows:

THE GROUP

2011 2010 Rs’000 Rs’000

Within one year 29,413 - After one year and before two years 29,412 - After two years and before five years 58,826 -

117,651 -

18 gOVERNmENT gRANTS

THE GROUP

2011 2010 Rs’000 Rs’000

At July/January 1, 11,428 28,787 Transfer from/(to) assets held for sale 15,053 (15,053) Release against depreciation charge (note 27 ) (5,717) (2,306)

At June 30, 20,764 11,428

The grant is in respect of Government assistance to finance construction of hotel in Reunion island and has been acccounted under the income approach. The grant is being released to profit or loss against depreciation charge over the useful life of the asset.



19 TRADE AND OTHER PAYABLES


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Trade payables 193,386 220,065 - 2,878 Amount payable to fellow subsidiaries (note (35)) - - 1,256,463 996,848 Other payables and accruals 606,968 467,213 114,036 120,757

800,354 687,278 1,370,499 1,120,483

Trade and other payables are non-interest bearing and are normally settled on 60-days term.

20 TAXATION


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

(a) Charge for the year/period

Current tax on the adjusted profit for the year/period at 15% (2010: 15%) 22,436 2,480 - - Under provision in previous year 636 236 221 - Deferred taxation movement (note (9)) 9,845 27,064 (767) 670

Income tax expense/(credit) 32,917 29,780 (546) 670 Less tax on discontinued activity (note 13) (46) (184) (46) (184)

Tax on continuing activities 32,963 29,964 (500) 854

(b) Reconciliation between tax expense and accounting profit is as follows:

Profit/(loss) before tax 45,000 (227,114) (59,792) (34,445) Tax calculated at a rate of 15% (2010: 15%) 6,750 (34,067) (8,969) (5,167) Effect of different tax rates (5,682) (1,928) - - Expenses not deductible for tax purposes 1,876 2,218 860 563 Expenses qualifying for double relief (20,606) (12,106) (292) (190) Under provision of tax in previous year 636 236 221 - Under provision of deferred tax in previous year 2,297 757 - 1,107 Tax losses not recognised 36,751 35,684 7,680 4,541 Tax effect of share of results from associates 9,956 9,299 - - Other adjustments 1,767 30,099 - - Income not subject to tax (10,862) (228) - Capital gain tax 10,080 - - -

Income tax expense/(credit) 32,963 29,964 (500) 854

(c) Different tax rates arise on the taxation of foreign units located in Réunion Island, Seychelles, UK and South Africa



20 TAXATION (continued)


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

(d) Statement of financial position At July/January 1, 220 20,729 - 10

10 Provision for the year (note (a)) 22,436 2,480 - - Under provision in prior year (note (a)) 636 236 221 - Paid during the year/period (6,881) (23,257) (221) (10) Exchange difference (73) 32 - -

At June 30, 16,338 220 - -

21 SALE OF gOODS AND SERVICES


Six months Six months Year ended ended Year ended ended June 30, 2011 June 30, 2010 June 30, 2011 June 30, 2010 Rs’000 Rs’000 Rs’000 Rs’000

Room revenue 1,643,707 596,384 - - Food and Beverages 1,091,989 395,369 - - Others 244,349 91,138 - -

2,980,045 1,082,891 - -

22 FINANCE REVENuE



Interest income 24,068 18,530 114,456 48,564



23 OTHER OPERATINg INCOmE



Rental income 3,814 1,472 - -Management fees 34,236 23,234 - -Foreign exchange gains 23,872 - - -Negative goodwill arising on acquisition of subsidiary (note a) 60,669 - - -Profit on disposal of land (note b) 10,573 - - -Others 16,338 4,475 - -

149,502 29,181 - -

(a) The negative goodwill is in respect of fair value of net assets acquired in Naïade Resorts Maldives Ltd exceeding the consideration paid.

(b) The profit on sale of land is in respect profit on sale of a portion of unused land at Merville.

24 COST OF INVENTORIES



Food, beverages and room supplies 455,325 158,770 - - Others 126,518 29,008 - -

581,843 187,778 - -

25 EmPLOYEE BENEFITS EXPENSE



Wages and salaries 860,388 376,605 - -Social security costs 38,976 31,407 - -Pension costs - Defined contribution scheme 4,347 5,584 - - Defined benefit scheme (1,650) 1,536 - - Other retirement benefit 5,503 3,152 - -Net termination benefits 36,820 - - -

944,384 418,284 - -


26 OTHER OPERATINg EXPENSES



Marketing expenses 245,278 126,966 - - Heat light and power 173,798 73,315 - - Repairs and maintenance 80,002 26,374 - - Land lease 37,043 9,448 - - Others 405,258 192,767 3,681 3,770

941,379 428,870 3,681 3,770

27 DEPRECIATION AND AmORTISATION



Depreciation of property plant and equipment (note (4)) 252,107 105,933 5,662 3,059 Amortisation of intangible asset (note (5)) 8,618 6,907 327 245 Release of grant (note 18) (5,717) (2,306) - - Discontinued operation (3,165) (2,933) (3,165) (2,933)

251,843 107,601 2,824 371

28 OPERATINg PROFIT /(LOSS)



(a) The operating profit/(loss) is arrived at after

crediting: Profit on disposal of available-for-sale investment 7,957 - - - Profit on disposal of property, plant and equipment 10,545 - - - Gain on exchange 23,872 - - -

and charging: Depreciation on property, plant and equipment 252,107 105,933 5,662 3,059 Amortisation of intangible assets 8,618 6,907 327 245 Loss on disposal of property, plant and equipment - 174 - 40 Loss on exchange - 32,121 - 687 Operating lease payments recognised as expense 37,043 10,124 - 676



29 FINANCE COSTS



Interest expense on: - Bank overdrafts 33,069 15,336 22,865 9,867 - Bank loans 269,700 130,440 68,965 39,777 - Finance leases 1,335 979 - - - Other loans and payables 18,690 4,540 75,913 27,326

322,794 151,295 167,743 76,970

30 EARNINgS/(LOSS) PER SHARE THE GROUP

Six months Year ended ended June 30, 2011 June 30, 2010 Rs’000 Rs’000

Continuing and Discontinued Operations

Basic Profit/(Loss) attributable to equity holders of the parent 6,559 (256,894)

Weighted average number of ordinary shares net of treasury shares 98,072,510 92,847,463

Earnings/(Loss) per share Rs. 0.07 (2.77)

Basic earnings per share are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. The weighted average number of shares takes into account the treasury shares as at year end.

