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2 INTRODUCTION

3 Who we are

4 Our Vision

7 Our Values

8 Chairman’s Message

10 Managing Director’s Report

14 STRATEGIC REPORT

15 Review of Operations

21 History of Vivo Energy in Mauritius

22 Our Shareholders

24 FINANCIAL STATEMENTS

26 Directors’ Report

29 Secretary’s Report

31 CORPORATE GOVERNANCE

31 Corporate Governance Report

56 Statement of Compliance

59 Independent Auditor’s Report

63 Income Statement

64 Statement of Comprehensive Income

65 Statement of Financial Position

66 Statement of Changes in Equity

67 Statement of Cash Flows

68 Notes to the Financial Statements

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Vivo Energy Mauritius Limited Annual Report 20162 Vivo Energy Mauritius Limited Annual Report 2016 3

Vivo Energy is the company behind the Shell brand in Africa and is jointly owned by Vitol and Helios Investment Partners. The company has a strong and growing presence in 16 countries across Africa.

It sources, distributes, markets and supplies Shell’s high-quality fuels and lubricants to retail and commercial customers across the continent. Vivo Energy was established on 1st December 2011 to distribute and market Shell-branded fuels and lubricants. Vitol and Helios each own 40% of Vivo Energy, with Shell holding the remaining 20%. Shell and Vivo Lubricants is 50% owned by Shell and 50% owned by Vitol

and Helios Investment Partners. Vivo Energy operates in Retail, Commercial Fuels, Marine, Aviation (in partnership with Vitol Aviation), Liquefied Petroleum Gas and Lubricants in Mauritius. The Shell brand has been present in Mauritius since 1905, celebrating its 111th anniversary in 2016.

Vivo Energy Mauritius Limited (VEML) is a public interest entity as defined by law. It employs 121 people, operates 48 retail stations under the Shell brand and has access to 34,500 metric tonnes of fuel and 2,675 metric tonnes of LPG storage capacity.

WHO WE AREA strong and growing presence in 16 countriesacross Africa

IdIntroduction

Our vision is to become Africa’s most respected energy business.

To become Africa’s most respected energy business is not an end in itself. It is the logical consequence of doing things the right way, realising the full potential of our people and our business partners, and creating a new benchmark for quality, excellence, safety and responsibility in Africa’s downstream energy marketplace.

We know that respect is earned and that actions speak louder than words. We strive constantly to behave ethically, responsibly and honourably in everything we do. We take care of our people, our customers and the local communities and the environment in which we operate.

We meet the highest international Health, Safety, Security and Environmental (HSSE) standards. We continue to invest in our operations, building stronger partnerships and implementing world-class safety practices. We set an example for others to follow.

Above all, we grow our business by hiring, training and motivating the best local people, sharing the rewards of success and investing in the communities in which we operate.

OUR VISIONBecoming Africa’s most respectedenergy business


Vivo Energy Mauritius Limited Annual Report 2016 7

We are judged by how we act and our reputation is upheld by how we put into practice our core values of honesty, integrity and respect for people.

These values underpin all the work we do and are the foundation of our business. We always strive to uphold them, in whatever situation we find ourselves in. Indeed, they are crucial to our success and growth as a company, and to achieving our vision.

These core values are encapsulated in our General Business Principles and Code of Conduct, which outline clear, concrete and detailed principles and ethical actions by which we

should conduct ourselves, and drive the behaviour expected of every employee, in every Vivo Energy operation, at all times.

We employ a diverse group of people and value the benefits this brings. We respect the human rights of our employees and strive to provide them with safe working conditions, promote the development of their talents and give them channels to report concerns.

We also firmly believe in the fundamental importance of trust, openness, teamwork, professionalism and pride in what we do.

OUR VALUES

Vivo Energy Mauritius Limited Annual Report 20166

Dear Shareholders, 2016 was another year of significant progress for Vivo Energy Mauritius Limited (VEML) with profit after tax registered was Rs 320 million in 2016, compared to Rs 283 million in 2015. Despite many challenges faced from the external environment in 2016, VEML has grown, investing in making its operations more efficient, adding new retail stations to its portfolio, growing its market share and adding new and refurbished convenience retail outlets. We had an excellent HSSE performance in 2016, exceeding the stringent targets set. I know that the team has worked hard to ensure the safety of our people and those around us. We have kept building the reputation of the company, never losing focus on doing business the right way, enhancing our environmental footprint through better quality goods, services and efficiency and playing an active part in our communities. In summary VEML is in great shape. We have set ambitious targets for 2017 and will continue to build on the positive results and momentum from 2016 to continue the sustainable growth of the company. I have no doubt that 2017 will be another important and successful year helping us progress towards our vision of becoming the most respected energy business in Mauritius. I offer my thanks to the directors for all of their contributions to and governance of VEML. I would also like to extend my appreciation to the Managing Director and his management team, for their drive in delivering results year on year. The progress we made in 2016, the value we created for our customers, and the financial results we delivered would not have been possible without the dedication and hard work of our employees, and I would like to express my gratitude to all of them for their efforts. Our strategy has delivered strong results for VEML and the Shell brand remains the preferred customer brand and market leader. This gives me every confidence that we will again grow the business in 2017 and create further value for you, our shareholders. Christian ChammasChairman


CHAIRMAN’SMESSAGE



Vivo Energy Mauritius has seen another year of strong growth in 2016 showing that we have the right strategy in place and that we have an excellent team of people who have brilliantly executed it.

Looking back at 2016, the oil industry was filled with many challenges. Throughout the volatility of oil prices on the international market, continued slow-down of some sectors in the local market and increased competition both locally and internationally, we managed the challenges head-on and are building a stronger company year by year.

BUSINESS PERFORMANCEOverall performance was good, we succeeded in maintaining our leadership position and we achieved favourable results in most segments of the business. The aviation business performed better in 2016 compared to previous years, and this was mainly due to several strategic cost efficiency initiatives driven during the course of the year. With regard to marine, we leveraged previous initiatives related to the partial liberalisation of fuel imports, including putting our new bunkering barge into operation, coupled with the supply of marine fuel oil 380 cst. Both our retail and LPG volumes grew in 2015. The margin increase in LPG midway through 2016 helped improve the financial performance. On the other hand the retail margin review by the regulator still remains overdue. Our commercial businesses delivered good overall performances too, despite below expectation growth in the construction and transport sectors.

InvesTmenTInvesting for growth remains our winning strategy. With the opening of our latest stations in Rivière noire and Diolle Junction, we now operate the largest network in the country with 48 shell-branded service stations. We upgraded a number of stations during the year, with a complete knock down and rebuild of our station in saint Paul. With the opening of the first KFC outlet on a station at shell Golden in Goodlands and additional Hearty outlets, we increased our footprint of shops in 2016. We are pleased with the investment we made in our new LPG filling line, which is of higher capacity and more efficient than the previous one. In line with the general aspiration to further strengthen Port Louis as a bunkering destination, we increased our storage capacity in our Causeway heavy fuel oil depot.

OuR CusTOmeR FOCusWe maintained our excellent customer service levels and continued to be at the forefront of industry innovation. We launched new marketing campaigns, creating unique experiences for our smart Club members, whilst further growing our brand. Over and above allowing customers to accumulate and redeem points for rewards all year round, our Smart Club members won star prizes, namely a stay for two in a 5-star hotel which included a helicopter tour of the island, an all-inclusive package for two to watch the finals of euro 2016 in Paris and an environmentally-friendly home for our Christmas campaign. In order to capture the requirements and feedback from our customers to provide them with best in class service and product quality, we have put in place the ‘Voice of the Customer’ programme.

Delivering quality products and services remain high on our agenda and the company has continued its effort in working towards operational excellence. Vivo Energy Mauritius achieved a new milestone with the IsO-9001-2015 certification. We have also pursued this quest for quality into our Convenience Retail shops.

MANAGINGDIRECTOR’S REPORT


Vivo Energy Mauritius Limited Annual Report 2016 13Vivo Energy Mauritius Limited Annual Report 201612

All the above are aimed to enhance the Shell customer experience. So far, I am encouraged with the results delivered, especially when I see the continued increase in our loyal customer base.