Fully Diluted Adjusted profit attributable to holders of the parent 17,809 (256,894)

Weighted average number of ordinary shares after conversion of bonds 103,652,867 92,847,463

Diluted earnings per share Rs. 0.17 (2.77)

Continuing Operations

Basic Profit/(Loss) attributable to equity holders of the parent 7,090 (255,180)

Earnings/(Loss) per share Rs. 0.07 (2.75)

Fully Diluted Profit attributable to equity holders of the parent 18,340 (255,180)

Earnings per share Rs. 0.18 (2.75)

Due to the anti-dilutive effect of calculation of diluted earnings per share, amount disclosed is same as basic earnings per share.



31 NOTES TO THE STATEmENT OF CASH FLOWS


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

(a) Cash and cash equivalents Cash and short term deposits 233,810 113,577 84,803 54,606 Bank overdrafts (note 17) (319,277) (586,546) (105,274) (406,827)

(85,467) (472,969) (20,471) (352,221)

(b) Non-cash transactions

Part of the acquisition of property, plant and equipment was financed by finance leases as follows:


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Total amount acquired (note 4) 83,677 18,914 6,906 8,345 Payment to suppliers for previous year additions 17,764 - - - Financed by cash (99,580) (18,914) (6,906) (8,345)

Amount financed by finance leases 1,861 - - -

(c) Consideration paid on acquisition of subsidiaries

During the year, the Group increased its shareholding of 40% to 92% in Naïade Resorts Maldives Ltd. Naïade Resorts Maldives Ltd, which was previously consolidated as an associated company under the equity method has been consolidated as a subsidiary as from January 01, 2011.

Fair value of net assets acquired and liabilities recognised on date of recognition. NRmL Rs’000 Non-current assets Property, plant and equipment 2,028,316 Intangible assets 722,410

Current Assets Inventories 53,698 Trade and other receivables 284,908 Cash and cash equivalents 56,207

Non-current liabilities Long term borrowings (1,711,806)

Current liabilities Trade and other payables (320,703)

Net assets acquired 1,113,030

Details of consideration paid Amount paid in prior year as deposit on investment 300,000 Cash paid during the year ended June 30, 2011 780,000

1,080,000

Net cash outflow on acquisition of NRmL Consideration paid in cash 780,000 Cash and bank balances acquired (56,207)

Net cash outflows 723,793



32 CONTINgENT LIABILITIES

At June 30, 2011, the Group had the following contingent liabilities:

(a) Bank guarantees of Rs.748.9 million (2010: Rs.724.9 million) given on behalf of a subsidiary and an associate arising in the ordinary course of business from which it is anticipated that no material losses will arise.

(b) Legal claims of Rs. 75.9 million (2010: Rs. 101.5 million) have been lodged against the Group in the Courts of Mauritius arising from claims mainly in respect of termination of employment or contracts. The directors have been advised that some claims appear unfounded and that the severance allowance/damages claim in others appear grossly exaggerated. The company has also entered into counter proceedings for an amount of Rs 76 million.

33 SEgmENTAL REPORTINg

Primary segment - Business

The Group’s reportable segment has not changed with the adoption of IFRS 8. Internal reports reviewed by the Chief Internal Decision maker in order to allocate resources to the segments and to assess their performance comprise of the hotel segment and the non-hotel segment. The non-hotel segment remains insignificant (i.e less than 10%) both in terms of revenue and trading results compared to the Group. The Directors therefore consider that there is no relevance in disclosing segmental information at this level.

Secondary segment - Geographical

The contribution of the hotel units in Réunion Island via Hotel Prestige Réunion and for the unit in Maldives via White Sand Resorts & Spa Pvt Ltd for the year to June 30, 2011 are more than 10% in terms of revenue and the following disclosures are made with respect to segemental reporting.

For the year ended June 30, 2011

mauritius Reunion maldives Total Rs’000 Rs’000 Rs’000 Rs’000

Segment revenue 1,883,958 759,913 509,744 3,153,615 Segment result before finance charges 286,893 20,815 126,458 434,166 Segment assets 5,791,706 1,691,038 2,853,476 10,336,220 Capital expenditure 9,284 74,393 - 83,677

For the six months ended June 30, 2010 Segment revenue 870,890 295,181 - 1,166,071 Segment result before finance charges 55,433 (65,472) - (10,039) Segment assets 6,714,884 1,810,390 - 8,525,274 Capital expenditure 16,808 2,106 - 18,914




34 COmmITmENTS

Capital commitment


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Authorised by directors but not yet contracted for 177,437 75,620 - 2,159

177,437 75,620 - 2,159

Operating lease commitments

The properties leased by the Group are long term leases with renewal option included in the contracts.

Future minimum rentals payable under these leases are as follows:


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Within one year 82,509 22,380 - 1,694 After one year but not more than five years 366,038 116,618 - 8,607 More than five years 3,906,904 1,968,617 - 116,500

4,355,451 2,107,615 - 126,801

35 RELATED PARTY TRANSACTIONS

Related party transactions are as follows: THE GROUP

2011 2010 Rs’000 Rs’000

Amounts payable to Entities over which directors have control/significant influence 6,196 6,690

6,196 6,690

Amounts receivable from Associated companies (note 12) 173,719 894,613 Entities over which directors have control/significant influence - 48,750

173,719 943,363

Loan to key management personnel (note (a) and 12) 929 4,138

Purchases of goods or services Entities over which directors have control/significant influence 40,024 18,726

40,024 18,726

Management fees receivable Associated companies 34,236 24,031

Interest receivable Associated companies 22,907 18,170

Compensation to key management personnel (note (b)) 118,829 14,969



35 RELATED PARTY TRANSACTIONS

Related party transactions are as follows: THE COMPANY

2011 2010 Rs’000 Rs’000

Purchases of goods or services Entities over which directors have control/significant influence - 1,550

Interest receivable Subsidiaries 110,300 47,782 Associated companies 3,400 -

113,700 47,782

Interest payable Subsidiaries 48,695 27,726 Associated companies - -

48,695 27,726

Amounts receivable from Subsidiaries 2,857,960 2,151,894 Associated companies - 17,542

2,857,960 2,169,436

Amounts payable to Subsidiaries 1,256,463 996,848 Entities over which directors have control/significant influence - 147

1,256,463 996,995

Loan to key management personnel (note (a)) 929 4,138

(a) The loan to key management personnel is unsecured and was granted for acquiring shares in the Company. It bears interest at bank Prime Lending Rate (PLR) less 300 basis points and is repayable by 2012.

(b) Key management personnel includes executive directors and top level management personnel. The compensation includes short-term employee benefits only as well as termination benefits paid to a previous key management personnel.

(c) Amount due to and receivable from group companies are unsecured and bears interest at PLR less 300 basis points. Amount due from associated company denominated in MUR bears interest at PLR, while amount due from associated company denominated in US$ bears interest at LIBOR +1.5%. Settlement occurs in cash and there is no fixed repayment terms. There has been no impairment of amount due to and receivable from related parties.

36 uLTImATE HOLDINg COmPANY

The directors regard GML Investissement Ltée (GMLIL) previously known as Compagnie D’Investissement et de Développement Ltée, incorporated in Mauritius, as the ultimate holding company. The registered office is situated at 4th Floor, IBL House, Le Caudan Waterfront, Port Louis.



37 FINANCIAL INSTRumENTS AND FINANCIAL RISK mANAgEmENT

(a) Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.

The Group manages its capital structure and makes adjustment to it, in light of changes in economic conditions. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. No changes were made in the objectives, policies or processes during the year ended June 30, 2011 and period ended June 30, 2010.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus debt. The Group’s policy is to keep the gearing ratio below 60%. The Group includes within net debt, interest bearing loans and borrowings, less cash in hand and at bank. Total capital is calculated as ‘’equity’’ as shown in the statement of financial position less net unrealised reserves. The gearing ratios at June 30, 2011 and 2010 were as follows:


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Debt (i) 5,650,025 4,479,307 1,354,048 1,344,010 Cash in hand and at bank (233,810) (113,577) (84,803) (54,606)

Net debt 5,416,215 4,365,730 1,269,245 1,289,404

Equity (ii) 3,578,255 3,022,197 1,894,198 1,478,954

Total capital plus debt 8,994,470 7,387,927 3,163,443 2,768,358

Gearing ratio 60% 59% 40% 47%

(i) Debt is defined as long and short term borrowings, as detailed in note 17.

(ii) Equity includes all capital and reserves of the Group excluding unrealised reserves.

(iii) Increase in debt in 2011 is due to consolidation of Diva as a subsidiary.

(b) Categories of financial instruments


2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Financial assets Available-for-sale financial assets 94 77,515 58 58 Loans and receivables (including cash and cash equivalents) 1,095,517 1,675,810 2,951,485 2,243,908

1,095,611 1,753,325 2,951,543 2,243,966

Financial liabilities Trade and other payables 793,292 698,706 1,370,503 1,120,483 Borrowings 5,650,025 4,479,307 1,354,048 1,344,010

6,443,217 5,178,013 2,724,551 2,464,493

At the reporting date there are no significant concentrations of credit risk for loans and receivables. The carrying amount reflected above represents the Group’s maximum exposure to credit risk for such loans and receivables.



37 FINANCIAL INSTRumENTS AND FINANCIAL RISK mANAgEmENT (continued)

(c) Financial risk management

The Group’s Corporate Treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group . These risks include market risk (including currency risk, fair value interest risk and price risk), credit risk, liquidity risk and cash flow interest rate risk.

The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on Group’s financial performance. The Board of Directors reviews and agrees policies for managing each of these risks which are summarised below.

(i) Foreign currency risk management

The Group has transactional currency exposure. It is the practice in the hospitality industry to fix tariffs yearly in advance. In order to achieve stability of tariffs in the overseas markets and as a hedge against a fall in the value of the Mauritian Rupee, contracts with tour operators are denominated in the major international currencies of the markets in which the foreign tour operators belong.

A significant number of contracts are therefore denominated in Euros, Pounds Sterling and US Dollars and invoices are raised in these currencies, with above 90% of Group’s sales denominated in Euro and Pound Sterling. While protecting the enterprise against any fall in the parity of the Mauritian Rupee, it exposes it to a fall in revenue should the Rupee appreciate against one or more of the international currencies.

Management also tries to minimise effects of changes in exchange rates by entering in forward contracts. The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. Currency exposure arising from the net assets of the Group’s foreign operation is managed primarily through borrowings denominated in the relevant foreign currencies.