OuR PeOPLe – aT THe CenTRe OF eveRyTHInG We DOTo meet the evolving needs of our customers, our efforts go into attracting and engaging the best talent with the right skills. In 2016, we recruited ten new employees and three young graduates joined under the youth employment Programme. We also gave the opportunity to four interns by hiring them for short term assignments and helped them develop the skills they need and acquire on-the-job experience. We keep investing in training and development of our people. We held a team building activity for all employees during the course of the year and visioning workshop was organised to engage and align employees on the company’s vision.

A people survey was carried out in 2016 and the results show ‘purpose and values’ as a key strength of the company. An action plan is in place and actions already started to build on the strengths and address the areas for improvement following the feedback received from employees.

COmmunITy InvesTmenTWe are committed to making a meaningful contribution to the communities where we operate. This includes maximising the local employment and economic development opportunities that our projects can provide. We are proud to support community projects in the ten districts of Mauritius, in the areas of road safety, education and environment and we encourage our employees to volunteer in our community activities.

HeaTH, saFeTy, seCuRITy anD envIROnmenT (Hsse)Once again, we had a very good Hsse record in 2016. We closed yet another “Goal Zero” year. no recordable incident or spill, no recordable Lost Time Injury for 650,000 exposure hours and 1,300,000 kilometres driven. It is a matter of pride that we extended our Goal Zero record to 1,784 days in 2016. This is thanks to the effort of every employee, every contractor, every retail site staff member and every customer who never become complacent when it comes to Hsse.

OuTLOOKDespite the changing industry environment and the challenges resulting from volatile oil prices, I remain confident in the future of the company. vemL is already equipped with a solid foundation to deal with external risks and we have demonstrated how resilient we are and determined to fight for maintaining our leadership position.

I am deeply thankful to all those who have contributed to this success. I must express my gratitude to the Board of Directors for their trust, steer and invaluable counsel. Without the commitment and staunch support of my management team, the company would not have made such remarkable progress over the years. And none of it would have been possible without the dedication and hard work of our staff - I want to thank all of them for their efforts in 2016.

Together, we are committed to keep working hard, hand in hand with all our stakeholders, for an even more successful 2017. vivo Energy Mauritius has a bright future ahead.

Pawan K Juwaheermanaging Director


ReTaILThe highest quality products and a world-class retail experience.

2016 saw the opening of a new service station in Riviere Noire which contributed to further growing our well-distributed network under the Shell brand across the country.

Our customers have continued to enjoy driving longer distances with better efficiency and more engine protection thanks to our differentiated fuels, Shell FuelSave Unleaded and Shell FuelSave Diesel.

During the year, a number of stations were upgraded. We undertook major upgrade at Shell Saint Paul service station and re-opened Shell Paillotte. Our focus on continuous improvement ensures that our service stations are clean, efficient and welcoming with all offering high-quality Shell fuels, lubricants and LPG. We also offer Shell Autogas, Shell Gas Lite, car wash and tyre service facilities on selected sites.

In 2016, a number of marketing activities were organised, to reward our loyal customers, members of the Smart Club Loyalty Programme. Over and above allowing customers to accumulate points to redeem for rewards all year round, our Shell Smart Club members won star prizes, namely a stay for two in a 5-star hotel which included a helicopter tour of the island, an all-inclusive package for two to watch the finals of Euro 2016 in Paris and an environmentally-friendly home for our Christmas campaign.

In our effort to improve our offer on retail stations, VEML continued to partner with reputable companies to offer new services, with the aim of making our service stations one-stop shops. We opened the first KFC outlet on a service station at our Shell station in Goodlands. By the end of 2016, the company was operating convenience shops on 18 sites and a series of quick service restaurants (Subway on three sites, KFC on one site, Food Lovers on one site and “Hearty”, our in-house brand offering freshly baked products, on seven sites).

With regard to operational excellence, we continued the “Mystery Motorist Programme” to monitor and ensure quality and enhance service to customers on site. We launched the Voice of Customer to capture feedback from our customers and provide them with best in class service and product quality. For the first time, we organised an Emerging Retailers’ Workshop, targeting our new generation of retailers, which took place at our training centre located at Shell Pineview service station in La Vigie.

2017 looks promising for further growth through new offers and the further development of our retail network.

COMMERCIALSupplying transport and industrial fuels, lubricants and greases to business-to-business customers.

VEML has been successful in maintaining its leadership position for the supply of fuels, lubricants and greases to business-to-business customers by constantly championing

REVIEWOF OPERATIONS


StStrategic report


its customers and anticipating their needs. With Shell’s unmatched portfolio of differentiated fuels, the company delivers products to customers across all sectors such as transport, construction, textile, agriculture, manufacturing, power, hotels and restaurants. The company continually strives to add value to the business by reviewing the processes with a view to simplifying and enhancing the customer experience. VEML has maintained its high HSSE standards through regular training and toolbox talks with its customers, who highly value these initiatives.

Compared to the previous year, the market registered a negative growth in 2016 for the supply of fuels. The construction sector was expected to pick up, however major projects from the public sector have been postponed to 2017. This has, in turn, impacted the transport sector. Pressure on margins is constantly increasing as we operate in a mature market where opportunities for growth are limited. Yet, we have been able to secure long term contracts with customers with whom we entertain strong relationships and have won medium term tender businesses.

On the other hand, bulk LPG volume has increased compared to 2015 thanks to key customers secured in our portfolio.

LIqueFIeD PeTROLeum GasProviding LPG in various cylinder sizes and bulk for domestic, commercial and industrial applications.

Liquefied Petroleum Gas (LPG), being a clean and convenient source of energy, is used worldwide for numerous business applications in industry and transportation, as well as for domestic use. VEML supplies Shell Gas to commercial sectors such as textiles, hotels, livestock breeding, catering, restaurants and industry. Easy to transport and to store, LPG has long been a competitive source of energy and for domestic applications. It is cheaper than electricity.

In recent years, the market has become more competitive, although despite this, the company has managed to limit the impact on its LPG business. VEML continually strives to deliver better, safer and more reliable ways to meet the energy needs of customers, while guaranteeing a continuous and regular supply of LPG to our customers. We have a wide distribution network which consists of some 900 resellers throughout Mauritius and Rodrigues. In addition, the company provides a home delivery service in selected regions through a network of resellers, and through our distributor, Gas Transport Limited, for 12 kg commercial and 50 kg cylinders.

Shell Gas is sold in a variety of cylinder sizes for various applications: 5 kg and 12 kg for domestic purposes, 50kg for both domestic and commercial use, 12 kg for commercial use and industrial applications and 12/15 kg for forklift applications. Our product range is backed by our expertise, dedicated account managers and rigorous safety standards.

To respond to customers’ expectations and needs, the company introduced Shell Gas Lite, the first lightweight LPG cylinders for domestic use in Mauritius. Made from composite materials, it is lighter, rust-free and more manageable than the traditional metal cylinders on the market. Besides being 7 kg lighter than metal cylinders, our new cylinder is translucent, which allows customers to see when the LPG is running low.

2016 was a good year for the LPG business, with volumes above plan and additional margin for packed domestic LPG obtained in July 2016.

LuBRICanTsProviding a full range of lubricants for automotive, marine and industrial applications.

VEML offers a complete range of lubricants, greases and services to all market segments be it retail, commercial and marine customers, available from our comprehensive network of Shell service stations, spare parts shops and franchises, as well as independent workshops.

In the retail segment, our new automotive lubricants formulation enhancing engine cleanliness and better protection, has been designed for the latest technology vehicle manufacturers giving our customers peace of mind when using Shell Lubricants. We continued to build trust in our business-to-business partners by offering them Shell’s industry leading lubricants technology and technical expertise, which resulted in more customers valuing our products. We helped them meet their most demanding business challenges in terms of reduced cost and lower downtime, hence improving their business performance.

2016 results were slightly below plan given the slowdown in activities, specifically in the construction sector.

We are seeing a better future in 2017 in most of the major segments and more specifically in the construction, agricultural and transport sector.s To further meet customer expectations in terms of quality and professionalism, VEML will bring some innovations in the lubricants industry in 2017.

MARINEProviding marine fuel oil, marine gasoil and Shell lubricants.

2016 was another good year for the marine business. The business leveraged previous initiatives related to the partial liberalisation of fuel imports, including putting a new bunkering barge into operation and the introduction of marine fuel oil 380 cst as well as extending our customer base. This resulted in the marine business margins being above plan for 2016. However Port Louis is still not as competitive as its direct competing ports (Singapore and South Africa) due to higher supply costs. Despite this, we managed to maintain our margins by properly managing stock and capitalising on our own fuel imports at the right time.

With our new barge, Gulf Star 1, we doubled our logistics capabilities at anchorage. We also increased our storage capacities for fuel oil, with new storage of 8,000 m3 coming into operation in 2016. VEML wants to contribute to the development of Port Louis maritime activities and is looking forward to grasping growth opportunities.

avIaTIOnSupplying products and related services to the aviation industry.

The aviation business performed better in 2016 compared to previous years, mainly due to several strategic initiatives implemented during the course of the year with the aim to reduce stock exposure and maintain contractual margins. This resulted in the aviation business performing above plan, both in terms of volumes and margins. The industry environment remained challenging with low margin levels still prevailing during the tender process.

Compared to 2015, industry volume grew by 11%, with the increasing number of flights to Mauritius. Our aviation business is prepared to adapt to challenges and seize opportunities as they arise in the market.

CusTOmeR seRvICe CenTReA one-stop shop for our customers.

Through our call centre, we provide basic services, such as order taking from retail and commercial customers for fuels and lubricants, complaints handling, invoicing and responding to queries on customer accounts. Our services also include debtor follow up, maintenance calls management, lubricants

and Liquefied Petroleum Gas delivery scheduling and telesales and telemarketing support.

Calls are handled by our trained agents who act as business and service focal points for HSSE,commercial, lubricants, LPG, aviation and marine. We face an ever-growing demand for services, both internally and externally.

Besides being the only petroleum company operating such comprehensive customer service in the country, we are continuously revisiting our processes and striving to maintain high performance through focus and emphasis on people development and staff motivation.

PRODuCT suPPLIes anD DIsTRIBuTIOnDistribution

VEML owns and operates two depots, namely Roche Bois and Causeway and operates three other depots on behalf of the oil industry, one at Fort William for the storage of fuel oil on behalf of the Central Electricity Board, the second one in Rodrigues Island, and the third, a joint venture LPG storage, ESCOL in which VEML owns 50% equity.

The company holds 23.5% of the shares of Mer Rouge Oil Storage Terminal Company Limited (MOST), a Joint Venture set up with the oil companies and STC to build and operate an additional 25,000 metric tonnes motor gasoline depot in Mer Rouge.

Distribution to retail outlets, industrial customers and the airport is effected by bulk delivery vehicles for white oils and black oils. Another fleet of vehicles distributes LPG cylinders across the island to retailers, while bulk LPG is delivered through specialised vehicles. Deliveries to marine customers is conducted either through bunkering barge or through pipelines at quays.

Human ResOuRCesOur people, our biggest asset.

At Vivo Energy, we are committed to the continual development of our people. We understand that, as a business, we can only be as good as the individuals we employ, and for that reason we actively seek out people with the rare combination of skill, experience, responsibility, commitment and ambition that will help make VEML a

Review of operations


respected and successful company and an employer of choice. The company is very culturally diverse, which helps to bring different perspectives.

In 2016, VEML recruited ten new employees and three young graduates joined under the Youth Employment Programme. The company also hired four interns for short term assignments and helped them develop the skills they need and acquire on-the-job experience.

We keep investing in training and development of our people and the average training days per person in 2016 was three days. We also held a team building event for all employees in October 2016.

The company is committed to developing and promoting local talent wherever possible. Employees who want to make a difference and have the energy, professionalism and drive to achieve more and motivate others are given learning and growth opportunities and outstanding performance is recognised.

COmmunITy InvesTmenT

At Vivo Energy, we want to make a real and lasting difference to the communities in which we operate. We have chosen to focus on three key areas of community investment: road safety, education and the environment. Our community investment programmes matter to us because we employ local people and serve local businesses and individuals. We want to create sustainable social and economic benefits for these communities and engage with them to earn their respect and trust.

For the fourth year running, we held our annual Road Safety Day, in collaboration with the Ministry of Education and Human Resources, in all primary schools in Mauritius and Rodrigues. We organised a video clip competition to further sensitise young people on the importance of road safety. With regard to our support to education, we have continued to work with the NGO Junior Achievement Mascareignes to help disadvantaged youth build a brighter future for themselves through skills development. We held a Vivo Energy Youth Day to help prepare young students for the world of work. We also continued to upgrade of the environment close to our office. Many of our employees have volunteered in the community investment activities of the company.

HeaLTH, saFeTy, seCuRITy anD envIROnmenT

Our commitment to achieving and maintaining the highest international Health, Safety, Security and Environment (HSSE) standards is at the heart of our business and is a key differentiator for Vivo Energy in Africa. Being the best in HSSE is not an objective that sits apart from our overall ambitions. It is an integral and essential part of our business plan.

We know that our retail, commercial and marine customers recognise and value the standards we set ourselves in HSSE and social performance. We also know that the maintenance and advancement of these standards will play a key role in winning new customers, building loyalty, engaging communities, motivating our employees and growing our business. We are diligent in reporting incidents and identifying potential incidents. It is part of a company-wide culture that extends to employees, contractors and partners alike. For our employees, adherence to HSSE policy and practice is a performance target linked directly to their pay.

In 2016, the company celebrated its annual Safety Day, a significant milestone in the company’s journey to build a stronger safety culture in its pursuit of Goal Zero of no harm to people or the environment, under the theme “See it; Prevent it; Report it”.

Hsse PeRFORmanCe 2014-2016

2014 2015 2016Fatality zero zero zeroTotal Recordable Cases zero zero zeroTotal Recordable OccupationalIllness Frequency zero zero zeroExposure Hours (‘000) 475 783 645Lost Time Injury zero zero zeroSpills zero zero zeroKilometres driven (‘000s) 1,902 1,614 1,238


Vivo Energy Mauritius Limited Annual Report 2016 21Vivo Energy Mauritius Limited Annual Report 2016 21

Vivo Energy is the company behind the Shell brand in Africa and is jointly owned by Vitol, Helios Investment Partners and Shell. The company has a strong and growing presence in 16 countries across Africa. It sources, distributes, markets and supplies Shell’s high-quality fuels and lubricants to retail and commercial customers across the continent.

Vivo Energy was established on 1st December 2011 to distribute and market Shell-branded fuels and lubricants. Vitol and Helios each own 40% of Vivo Energy, with Shell holding the remaining 20%. Shell and Vivo Lubricants is 50% owned by Shell and 50% owned by Vitol and Helios Investment Partners. Vivo Energy operates in Retail, Commercial Fuels, Marine, Aviation (in partnership with Vitol Aviation), Liquefied Petroleum Gas and Lubricants in Mauritius.

The Shell brand has been present in Mauritius since 1905, celebrating its 111th anniversary in 2016. VEML employs 121 people, operates 48 retail stations under the Shell brand and has access to 34,500 metric tonnes of fuel and 2,675 metric tonnes of LPG storage capacity.The Shell Company of East Africa Limited started its

marketing operations in Mauritius in 1905 through its managing agents, Blyth Brothers and Company Limited. As such, Shell was the first international oil company to set up business on the island and its close partnership with Blyth has been the cornerstone of a successful development. Most of the sites of current service stations, depot and customer portfolio were acquired during this time.