The currency profile of the financial assets and financial liabilities, excluding equity investments in subsidiaries and associates and retirement benefit obligations, at June 30, 2011 and at June 30, 2010 is as follows:

THE GROUP THE COMPANY Financial Financial Financial Financial assets liabilities assets liabilities Rs’000 Rs’000 Rs’000 Rs’000

June 2011 Euro 545,304 1,250,885 152,242 143,386 Pound Sterling 82,316 1,852 40,860 - US Dollar 168,519 2,014,760 - 22,400 Other foreign currencies 32,678 25,056 6,391 -

Total foreign currencies 828,817 3,292,553 199,493 165,786 Mauritian Rupee 266,794 3,150,764 2,752,050 2,558,765

Total 1,095,611 6,443,317 2,951,543 2,724,551

June 2010 Euro 884,540 1,515,906 147,046 263,250 Pound Sterling 106,061 1,501 24,564 - US Dollar 565,880 346,500 - 31,500 Other foreign currencies 37,774 36,956 8,612 -

Total foreign currencies 1,594,255 1,900,863 180,222 294,750 Mauritian Rupee 159,070 3,277,150 2,063,744 2,169,743

Total 1,753,325 5,178,013 2,243,966 2,464,493




(c) Financial risk management (continued)

(i) Foreign currency risk management (continued)

The following table details the Group’s sensitivity to a 5% increase and decrease in the Rupee against the relevant foreign currencies. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 5% change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign operations within the Group where the denomination of the loan is in a currency other than the currency of the lender or the borrower. A positive number below indicates an increase in profit and equity where the Rupee depreciates 5% against the relevant currency. There would be an equal and opposite impact on the profit and other equity, if the rupee strengthens by 5% against the relevant currency.

Sensitivity Analysis EuRO ImPACT

THE GROUP THE COMPANY 2011 2010 2011 2010 Rs’000 Rs’000 Rs’000 Rs’000

Profit or loss (5,404) (510) 443 (5,810) Equity (421) 369 - -

gBP ImPACT


Profit or loss 4,023 5,227 2,043 1,228 Equity - - - -

uS DOLLAR ImPACT


Profit or loss (2,879) 1,936 (1,120) (1,575) Equity 41,091 6,041 - -

The equity impact of a change in rate of Euro vis-à-vis the Mauritian Rupee is attributable mainly to net investment in the subsidiary in Réunion Island and also to the hedge reserve arising on hedge accounting of Euro loan.

The equity impact of a change in rate of US$ vis-à-vis the Mauritian Rupee is attributable mainly to net investment in the subsidiary, Naïade Resorts Maldives Ltd, and also to the hedge reserve arising on hedge accounting of US$ loan.





(ii) Interest rate risk management (continued)

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

The Group analyses its interest rate exposure on a dynamic basis. The Group considers various scenarios in assessing its interest rate exposure, including refinancing, renewal of existing facilities, alternative financing and hedging. Based on these scenarios, the Group calculates the sensitivity of the Group’s profit before tax to a defined interest rate shift. The scenarios are run only for liabilities that represent the major interest-bearing positions.

The interest rate profile of the Group at June 30, 2011 was:

Financial assets Balances Trade with banks debtors Interest rate Interest rate % %

GBP LIBOR-1% Nil EURO EURIBOR-1% Nil USD LIBOR-1% Nil MUR PLR - 3% Nil

Financial liabilities Bank overdrafts Loans Floating Fixed Floating interest rate interest rate interest rate % % %

GBP N/A Nil N/A EURO N/A 3.78% & 5.68% EURIBOR + 1.3% - 2% USD N/A Nil LIBOR +1.25% - 1.5% MUR PLR & PLR + 0.25% PLR & PLR + 0.25%

Interest rate sensitivity analysis

The sensitivity analysis below has been determined based on the exposure to interest rates for both derivatives and non-derivatives instruments at the balance sheet date. For floating rate liabilities, the analysis is prepared assuming the amount of liability outstanding at the balance sheet date was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rate.





Interest rate sensitivity analysis (continued)

If interest rates had been 50 basis points higher for MUR borrowings and 0.25 basis points for EURO borrowings impact will be as follows:

EuRO ImPACT


Profit or loss (2,760) (3,175) (358) (658) Equity - - - -

mAuRITIAN RuPEE ImPACT


Profit or loss (8,441) (9,952) (3,001) (1,890) Equity - - - - A decrease in interest rate by 50 basis points of MUR borrowings and by 25 basis points for EURO borrowings will have an

equal and opposite impact of an increase in the interest rate as shown above.

(iii) Other price risks

The Group is exposed to equity price risks arising from equity investments which are not material in any case. Equity investments are held for strategic rather than trading purposes. The Group does not actively trade these investments.

(iv) Credit risk management

The Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the statement of financial position are net of allowances for credit losses, estimated by the Group’s management based on prior experience and the current economic environment.

The Group has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers. The Group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. The Group has subscribed to a credit protection scheme for the client portfolio of Mauritius operations with a Global Service Provider, with a view to minimise its credit risk exposure. As far as operations are Réunion Island is concerned management makes full allowance for credit losses for amounts past due for more than one year. The maximum exposure of the Group is the carrying amount as disclosed in Note 12.

With respect to credit risk arising from other financial assets of the Group, which comprise of cash and cash equivalents, available-for-sales financial instruments, other receivables, the Group’s exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments.





(v) Liquidity risk management

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities. The Group aims at maintaining flexibility in funding by keeping reliable credit lines available.

The Group’s objective is to maintain a flexibility between continuity of funding and flexibility through the use of bank overdraft, bank loans and finance leases.

Liquidity and interest risk tables - financial liabilities - undiscounted

THE GROUP

Weighted average effective interest Less than 1 to 3 3 months 1 to 5 more than rate 1 month months to 1 year years 5 years Total % Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

June 2011

Non-interest bearing 696,599 96,963 - - - 793,292 Variable interest rate instruments 4.20% 372,427 153,451 346,453 2,112,232 1,643,419 4,627,982 Fixed interest rate instruments 5%,5.68%,9% - 20,067 36,193 239,085 727,970 1,023,315

1,069,026 270,211 382,646 2,351,317 2,371,389 6,444,589

June 2010

Non-interest bearing 507,431 91,342 99,930 - - 698,703 Variable interest rate instruments 7.00% 1,150,458 119,167 305,513 1,746,721 752,950 4,074,809 Fixed interest rate instruments 5.68% 7,717 892 1,799 156,445 239,650 406,503

1,665,606 211,401 407,242 1,903,166 992,600 5,180,015





(v) Liquidity risk management (continued)

Liquidity and interest risk tables - financial liabilities - undiscounted

THE COMPANY


June 2011 Non-interest bearing 117,674 - - - - 117,674 Variable interest rate instruments 6.67% 155,274 22,154 1,307,997 219,237 402,214 2,106,876 Fixed interest rate instrument - - - - 500,000 500,000

272,948 22,154 1,307,997 219,237 902,214 2,724,550

June 2010 Non-interest bearing 123,635 - - - - 123,635 Variable interest rate instruments 7.00% 1,023,077 10,421 1,041,753 169,359 96,250 2,340,860

1,146,712 10,421 1,041,753 169,359 96,250 2,464,495

The following table details the Group’s expected maturity for its non-derivative financial assets. The tables below have been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets except where the Group anticipates that the cash flow will occur in a different period.

Liquidity and interest risk tables - financial assets - undiscounted

THE GROUP


June 2011 Non-interest bearing 692,674 140,815 31,164 57,232 - 921,885 Variable interest rate instruments 7.02% - - 173,726 - - 173,726

692,674 140,815 204,890 57,232 - 1,095,611

June 2010 Non-interest bearing 677,996 379,203 39,000 77,513 - 1,173,712 Variable interest rate instruments 4.16% - - 579,613 315,000 - 894,613

677,996 379,203 618,613 392,513 - 2,068,325





Liquidity and interest risk tables - financial assets - undiscounted (continued)

THE COMPANY


June2011 Non-interest bearing 93,526 - - 58 - 93,584 Variable interest rate instruments 4.00% - - 2,857,960 - - 2,857,960

93,526 - 2,857,960 58 - 2,951,544

June2010 Non-interest bearing 122,075 - - 58 - 122,133 Variable interest rate instruments 5.00% - - 1,985,872 - - 1,985,872

122,075 - 1,985,872 58 - 2,108,005

(d) Fair value of financial instruments

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

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly

Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.



38 FINANCIAL SummARY

(a) THE GROUP

Year Six months ended ended Year ended December 31, June 30, 2011 June 30, 2010 2009 2008 Rs’000 Rs’000 Rs’000 Rs’000

Non-current assets 9,143,188 6,726,067 7,482,590 7,250,415 Current assets (note (i)) 1,060,317 1,420,004 1,323,441 2,040,319 Issued capital 1,140,346 862,568 862,568 862,568 Share premium account 391,819 194,386 194,386 194,386 Treasury Shares (18,081) (18,081) (18,081) (18,081) Revaluation and other reserves 1,339,963 1,469,091 1,479,595 1,465,142 Current liabilities (note (i)) 1,744,521 1,900,428 2,134,553 2,645,904 Non-current liabilities 5,098,992 3,629,309 3,408,543 2,985,883 Retained earnings 550,936 487,573 744,467 1,154,932 Revenue 3,153,615 1,166,071 2,390,338 2,470,551 Profit/(loss) before taxation 45,000 (227,114) (365,071) 277,037 Profit/(loss) attributable to equity holders of the parent 6,559 (256,894) (367,480) 276,405 Dividends - - 42,985 171,940

(i) Excludes assets and liabilities directly associated with assets held for sale.

(b) THE COMPANY

Year Six months ended ended Year ended December 31, June 30, 2011 June 30, 2010 2009 2008 Rs’000 Rs’000 Rs’000 Rs’000

Non-current assets 1,555,739 1,687,537 1,682,443 1,662,319 Current assets 2,955,344 2,281,730 2,110,555 2,130,259 Issued capital 1,140,346 862,568 862,568 862,568 Share premium account 391,819 194,386 194,386 194,386 Treasury shares (18,081) (18,081) (18,081) (18,081) Revaluation reserves 114,462 114,462 114,462 114,462 Retained earnings 265,796 325,619 - 449,635 Current liabilities 1,603,096 1,866,407 1,917,290 2,007,333 Non-current liabilities 1,146,504 623,906 361,639 182,275 Revenue 114,456 84,033 183,587 788,547 (Loss)/Profit before taxation (59,792) (34,445) (47,979) 622,837 (Loss)/Profit after taxation (59,292) (35,115) (45,916) 617,070 Dividends - - 42,985 171,940


Directors’ Profiles

Jean-Claude Béga

Born in 1963 and Fellow of the Association of Chartered Certified Accountants, Jean-Claude Béga joined GML in 1997 and is the Chief Financial Officer. He is also the Chairman of City Brokers Limited, Director of a number of corporations including Mauritius Stationery Manufacturers Ltd, Phoenix Beverages Limited, AfrAsia Bank Ltd and Sugar Insurance Fund Board and also member of various Board Committees.

He was appointed as Director and member of the Audit Committee of the Company in June 2004.

Directorship in other listed companies: Phoenix Beverages Limited, Mauritius Stationary Manufacturers Limited

Jean-Paul Chasteau de Balyon

Born in 1950, Jean-Paul Chasteau de Balyon is a member of the Chartered Insurance Institute (C.I.I.) from UK, of the Association of Company Secretaries of Mauritius and a Fellow of Mauritius Institute of Directors (M.I.o.D). He joined Swan Insurance in 1969 and is currently Director and Company Secretary of Swan Group Corporate Services Limited. He is a Council Member of the Mauritius Chamber of Commerce and Industry (Member of its Nomination and Remuneration Committee and of the Board of Governors, Centre d’Etudes Commerciales), member of the SEM Consultative Committee, as well as the Chairperson of the sub-committee of the Insurer’s Association on issues linked to the World Trade Organisation. He acts as director of a number of companies in the commercial and hotel sectors.