As part of a regional corporate reorganisation in the late 1950s, the Shell Company of East Africa was replaced by the Shell Company of the Islands Limited, a branch of a company incorporated in the United Kingdom. After the irreversible turmoil on the international oil scene in the early 1970s and recognising the need for oil companies to have their own identity and direct dialogue with Government, Shell and Ireland Blyth Limited, who was then the oldest Shell agent in the world, negotiated the terms of the agency agreement. In 1976, Shell took over its own business management in Mauritius, directly promoting its activities, engaging its own staff and opening its own offices. As a result of a decision made by the Shell and BP groups to deconsolidate their joint business interests in Africa in 1982, BP Ocean Islands Limited’s activities in Mauritius were taken over by Shell

HISTORY OFVIVO ENERGY IN

MAURITIUSVivo Energy, the Shell licensee in 16 African markets,was established on 1st December 2011 to distribute

and market Shell branded fuels and lubricants.



to become Shell Ocean Islands Limited. Both The Shell Company of the Islands Limited and Shell Ocean Islands Limited were given the status of a Public Limited Company (plc) as a result of a change in British Company Law. On 1 January 1991, the businesses of the local branch of both The Shell Company of the Islands plc and Shell Ocean Islands plc were transferred to a local incorporated company, Shell Mauritius Limited, in exchange for shares in the latter. This change in corporate structure underlines Shell’s confidence in the future of Mauritius. In addition, the newly incorporated

company was floated on the Mauritian Stock Exchange and the Mauritian public currently owns 22.85% of its shares.

During its 111-year presence in Mauritius, the company has built up a comprehensive business network in the energy scene, backed up by strong infrastructural investments, good technical knowhow and professionalism. VEML accounts for nearly half of the imported energy demand of the island and is present in all sectors of this business activity.

aBOuT vITOLVitol has 40% shareholding in Vivo Energy.

Vitol is an energy and commodities company and sits at the heart of the world’s energy flows. Every day the company uses its expertise and logistical networks to distribute energy around the world, efficiently and responsibly. For over 50 years Vitol has served the world’s energy markets; trading over seven million barrels of crude oil and products a day and delivering energy products to countries worldwide. Their customers include national oil companies, multinationals, leading industrial and chemical companies and the world’s largest airlines. They deliver the products the customers need on time and to specification, by sourcing and managing the movement of energy through the relevant infrastructures.

Further details on Vitol are available on www.vitol.com

aBOuT HeLIOs InvesTmenT PaRTneRsHelios Investment Partners has 40% shareholding in vivo Energy.

Helios Investment Partners is one of the largest Africa-focused investment firms, with a record that spans creating start-ups to providing established companies with growth capital and expertise.Led and predominantly staffed by African professionals with the language skills and cultural affinity to engage with local entrepreneurs, managers and intermediaries on the continent, Helios leverages its local and global networks, identifying businesses opportunities and structuring

proprietary transactions around them. The firm’s unique combination of a deep knowledge of the Africa operating environment, a singular commitment to the region and a proven capability to manage complexity, is reflected in the firm’s diverse portfolio of growing market leading businesses and its position as the partner of choice for multinational corporations.

Further details on Helios Investment Partners can be found at www.heliosinvestment.com

aBOuT ROyaL DuTCH sHeLLShell has 20% shareholding in Vivo Energy. Shell is a global group of energy and petrochemical companies with an average of 92,000 employees in more than 70 countries. The group uses advanced technologies and takes an innovative approach to help build a sustainable energy future. Royal Dutch Shell was formed in 1907, although the history of Shell dates back to the early 19th century. The parent company of the Shell group is Royal Dutch Shell plc, which is incorporated in England and Wales. The strategy of Shell is to seek to reinforce its position as a leader in the oil and gas industry, while helping to meet global energy demand in a responsible way. Safety and environmental and social responsibility are at the heart of the activities of the company For further information, visit: www.shell.com

OUR SHAREHOLDERS


FINANCIAL STATEMENTS

FsFinancial statements


The directors present their annual report and the audited financial statements of Vivo Energy Mauritius Limited (the “Company”) for the year ended 31 December 2016.

PRInCIPaL aCTIvITIesThe Company’s principal activity is the marketing and distribution of petroleum products. Its joint venture, Energy Storage Company Limited, is involved in the provision of LPG terminal usage facilities. The other joint venture, Mer Rouge Oil Storage Terminal Co. Ltd, is not yet operational.

ResuLTs anD DIvIDenDsThe Company’s profit for the year is Rs 320,872,000 (2015 Rs 282,627,000).

The financial statements of the Company for the year ended 31 December 2016 are set out on pages 63 to 107. The auditor’s report on these financial statements is on pages 59 to 62.

Company law requires the directors to prepare financial statements for each financial year which present fairly the financial position, financial performance and cash flows of the Company. In preparing those financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• state whether International Financial Reporting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors confirm that they have complied with the above requirements in preparing the financial statements.

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Mauritian Companies Act 2001. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

DIReCTORs The directors of the Company since 01 January 2016 and at the date of this report are:

Mr Pawan K JuwaheerMr Patrick CrightonMr Roger K F Leung Shin CheungMr Christian ChammasMr Tim TaylorMr Johan Depraetere

COnTRaCTs OF sIGnIFICanCeThe Company entered into the following contracts with related parties:

(a) with effect from 01 December 2011, a licence agreement for the branding of retail automotive fuel sites and other assets with Shell Brands International AG; and(b) with effect from 01 January 2014, a contract for the provision of services with Vivo Energy Africa Services Ltd.

maJOR sHaReHOLDeRAt 31 December 2016, Vivo Energy Mauritius Holdings BV holds directly 77.15% of the ordinary share capital of the Company. No other person holds 5% or more of the ordinary share capital of the Company.

seGmenTaL anaLysIsA business segment analysis of sales and results is given in Note 5 to the financial statements.

seRvICe COnTRaCTsMessrs Patrick Crighton and Pawan K Juwaheer have service contracts without an expiry date.

Service contracts of other directors are terminable with a 3 months’ notice period by either party.

DIReCTORs’ InTeResTsThe directors have no interests in the ordinary share capital of the Company, either directly or indirectly.

THRee yeaR summaRyA three year financial summary is set out in Note 29 to the financial statements.

DOnaTIOnsDuring the year, the Company made donations ofRs 12,185 (2015 – Rs 59,669).

The Company declared and paid the following dividends in 2015 and 2016:

For the year ended 31 December 2016, the Company made a profit of Rs 10.94 (2015 - Rs 9.64) per share and declared and paid an interim dividend of Rs 3.00 (2015 - Rs 2.90) per share during the year.

DIRECTORS’ REPORT STATEMENT OF DIRECTORS’responsibilities in respect of the financial statements

Dividend per share 2016 2015 Rs RsDeclared on: 15 May 2015 (2015 interim dividend) - 0.9014 August 2015 (2015 interim dividend) - 1.0013 November 2015 (2015 interim dividend) - 1.0024 March 2016 (2015 final dividend) 1.90 13 May 2016 (2016 interim dividend) 1.00 12 August 2016 (2016 interim dividend) 1.00 14 November 2016 (2016 interim dividend) 1.00 4.90 2.90


The audit related services consist of (i) quarterly review of published financial statements, (ii) reporting to the group auditors and (iii) issuing volume certificates. PricewaterhouseCoopers has indicated its willingness to continue in office and will be automatically reappointed at the Annual Meeting.

Approved by the Board of Directors on 24 March 2017and signed on its behalf by: ) DIRECTORS )

auDITORThe fees charged by the auditor, PricewaterhouseCoopers, for audit and other services were:

2016 2015 Rs’000 Rs’000Statutory audit 1,800 1,800Audit related services:- Quarterly reviews 600 581 Reporting to Group Auditors 231 241 Issuing volume certificates 58 60

We certify that we have filed with the Registrar of Companies all such returns as are required of the Company under the Companies Act 2001.

Executive Services LimitedAs per Christian Angseesing ACIS CORPORATE SECRETARY 24 March 2017

SECRETARY’S REPORTto the members of Vivo Energy Mauritius LimitedUnder Section 166(d) of the Companies Act 2001



The disclosures contained in this report are intended to provide the reader with a description of VEML’s corporate governance policies and practices. The directors firmly believe in and support high standards of corporate governance, which are critical to our business integrity.

The Board confirms compliance to the Mauritius Code of Corporate Governance.