He was appointed as Alternate Director to Jean de Fondaumière from June 2004 to December 2006, reappointed as Alternate Director to Louis Rivalland from 23 March 2007 to 30 April 2010, appointed as Director in replacement of Louis Rivalland on 30 April 2010. He was appointed as member of the Audit Committee on 14 May 2010 and appointed as member of the Remuneration Committee and of the Corporate Governance Committee on 16 November 2010.

Directorship in other listed companies: Tropical Paradise Co. Ltd


Born in 1953, Jean de Fondaumière qualified as a Chartered Accountant (Scotland) in 1980 and worked in the fields of audit and merchant banking in Australia until he joined the Anglo-Mauritius Assurance Society Ltd in 1992. He retired from his position as Group Chief Executive of the Swan Group in December 2006. He is a director of two companies listed on the Official List of SEM, two listed on the Development & Enterprise Market of SEM and four unlisted companies. He was Chairman of the SEM between April 2002 and December 2006.

He was first appointed as Director of NRL in November 2003, resigned in December 2006 and was appointed as Director in replacement of Vincent Gombault on 25 March 2008 and as member of Remuneration Committees at the same date.

Directorship in other listed companies: Constance La Gaiete Company Limited, Deep River Beau Champ Limited, Harel Frères Limited, Hotelest Limited

Laurent de la Hogue

Born in 1975, Laurent de la Hogue holds a master degree in management and finance from “Ecole Supérieure de Gestion et Finance” in Paris, France. He joined GML Group in 2001 as Treasurer for the setting up of the central treasury unit before becoming Finance Executive - Corporate & Treasury in April 2011. He also serves as Director of a number of companies including Abax Holding Ltd, Axys Leasing Ltd, Freight & Transit Co. Ltd, GML Trésorerie Ltée and MSM Ltd. Prior to joining the Group, he was working with a major international bank operating in Mauritius.

He was appointed as Alternate Director to Virginie Corneillet in August 2009 and as Director in replacement of Mrs Virginie Corneillet on 15th February 2011.

Directorship in other listed companies: MSM Ltd


Directors’ Profiles (Continued)

l’Etoile d’Anjouan from the President of the Comores, both recognizing his contribution to the growth and development of the hotel and tourism industry in the respective countries.

He has been appointed as Chief Executive Officer of Naïade Resorts Ltd on 1st October 2010 and as Director on the Board on 29th September 2011.

Directorship in other listed companies: None

Arnaud Lagesse

Born in 1968, Arnaud Lagesse joined GML in 1993 and was appointed Chief Executive Officer in 2005. He holds a ‘Maîtrise de Gestion’ from University of Aix-Marseille III and is a Graduate of Institut Supérieur de Gestion from France. He also completed an Executive Education Program at INSEAD Fontainebleau, France and an Advanced Management Program (AMP180) at Harvard Business School, Boston, USA.

He was appointed as Director and Chairman of NRL as well as Chairman of the Remuneration Committee in October 2003 and as member of the Corporate Governance Committee in April 2005.

Directorship in other listed companies: Deep River Beau Champ Limited, Flacq United Estates Ltd, Forward Investment & Development Enterprises Ltd, Ireland Blyth Limited, Mauritius Stationery Manufacturers Ltd, Phoenix Beverages Limited, Phoenix Investment Company Ltd, Robert Le Maire Limited, The United Basalt Products Ltd, Union Flacq Ltd

J. Cyril Lagesse

Born in 1932, J. Cyril Lagesse set up in the early 1970s the ‘Compagnie d’Investissement et de Développement Limitée’, now GML Investissement, founder entity of today’s well known GML, which has positioned itself as one of the regional leaders. J. Cyril Lagesse sits on the board of several of the country’s most prestigious companies, some of which are listed on SEM.

He was appointed as Director of NRL in October 2003.

Directorship in other listed companies: Deep River Beau Champ Limited, Flacq United Estates Ltd, Forward Investment & Development Enterprises Ltd, Ireland Blyth Limited, Mauritius Stationery Manufacturers Ltd, Phoenix Beverages Limited, Phoenix Investment Company Ltd, Robert Le Maire Limited, The United Basalt Products Ltd, Union Flacq Ltd, Sun Resorts Limited

Désiré Elliah

Born in 1964, Désiré Elliah is a Fellow of the Association of Chartered Certified Accountants with 26 years experience in auditing, accounting and corporate finance. Before joining the Group in 2004 as Chief Financial Officer, he was a partner of DCDM, the largest accounting firm in Mauritius. He has extensive experience in feasibility studies, financial restructuring, share valuation and due diligence reviews.

He was appointed as Director of NRL in October 2004.


Alexis Harel

Born in 1962, Alexis Harel holds a Bachelor of Science Degree in Business Administration-Accounting from Louisiana State University, USA. He started his career in auditing with De Chazal Du Mée and then occupied managerial positions in the industrial and IT sectors. He joined Grays & Co in 1992 and currently holds the position of Commercial Director.

He was appointed as Director of NRL and as Chairman of the Audit Committee in April 2004 and as Chairman of the Corporate Governance Committee in April 2005.

Directorship in other listed companies: Harel Frères Limited, United Docks Ltd

Paul Jones

Born in 1949, Paul Jones has over 43 years of experience in the hotel industry and has significantly contributed to the establishment and development of the tourism industry of Mauritius. He was the Managing Director of Sun Resorts Ltd for almost 20 years and the company flourished under his leadership. As the former Chief Operating Officer and for the past 3 years as President of One&Only he has been instrumental in successfully developing the brand on a global basis. He holds a Master in Business Administration from the University of Surrey and completed the Program for Management Development of the Harvard Business School.

He is a Fellow of the Institute of Hospitality and was conferred the Dignity of Companion of the Order of St Michael and St Georges by her Majesty Queen Elizabeth II on the recommendation of the Prime Minister of Mauritius and also received the Chevalier de


Directors’ Profiles(Continued)

Hugues Lagesse

Born in 1975, Hugues Lagesse holds a diploma in administration and finance from “Ecole Supérieure de Gestion et Finance” in Paris, France. In September 2007, he followed a course on Management at INSEAD in Fointainebleau, France and a course in Real Estate development in Paris and at Harvard Business School in Boston, USA.

He is the Project Executive of Indian Ocean Real Estate Company (IOREC), a member of Groupe Mon Loisir which deals with the development and management of land property.

He was appointed as Alternate Director to J. Cyril Lagesse in April 2004.

Directorship in other listed companies: MSM Ltd (Alternate to J. Cyril Lagesse), Sun Resorts Ltd (Alternate to J. Cyril Lagesse)

Deodass Poolovadoo

Born in 1962, Deodass Poolovadoo was one of the first persons to join NRL in 1990. He graduated in Accounting and Finance from the UK and is responsible for the financial management of NRL and of its subsidiaries.

He is also involved in the affairs of the tourism industry with AHRIM.

He was appointed as Alternate Director to Désiré Elliah in August 2009.


Stéphane Lagesse

Born in 1959, Stéphane Lagesse holds a degree in Gestion des Entreprises Parix IX Dauphine and joined the Palmar Group in 1983 where he currently holds the position of Managing Director. He participated in the setting up two garment manufacturing companies in Mauritius.

He was appointed as Director of NRL in March 1999 and as a member of the Audit Committee in October 2003.


Alternate Directors’ Profiles

Jean-Raymond Harel

Born in 1934, Jean-Raymond Harel completed a Bachelor of Science in Chemical Engineering from Louisiana State University in Baton Rouge, Louisiana, USA, in 1957. He had a rich career in the Sugar Industry and relative fields such as design of equipment, general engineering, preliminary studies leading to the implementation of a thermal power plant and setting up of an alcohol distillery. He retired from his executive functions a few years ago.

He was appointed as Director of NRL in July 1998 and as Chairman of NRL from October 1998 to November 2002. He resigned as Director and was appointed as Alternate Director to Alexis Harel in April 2004.


Amaury Lagesse

Born in 1961, Amaury Lagesse has studied Management in South Africa and started working in a clothing company in Durban for one year. He then specialised in textile management in England and Scotland before joining in 1987 the Palmar Group, where he currently holds the position of Production Manager.

He was appointed as Alternate Director to Stéphane Lagesse in December 2003.



Senior Management Profiles

guillaume Valet

Born in 1974, Guillaume Valet holds a Master’s Degree

in Business & Corporate Law from France, as well as a

Diploma in English Law. He joined Naïade Resorts in

December 2010 as ‘Group Head of Legal, Secretarial

& Corporate Affairs.’ Guillaume has worked for Clarel

Benoit Chambers and De Chazal Du Mée (the largest

accounting firm in Mauritius). Before joining Naïade, he

was in charge of Legal & Corporate Affairs for the Food

& Allied Group of Companies.

Jeff Butterworth

Chief Spa and Wellness Officer, Jeff Butterworth is

a qualified naturopathic doctor with over 18 years’

experience in the spa and wellness industry. An

Australian national, Jeff began his career establishing

several successful medical practices, lecturing at

university and developing several leading health

supplement’s. In 2002, he ventured into the spa

industry establishing a 5 star wellness retreat in India.

Most recently joining Jumeirah international in Dubai

to establish the spa brand, Talise, Jeff has become

known as an industry leader in developing integrated

spa and wellness programs.

Pritila Joynathsing-gayan

Born in 1978, Pritila is a Certified Internal Auditor from

the Institute of Internal Auditors. She has more than

eight years’ experience in internal auditing. Prior to

joining Naïade in July 2011, she was the senior manager

in charge of Risk Advisory Services at PwC, where she

set up internal audit and process improvement services.

She has experience in hospitality, financial and retail

services. Pritila holds a BSc in Actuarial Science from

the University of Kent.

Paul Jones

Pleaserefertopage98–Directors’Profiles.

Désiré Elliah

Pleaserefertopage98–Directors’Profiles.

Nicolas Autrey

Born in 1977, Nicolas Autrey joined Naïade Resorts

in August 2008 as Assistant Group Human Resources

Manager and was promoted to Group Human

Resources Manager in January 2010. He has more than

twelve years’ experience in the Human Resources field,

having already worked in the Textile, Hospitality and

Commercial sectors before joining the group. Nicolas is

a holder of an MSc in Human Resources Management

from the University of Surrey.

Julian Hagger

Born in 1970, Julian Hagger has a very rich career

of some 16 years in Sales and Marketing in the

Hotel Industry at international level. Mr. Hagger

has spent more than 12 years at top Management

and Corporate levels in prestigious international

groups such as Ritz-Carlton, Marriott and Orient-

Express. Before joining Naïade, Julian was the

Executive Director – Worldwide Sales of Orient-Express

and was based in their headquarters in London.

Julian is a holder of a Science Degree in Business

Administration (Hawaii Pacific University, U.S.A),

and also holds a diploma in Hotel Management with

specialisation in Sales and Marketing (Hotel Institute of

Management, Montreux, Switzerland).


Notice to Shareholders

Notice is hereby given that the Annual Meeting of Shareholders of the Company will be held at its Registered Office, Pierre Simonet Street, Floreal, on Wednesday 21st December 2011 at 9h30 with the following agenda:

Ordinary Resolutions

1 To consider and approve the audited financial statements for the year ended 30th June 2011

2 To receive the auditors report

3 To consider the annual report

4 To elect Mr Laurent de la Hogue as Director of the Company

5 To elect Mr Paul Jones as Director of the Company

6 To re-elect Mr J. Cyril Lagesse as Director of the Company under Section 138(6) of the Act

7 To re-appoint the auditors under Section 200 of the Companies Act 2001 and to authorise the Board to fix their remuneration

8 To ratify the remuneration paid to the auditors for the year ended 30th June 2011

Special Resolution

9 To delete clause 13.1.6 of the Constitution which reads as follows:

13.1.6 The Company shall not consider any notice sent by a Shareholder pursuant to article 13.1.5 unless that notice is received by the Company between 01 January and 31 July in any year

By Order of the Board

Désiré ElliahPoséidon Limitée

Secretary

29th September 2011

A shareholder of the Company entitled to attend and vote at this meeting may appoint a proxy (in the case of an individual shareholder) or a representative (in the case of a shareholder company, by way of a written board resolution), whether a member or not, to attend and vote on his behalf.