CORPORATEGOVERNANCE REPORT

Mauritius code of Corporate Governance Compliance


CgCorporate governance


The Board of directors of VEML remains stringent when it comes to upholding the highest standards of integrity and transparency in their governance of the Company. The importance and the value of a balanced interplay between directors, management and shareholders within the Company has long been a major principle governing the conduct of VEML.

A Board of directors consisting of six directors manages VEML. Directors are appointed at the annual meeting of shareholders. They hold office until they retire or submit their resignation, unless removed earlier from office by the annual meeting of shareholders. The board delegates the day-to-day running of the Company to the Managing Director. The board delegates operational issues to the management team and is directly accountable to the shareholders for the performance of the Company.

During the year ended 31 December 2016, four board meetings were held.

The offices of Chairman and Managing Director were separated on 17 November 2003 in order to align board governance with the Mauritius Code of Corporate Governance. A Non-executive Director occupies the Office of Chairman and an Executive Director occupies the office of Chief Executive. The Chairman and Managing Director ensure that the members of the board receive accurate, timely and clear information.

BOARD OFDIRECTORS

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mR CHRIsTIan CHammas(Aged 62)Chairman and Non-Executive Director

Christian Chammas, joined Vivo Energy, a Shell licensee in 16 African countries, as Chief Executive Officer on 01 January 2012. Mr. Chammas has extensive experience in the energy sector. Prior to joining Vivo Energy, he was at Total for 31 years where he held several positions in Central America, the Caribbean and India. However, it is in Africa where most of his career has developed.

As an engineer, he worked on his first project in Nigeria. He later served as Chief Executive Officer for Total Group of Companies in Cameroon and Kenya. In his last role, Mr Chammas was the Executive Vice President for the Middle East and North Africa division of Total’s refining and marketing division. Mr Chammas is based in London but spends the majority of his time with employees, customers and other key stakeholders in the Vivo Energy businesses across Africa.

mR PaWan K JuWaHeeR(Aged 53)Managing Director

Pawan Juwaheer was appointed Managing Director of VEML in January 2012. Mr. Juwaheer studied Mechanical Engineering at the University of Manchester Institute of Science and Technology, UK. He joined Shell Mauritius in 1986 and has over the years occupied different positions across the business in Mauritius, Tunisia and Kenya, before being appointed Country Chairman of the company in 2006. Mr. Juwaheer is a former Chairman of the Mauritius Chamber of Commerce and Industry. He is also a member of the National Corporate Governance Committee.

Directorship in other companies• Vivo Energy Indian Ocean Holdings• Energy Storage Company Limited• Mer Rouge Oil Storage Terminal Company Limited• Barclays Bank Mauritius Limited

mR JOHan DePRaeTeRe(Aged 49)Non-Executive Director

Johan Depraetere has been the Chief Financial Officer at Vivo Energy since joining in April 2012. His responsibilities include Internal Audit, Financial Control, Treasury & Credit, IT and Procurement. Prior to joining Vivo Energy, Johan worked for the Samsung Group in Korea for 9 years. During that time his roles included Global Strategist (2003 – 2004), Director Samsung Electronics Korea (2004 – 2008) before becoming a member of the Chairman’s Office in July 2008 where he worked as VP Corporate Strategy (2008 – 2011) and VP Corporate M&A until April 2012. Responsibility included covering various industries, monitoring & supporting the overseas operations of Samsung Electronics with performance issues, strategy, marketing, organisational design and talent management.

In May 1999, Johan co-founded a company in New York called Soloella and was the acting CEO and CFO for two years, raising $6.3 million in financing. Johan started his career at McKinsey and Company in January 1991 as a Business Analyst for 4 years before going on to be an Associate until March 1998. During that time he worked on assignments in various sectors across Europe, USA and the Middle East analysing issues of strategy, commerce and operations. He assisted private US investors acquire the largest bank and conglomerate in Israel as well as improve the key account management structure of a leading producer. Belgium born, Johan lives in London and graduated with a Masters in Business Administration from Harvard Business School in June of 1996.

PROFILE OFDIRECTORS


TIm TayLOR(Aged 70)Independent and Non-Executive Director

Tim Taylor holds a BA (Hons) in Industrial Economics from Nottingham University in the United Kingdom. He worked in United Kingdom until 1972 when he returned to Mauritius and joined Rogers, a leading Mauritian Commercial and Services Group. He became Chief Executive of Rogers in 1999 and retired in December 2006. He became Chairman (non-executive) of Rogers in 2007, retiring in October 2012. He is Chairman (non-executive) of Cim Financial Services Ltd and Scott & Co Ltd. Mr Taylor is the Honorary Consul of Norway in Mauritius and a past Chairman of the Mauritius Chamber of Commerce and Industry. He is a former Chairman of the National Committee on Corporate Governance. He has been a member of the Council of the Mauritian Wildlife Foundation since 2006 and President since 2009.

MR ROGER LEUNG(Aged 70)Independent and Non-Executive Director

Member of the Association of the Chartered Institute of bankers in UK and a fellow member of the Mauritius Institute of Directors, Roger Leung has been appointed a Director in June 2006. He retired from Barclays Bank in September 2005 as Regional Corporate Director. He has been trustee of the Barclays Employees Pension Fund and a Director of the Barclays Leasing Company (Mauritius) Limited. He also works as a Consultant in business restructuring and in performance optimisation.

He is a director the Mauritius Development Investment Trust.

mR PaTRICK CRIGHTOn(Aged 57)Executive Director and Finance Manager

Fellow of the Association of Chartered Certified Accountants, Patrick Crighton joined Shell Mauritius in January 1987. He has since occupied the positions of Management Accountant, Legal and Tax Accountant, Treasury and Corporate Accountant and Credit Manager before being appointed Finance Manager in 2001. Mr. Crighton is holder of a Masters in Business Administration from Napier University. He has been board member since January 2005.

DIReCTORs’ emOLumenTs

During the year ended 31 December 2016, executive directors received an aggregate amount of MUR 21,658,396 (2015 - MUR 21,001,454.59) as remuneration and benefits from the Company. Out of this sum, MUR 7,386,509 is variable and the quantum depends on the performance of the company compared to a set scorecard. The non-executive directors received an aggregate amount of MUR 528,000 (2015 - MUR 504,000) as remuneration and benefits from the Company during the same period. The non-executive directors are not entitled to variable pay.

Messrs Juwaheer, Crighton, Leung and Taylor are ordinarily resident in Mauritius.

From left to right : Afsar Soobadar, Distribution Manager; Krishnen Vencadachellum, Retail Manager; Nancy Young, Human Resources Manager; Patrick Crighton, Finance Manager; Pawan Juwaheer, Managing Director; Ashvin Ramdenee, Marine and Aviation Manager; Ravi Ramjus Business-to-Business Manager; Shalini Bunwaree-Nagdan, Marketing Manager.

PROFILE OFMANAGEMENT TEAM



nanCy yOunGHuman Resources ManagerNancy Young is the holder of a Master’s degree in Psychology with specialisation in Industrial Psychology from the University of Bordeaux in France. She joined Shell Mauritius in 1990 as Assistant Personnel and Services Manager having worked on a major project with a consultancy firm, Core Services Limited. She currently holds the position of Human Resources Manager.

KRIsHnen venCaDaCHeLLumRetail ManagerHolder of a degree in Mechanical Engineering from the NIT Allahabad, India and a Masters degree in Business Administration from the University of Mauritius, Krishnen Vencadachellum joined Shell Mauritius in 2004 as Retail Engineer and Property Manager. In 2009, he was appointed Operations Excellence Coordinator, Network Planner for East and South East Africa in 2011, before becoming Executive Assistant to the VP Indian Ocean Islands. Mr. Vencadachellum was appointed Retail Manager in 2012.

aFsaR sOOBaDaRDistribution ManagerAfsar Soobadar, Distribution Manager, joined Shell Mauritius in 2004. He has since occupied the posts of Transport and Logistics Manager then Terminal Operations Manager. Mr. Soobadar holds a Masters degree in Engineering Manufacture & Management from the University of Manchester, UK, and a Masters in Business Administration from Manchester Business School, UK. Mr Soobadar is a Board Director of ESCOL board (Energy Storage Company Limited), an associate Company of VEML.

sHaLInI BunWaRee-naGDanMarketing ManagerShalini Bunwaree Nagdan is holder of a degree in Industrial Economics from the University of Nottingham, UK and an MBA degree from the University of Mauritius. Mrs. Nagdan joined Shell Mauritius in 2001 as Sector Sales Manager. In 2005, she was appointed Fuels and Bitumen HSSE Manager for the Indian Ocean cluster after which, she became the B2B/B2C Marketing Manager for Mauritius in 2007. Prior to her appointment as Marketing Manager in 2014, Mrs. Nagdan has occupied the position of Fuels Sales Manager since 2009.

asHvIn RamDeneeMarine and Aviation ManagerAshvin Ramdenee is holder of a Master of Engineering degree in Mechatronics from the University of Leeds, UK. He joined Shell Mauritius in 2000 as Plant and Speciality Engineer. Thereafter, he has worked in diverse sectors within the Group in Engineering, Customer Service, Terminal Operations, Planning, Supply Chain and Strategy at Local, African and Global levels. Mr. Ramdenee was appointed Marine and Aviation Manager in March 2015.

RAVI RAMjUSBusiness-to-Business ManagerRavi Ramjus, Business-to-Business Manager, holds a B.Tech in Mechanical Engineering from the University of Mauritius and a Master’s in Business Administration from the Surrey European Management School in the UK. Mr. Ramjus has occupied several positions at local, regional and international levels within the company in Engineering, Retail & Business Development. In these roles, he had the opportunity to drive several projects such as retail network strategic review, payment systems and loyalty programs. Mr. Ramjus has also championed the setting up of various strategic alliances between Vivo Energy and renowned operators in the payment, banking and mobile financial industry.

The board meets on a regular basis and has a formal schedule of matters reserved for it. This includes matters such as approval of the Annual Report, approval of interim dividends and recommendation of final dividends, approval of material contracts and nomination of candidates for board membership. The shareholders elect the board members each year at the annual meeting. Each director is elected by

a separate resolution for a term of one year. The full list of matters reserved to the board for decision is available from the Company Secretary.

aTTenDanCe OF BOaRD meeTInGs IN 2016In 2016, the attendance of the directors was as follows:

The Board has three standing committees made up of Executive and Non-executive Directors to assist in the discharge of its duties. The committees, which are set out below, meet regularly under the terms of reference set by the board.

As from 27 March 2007 the Nomination and Remuneration committee forms part of the Corporate Governance committee.

24 Mar 13 May 12 Aug 14 Nov 2016 2016 2016 2016Chairman Mr Christian Chammas X XMr Bernard Le Goff (Resigned 29/04/2016) Mr Johan Depraetere (Appointed 16/05/2016) X

Managing Director Mr Pawan Kumar Juwaheer X X X X

Directors Mr Patrick Crighton X X X XMr Timothy Taylor X X X X (Chairperson) (Chairperson)Mr Roger Leung X X X X

BOARD MEETINGS

BOARD COMMITTEES

The VEML management team is responsible for supervising the general course of business of the company and advises the Board of directors.


TERMS OF REFERENCE


TeRms OF ReFeRenCe

TeRms OF ReFeRenCe OF auDIT anD RIsK COmmITTee (aRC)

COnsTITuTIOnThe ARC, established by the Board of the Company, shall consist of at least two but not exceeding three Non-executive Directors (NED). The Chairperson of the committee shall be an independent NED (as defined by the Code of Corporate Governance of Mauritius).Each member shall be financially literate. At least one member must have accounting or related financial expertise. Members shall be appointed for two (2) years term of notice so long as they remain a director of the Company.

Audit and risk committee members shall not serve simultaneously on the audit committee of companies in the same field as the present Company and of more than two other public companies without the approval of the full board.

OBJeCTIvesThe audit and risk committee shall assist the board in monitoring and overseeing its financial responsibilities. Its main objectives shall be to:• Oversee the integrity of the financial reporting process and

ensure the transparency and performance of published financial information.

• Review the effectiveness and performance of the Company’s internal financial control and risk management system.

• Evaluate the work of the internal audit function and of the external auditors.

• Review the Company’s process compliance with legal and regulatory requirements affecting financial reporting and, if applicable, its code of business conduct.

The ARC will maintain effective working relationships with the board of directors, management, and the external and internal auditors. The duties and responsibilities of a member of the audit and risk committee are in addition to those set out for a member of the board of directors.

meeTInGsOnly committee members will attend meetings. A quorum of any meeting shall be two (2) members.The audit and risk committee may invite such other persons (e.g. other directors, the General Manager, head of finance, head of internal audit and external audit senior partner) to its meetings, as it deems necessary.

The external and internal auditors shall be invited to make presentations to the audit and risk committee as appropriate. At least once a year, the committee shall meet with the head of internal audit and senior partner of the external auditors without the presence of executive management to discuss any matters that either the committee or these two parties believe should be discussed privately. The committee shall meet as often as it determines necessary or appropriate but not less frequently than quarterly. The committee chairman shall convene a meeting upon request of any committee member who considers it necessary. The secretary of the audit and risk committee shall be the Company secretary, or such other person as nominated by the board. The secretary of the committee shall circulate the minutes, agenda, and background materials of meetings to the members of the committee and to the chairman of the board at least a week before the meeting.

The background material must include all such management accounts, financial statements, internal and external audit reports and internal control evaluations that are available.

The chairman of the committee or another member of the committee shall attend the board meeting at which the financial statements are approved.

The committee should meet with in-house legal adviser on a regular basis (if one is appointed). Meetings with outside legal adviser should be held if it is deemed necessary.

BOaRD auTHORITy (eT aL)The board authorises the audit and risk committee, within the scope of its responsibilities to:• Investigate any activity it deems appropriate,• Appoint independent advisers and professionals

(accountants, lawyers and so on) as it deems necessary to carry out its duties,

• Instruct any officer or employee of the Company to attend any meetings and provide pertinent information as necessary and appropriate,

• Have unrestricted access to members of management, employees and relevant information,

• Establish procedures for dealing with concern of employees regarding accounting, internal controls and auditing matters,

• Make recommendations to the board in relation to the appointment, termination and remuneration of external auditors and evaluate the work of the latter,

• Review the performance of the external auditors and exercise final approval on the appointment or discharge of the auditors; and

• Pre-approve all audit services fees and terms as well as review policies for the provision on non-audit services by the external auditors.

The internal audit manager reports functionally to the chairman of the audit and risk committee (and administratively to the General Manager).

maIn ResPOnsIBILITIesThe basic responsibility of the members of the audit and risk committee is to exercise their business judgement to act in what they reasonably believe to be in the best interests of the Company and its shareholders. In discharging that obligation members should be entitled to rely on the honesty and integrity of the Company senior executives and its outside advisors and auditors, to the fullest extent permitted by law.

Key ResPOnsIBILITy In ResPeCT OF FInanCIaL RePORTInGThe committee shall:• Review the interim financial statements, annual financial

statements and preliminary announcements prior to their release,

• Meet with management internal auditors and the external auditors to review the financial statements, the critical accounting policies and practices, and the results of their audit,

• Ensure that significant adjustments, unadjusted differences, disagreements with management and management letter are discussed with the external auditors; and

• Review the other sections of the annual report before its release and consider whether the information is understandable, consistent with members’ knowledge of the Company and unbiased.

Key ResPOnsIBILITy In ResPeCT OF InTeRnaL COnTROLThe committee shall:• Discuss the internal controls, adhered to by the Company’s

management, financial, accounting and internal audit personnel,

• Discuss with management the Company’s major risk exposures and the steps management has taken to monitor and control such exposures,

• Evaluate the overall effectiveness of the internal control and risk management frameworks and consider whether recommendations made by the internal and external auditors have been implemented by management,

• Ensure that significant findings and recommendations noted by the internal auditors and management’s proposed response are discussed and appropriately acted on; and

• Evaluate the internal control matrix of the Company on a quarterly basis and obtain management comments on fluctuations in the score.