The instrument appointing a proxy, any general power of attorney or the written resolution appointing a representative should reach the Group Company Secretary, Pierre Simonet Street, Floreal, Mauritius, not less than twenty four hours before the time appointed for the holding of the meeting or adjourned meeting. In default, the instrument of proxy shall not be treated as valid.

A proxy form is included in this annual report and is also available at the registered office of the Company.

For the purpose of this Annual Meeting, the Directors have resolved in compliance with Section 120 (3) of the Companies Act 2001, that the shareholders who are entitled to receive notice of the meeting and attend such meeting shall be those shareholders whose names are registered in the share register of the Company as at 28 November 2011.

This notice is issued pursuant to Listing Rule 11.16.

The Board of Naïade Resorts Ltd accepts full responsibility for the accuracy of the information contained in this notice.


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Chasteau de Balyon Jean Paul •

De Fondaumière Jean •

De la Hogue Laurent •

Elliah Désiré • • • • • • • • • • • • • • • • • • •

Harel Alexis • • • • • •

Jones Paul • • • • • • • • • • • • • • • • • • • • •

Lagesse Arnaud • • • • • • • • • • • • • • • •

Lagesse J. Cyril •

Lagesse Stéphane •

Mein Gemma • •

The Situation as regards Directorships at 30 June 2011 is as follows:


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Burian Peter • •

Chasteau de Balyon Jean Paul •

De Fondaumière Jean •

De la Hogue Laurent •

Elliah Désiré • • • • • • • • • • • • • • • • • • •

Harel Alexis • • • • • •

Jones Paul • • • • • • • • • • • • • • • • • • • • •

Lagesse Arnaud • • • • • • • • • • • • • • • •

Lagesse J. Cyril •

Lagesse Stéphane •

Mein Gemma • •


Proxy Form

I / We

of

being a shareholder of Naïade Resorts Ltd hereby appoint

of

or failing him/her,

of

Meeting of Shareholders of the Company to be held at the Registered Office, Pierre Simonet Street, Floréal on Wednesday 21st December 2011 commencing at 9h30 and at any adjournment thereof.

I/We direct my/our proxy to vote in the following manner:Vote with a tick

Ordinary Resolutions For Against

1 To consider and approve the audited financial statements for the year ended 30th June 2011

2 To receive the auditors report

3 To consider the annual report

4 To elect Mr Laurent de la Hogue as Director of the Company

5 To elect Mr Paul Jones as Director of the Company

6 To re-elect Mr J. Cyril Lagesse as Director of the Company under Section 138(6) of the Act

7 To re-appoint the auditors under Section 200 of the Companies Act 2001 and to authorise the Board to fix their remuneration

8 To ratify the remuneration paid to the auditors for the year ended 30th June 2011

Special Resolution

9 To delete clause 13.1.6 of the Constitution which reads as follows:

13.1.6 . The Company shall not consider any notice sent by a Shareholder pursuant to article 13.1.5 unless that notice is received by the Company between 01 January and 31 July in any year

Signed this Signature

NaïadeResortsLtd•RegisteredOffice•PierreSimonetStreet•Floreal


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NAÏADE RESORTS LTD ANNUAL REPORT 2011

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ISLA

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RTS

“As part of its ongoing programme to help protect the environment and within the context of the GML “Think Green” initiative, GML companies have once again chosen to use Cocoon paper for their Annual Reports.

Cocoon paper is made from 100% recycled pulp, certified FSC (Forest Stewardship Council).

FSC is an international, non-governmental, non-profit making organisation created in 1993. It encourages socially, ecologically and economically responsible forestry management initiatives.”

By using Cocoon Offset rather than a non recycled paper, the environmental impact was reduced by :

Source: Carbon footprint data is calculated by the Edinburgh Centre for Carbon Management in partnership with The CarbonNeutral Company. Calculations are based on a comparison between recycled paper versus virgin fibre paper produced at the same mill, and on the latest European BREF data (virgin fibre paper) available. Results are obtained according to technical information and subject to change.

1,877kg of wood

25,346litres of water

219kg of CO2 ofgreenhouse gases

1,155kg of landfill

2,341kWh of energy

1,562km travel in theaverage European car

CONTENTS

◦ Value Added Statement 2

◦ Financial Highlights and Ratios 3

◦ Board and Committees 4

◦ Management 5

◦ Administration 6

◦ Group Structure 7

◦ Chairman’s Report 8-9

◦ CEO’s Report 12-17

◦ Corporate Governance Report 18-28

◦ Other Statutory Disclosures 29-34

◦ Secretary’s Certificate 35

◦ Independent Auditors’ Report 36

◦ Statements of Financial Position 37

◦ Statements of Comprehensive Income 38-39

◦ Statements of Changes in Equity 40

◦ Statements of Cash Flows 41

◦ Notes to the Financial Statements 42-96

◦ Directors’ Profiles 97-99

◦ Senior Management Profiles 100

◦ Notice to Shareholders 101

◦ Directorship 102-103

◦ Proxy Form 105

Naïade Resorts Ltd • Pierre Simonet Street • Floreal • MauritiusTel: +230 698 9800 • Fax: +230 697 5800 • Email: [email protected]

SOMETHING MOMENTOUS IS HAPPENING

IN THE INDIAN OCEAN

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