Key ResPOnsIBILITy In ResPeCT OF InTeRnaL auDITThe committee shall:• Ensure that the Company has an appropriate internal

audit function,• Review the effectiveness of the internal audit function

and ensure that it has appropriate standing within the Company; and

• Evaluate the internal audit department and its impact on the accounting practices internal controls and financial reporting of the Company.

Key ResPOnsIBILITy In ResPeCT OF exTeRnaL auDITThe committee shall:• Review on an annual basis the performance of the external

auditors based on the scope and results of their work and make recommendations to the board of the appointment, reappointment or termination of the appointment of the external auditors,

TeRms OF ReFeRenCe


TERMS OF REFERENCE TERMS OF REFERENCE

• Consider the independence and objectivity of the external auditor.

• Discuss and review the external auditors’ proposed audit scope, planning and approach in the light of the Company’s circumstances and changes in regulatory and other requirements; and

• Ensure that significant findings, accounting adjustments and recommendations noted by the external auditors and management’s proposed response are discussed and appropriately acted on.

ResPOnsIBILITy In ResPeCT OF COmPLIanCe WITH LaWs anD ReGuLaTIOnsThe committee shall:• Review the effectiveness of the system for monitoring

compliance with laws and regulations and the results of management’s investigation and follow-up (including disciplinary action) of any fraudulent acts or non-compliance,

• Oversee the Company’s compliance with legal and regulatory provisions, its articles of association, code of conduct, by-laws and any rules established by the board; and

• Conduct and authorise investigations into any matters within the audit and risk committee’s scope of responsibilities.

evaLuaTInG PeRFORmanCe anD RePORTInG ResPOnsIBILITIesThe committee shall:• Assess the achievement of the duties specified in the

charter annually and make regular report of their findings to the board,

• Review and reassess the adequacy of its charter every two (2) years and discuss any required changes with the board; and

• Recommend approval of the annual report and accounts to the board.

TeRms OF ReFeRenCe - CORPORaTe GOveRnanCe COmmITTee

memBeRsHIPThe membership, including the chairmanship, of the Committee shall be appointed by the Board. The Corporate Governance Committee shall consist of not less than three members including the Managing Director of the Company.

It should be composed of a majority of independent nonexecutive directors. A quorum shall be two members.

aTTenDanCe aT meeTInGsThe Chairman of the Board, the Group Chief Executive, the Group Human Resources Director and other members of management shall attend the meetings, if invited by the Committee. Executive Services Ltd shall be secretary of the Committee.

meeTInGsMeetings of the Committee will be held as the Committee deems appropriate. However the Committee should meet at least once a year. The Chairperson of the Committee or any member of the Committee may call a meeting at any other time. The quorum for decisions of the Committee shall be any two members present throughout the meeting who shall vote on the matter for decision.

auTHORITyThe Committee is authorised by the Board to:• Investigate, or cause to be investigated, any activity within

its terms of reference;• Obtain external legal or independent professional advice

and such advisors may be invited to attend meetings as necessary.

DuTIesThe responsibilities of the Committee shall be to:• Determine, agree and develop the Company’s general

policy on corporate governance in accordance with the applicable Code of Corporate Governance.

• Prepare the corporate governance report to be published in the Company’s Annual Report.

• Ensure that disclosures are made in the Annual Report in compliance with the disclosure in the Code of Corporate Governance

• determine, agree and develop the company’s general policy on executive and senior management remuneration

• determine specific remuneration packages for executive directors of the company, including but not limited to basic salary, benefits in kind, any annual bonuses, performance-based incentives, share incentives, pensions and other benefits.

• determining any criteria necessary to measure the performance of executive directors in discharging their functions and responsibilities

• determine the level of non-executive directors’ and independent non-executive directors’ fees to be

recommended to the shareholders at the Meeting of Shareholders

• ascertain whether potential new directors are fit and proper and are not disqualified from being directors. Prior to their appointment, their backgrounds should be investigated thoroughly;

• ensure that the potential new director is fully cognisant of what is expected from a director, in general, and from him or her in particular

• ensure that the right balance of skills, expertise and independence is maintained;

• ensure that there is a clearly defined and transparent procedure for shareholders to recommend potential candidates;

• ensure that potential candidates are free from material conflicts of interest and are not likely to simply act in the interest of a major shareholder, substantial creditor or significant supplier of the company. This is of particular importance when a candidate has been nominated by virtue of a shareholder’s agreement, or other such agreement.

• ensure that those directors who, in the opinion of the board, have either acted in accordance with the instructions of a third party or have not discharged their duties as directors to the satisfaction of the board, not be nominated for re-election.

CORPORaTe GOveRnanCe COmmITTee(Remuneration and Nomination committee)

Mr Timothy Taylor (Chairman)Mr Pawan K JuwaheerMr Roger Leung

auDIT anD RIsK manaGemenT COmmITTee Mr Roger Leung (Chairman)Mr Timothy Taylor

05 Feb 21 Mar 2016 2016

Chairman Mr Timothy Taylor X XDirectors Mr Pawan Kumar Juwaheer X XMr Roger Leung X X

21 Mar 09 May 08 Aug 07 Nov 2016 2016 2016 2016

Chairman Mr Roger Leung X X X XDirector Mr Timothy Taylor X X X X



DIReCTORs In JOInT venTuRe Energy Storage Company Limited

VEML holds 50% of the shares of Energy Storage Company Limited (ESCOL). The Board directors of ESCOL and their attendance to the ESCOL board meeting in 2016 are as follows:

vIvO eneRGy HR PeRFORmanCe, ReWaRDs anD BeneFITs PHILOsOPHyPeople in Vivo Energy are critical to the achievement of our business objectives. Vivo Energy compensation policies, practices, and systems are intended to recognise and support:• Individual and business performance; both short and long

term;• Vivo Energy core values, business principles and people

principles;• Business and people strategies;• Our strong commitment to sustainable development;• Market competitiveness and the importance of internal

relationships; and• Different business and country economic, social, legal, and

regulatory environments.

Performance and reward policies should help people excel, foster affiliation with Vivo Energy, and encourage behaviour that leads to the achievement of business and personal objectives.

Benefits that are provided or enabled by Vivo Energy companies are another important component of the employee value proposition and support our attraction and retention strategies. Benefits that are common foster affiliation and community spirit and offer a foundation for the total compensation package.

Our pay and benefits philosophy, objectives and standards apply to Vivo Energy companies that employ people on Vivo Energy terms and conditions and should be broadly communicated and understood by all.

ObjectivesVivo Energy companies will operate performance, reward and benefit systems that:• Align employee and shareholder interests;• Support the attraction and retention of the best talent at

all levels who fit our business needs;• Assist mobility and avoid creating barriers to movement

within a business, country or Vivo Energy;• Recognise both common interests and individual

preferences; and• Are transparent and well explained.

In addition to these shared objectives, the different elements of the total compensation package focus on different, although complementary, goals.

Performance and rewards• Differentiate on the basis of performance and value to the

business; and• Encourage growth and development as individuals and

team players.

Benefits• Provide a standardised platform that allows other

elements of the reward strategy to differentiate on the basis of performance;

• Are cost effective and tax advantaged, where Vivo Energy purchasing power provides leverage over individual purchasing power to provide for cost reduction and risk sharing;

• Support long-term social objectives for the communities within which we work;

• Recognise the legislative environments and competitive markets within these environments; and

• Support sharing of responsibility between the state, the employer and the employee.

StandardsAll reward and benefit programmes must comply fully with appropriate laws and regulations and our Business Principles:• Our competitive reference: To compare to representative

employers in the markets in which we compete for talent.• Our competitive objective: To have salary and benefits that

result in a fair and competitive market position among the competitive reference group. The pay element within the total mix is more important than benefits in our competitive positioning - aimed at delivering a competitive position on Total Cash and Total Compensation (including benefits).

POLICIes anD PRaCTICe On eTHICsOur approach to business integrityOur commitment to business integrity is clear and unequivocal; VEML insists on honesty, integrity and fairness in all aspects of our business and expects the same in our relationships with all those with whom we do business. We do not bribe, nor do we accept bribes. We do not effect illegal payments of any kind and investigate all

meR ROuGe OIL sTORaGe TeRmInaL COmPany LImITeDVEML holds 23.5% of the shares of Mer Rouge Oil Storage Terminal Company Limited (MOST), a joint venture set up with the oil companies and the State Trading Corporation to build and operate an additional 25,000 metric tons motor gasoline depot in Mer Rouge. Attendance to the Board meetings in 2016 is as follows:

28 Apr 29 Nov 2016 2016

Chairman Mr Bashirally A Currimjee - - Directors Mr David Muraguri Murriithi - XMr Pawan Kumar Juwaheer X XMr Mohammed Afsar Soobadar X XMr Mathieu Soulas (alternate to Mr Bashirally A Currimjee) X X (Chairperson)Mr Jerome Dechamps (alternate to Mr Bashirally A Currimjee) (appointed 04/11/2016) - X (Chairperson)Mr Patrick Crighton (alternate to Mr David Muraguri Murriithi) X -Mr Peyami Oven X X

31 May 2016

Chairman Mr Rahul Bhardwaj (Appointed on 26/01/2016) X

Directors Ms Joan Njeri Njoroge XMr Pawan Kumar Juwaheer XMr Afsar Soobadar (alternate to Mr David Muraguri Murriithi) XMr Peyami Oven XMs Zalhatta Ali Ben Ali XMr Sagar Mudhole XMr Mohunlall Banydeen X



suspicious circumstances. Serious action is taken against any employee found to have breached our firm ‘no bribes’ policy. Corruption can occur in all parts of the world and at all levels. Our policy is that the direct or indirect offer, payment, soliciting or acceptance of bribes in any form is unacceptable. Facilitation payments are also bribes and should not be made.

Declaration of conflict of interestEmployees must avoid conflicts of interest between their private activities and their part in the conduct of Company business. They must also declare in writing to the Company potential conflicts of interest. All business transactions on behalf of a Vivo Energy Company must be reflected accurately and fairly in the accounts of the Company in accordance with established procedures and are subject to audit and disclosure. We report annually on any breaches of our ‘no bribes’ policy.

Our assurance letter process helps us to monitor whether we are living by our Principles, in accordance with both external laws and regulations and with our internal standards. Each year, the Managing Director reports back to the Chief Executive Officer of Vivo Energy, in writing, whether VEML has acted in line with these requirements and to report material exceptions. Action is taken to address areas of noncompliance.

Code of ConductThe Code of Conduct helps us to live by our business principles. As Shell Licensee, we fully abide by the Statement of General Business Principles which provides the foundation for how Vivo Energy companies do business around the world. Many of these principles contain legal and ethical compliance requirements. The code is a single source of information about what those compliance requirements mean, with guidance on when to use them, how to use them and how to be sure. We provide employees with good and safe working conditions, and competitive terms and conditions of employment.

Responsibility to customersWe remain at the forefront of innovation, in consistently offering top quality products to our customers at very competitive prices.

COmPany’s POLICIes anD PRaCTICes WITH ReGaRDs TO SOCIAL ISSUESVivo Energy companies aim to be good neighbours by continuously improving the ways in which we contribute directly or indirectly to the general well-being of the communities within which we work. We manage the social impacts of our business activities carefully and work with others to enhance the benefits to local communities, and to mitigate any negative impacts from our activities.In addition, Vivo Energy companies take a constructive interest in societal matters, directly or indirectly related to our business.

CORPORaTe sOCIaL ResPOnsIBILITyVEML is committed to being a responsible corporate citizen and caring for the communities in which it operates. To this end, the Company is fully engaged in Community Investment projects which promote road safety awareness among the country’s youth and the general public; provide educational training programmes for underprivileged learners; and encourage environmental awareness and sustainable development.

POLITICaL DOnaTIOnsVEML has no mandate to participate in party politics, although, as a major generator of economic wealth, the energy industry clearly has considerable social and political impact. However, when dealing with government, VEML has the right and responsibility to make its position known on any matter, which affects the Company, its employees, its customers, or its shareholders. VEML has also the right to make its position known on matters affecting the community, where the Company has a contribution to make. We do not make donations to political parties and treat this issue in the same way as bribery and corruption. We report annually on the implementation of this policy of no political payments. During the year, the Company made no political donations.

RIsK manaGemenT anD InTeRnaL COnTROLThe approach to internal control is based on the underlying principle of line management’s accountability for risk and control management.The risk and internal control policy explicitly states that the

Company has a risk-based approach to internal control and that management is responsible for implementing, operating and monitoring the system of internal control, which is designed to provide reasonable but not absolute assurance of achieving business objectives. The approach to internal control includes a number of general and specific risk management processes and policies. Within the essential framework provided by the Statement of General Business Principles, the primary control mechanisms are self-appraisal processes in combination with strict accountability for results. These mechanisms are underpinned by established policies, standards and guidance material that relate to particular types of risk; structured investment decision processes, timely and effective reporting systems and performance appraisal.

Examples of specific risk management mechanisms include:• regular review of significant risks by the management team;• a common health, safety, security and environment (HSSE)

policy, a common requirement for HSSE management systems, and external certification of the environmental component of such systems for major installations;

• a financial control handbook that establishes standards for the application of internal financial controls;

• arrangements for the management of property, liability and treasury risks; and

• a business control incident reporting process that enables monitoring and appropriate follow-up actions for incidents arising as a result of control breakdowns. Lessons learned from these incidents are used to improve the overall control framework.

A formalised self-appraisal and assurance letter process is in place. Annually, the management of every business unit provides assurance as to the adequacy of governance arrangements, risk and internal control management, HSSE management, financial controls and reporting, treasury management, brand management and information management. The Managing Director also provides assurance regarding compliance with the Statement of General Business Principles and other important topics; as part of this process business integrity concerns or instances of bribery or illegal payments are to be reported. Assurance letter results including any material qualifications are reviewed by Vivo Energy Audit and Risk Committee and support representations made to the external auditors.

In addition to these structured self-appraisals, the assurance framework relies upon objective appraisals by internal audit. The results of internal audit’s risk-based reviews of operations provide an independent view regarding the effectiveness of risk and control management systems. These established reviews; reporting and assurance processes enable Vivo Energy to regularly consider the overall effectiveness of the system of internal control and to perform a full annual review of the system’s effectiveness. Taken together, these processes and practices provide confirmation to Vivo Energy holding companies that relevant policies are adopted and procedures implemented with respect to risk and control management.

RIsK ReLaTeD TO CReDITCredit risk is one of the Company’s key risks. Vivo Energy has devised a set of rules that apply across the continent on that subject. Items on which this policy place a lot of emphasis include carrying out customer risk assessment before any delivery is made to a customer and also at regular intervals, setting of a credit limit by customer and using the Enterprise Resource Planning system to avoid trading outside of approved conditions.

RIsK ReLaTeD TO FOReIGn exCHanGeMore than one third of the Company’s business is carried out in foreign currency. The Company’s risk mitigation policy with respect to foreign currency is to minimise exposure by matching currencies whenever feasible and entering forward contracts whenever possible and economically viable.

RIsK ReLaTeD TO suPPLIesRegularity of supplies is of vital importance to enable VEML to meet the needs of its customers; consequently Vivo Energy has secured the position of Oil Industry coordinator with The State Trading Corporation for the monitoring of all product imports. Whereas product demand for inland trade is fairly predictable, with transfer prices fixed monthly and regulated by the Automatic Pricing Mechanism, international sales are not price controlled, very seasonal and unpredictable. In this respect, efficient management of the product replenishment cycle, product availability and freight are therefore of essence to ensure continuity of service. The risk to the business is product shortage or stock out causing curtailment of sales, loss of revenue and business.



RIsK ReLaTeD TO HeaLTH, saFeTy, seCuRITy anD envIROnmenT (Hsse)VEML operates under a common set of business principles, supported by policies and business controls.These include a Health, Safety, Security, Environment (HSSE) and Social Performance (SP) Commitment and Policy, which require that our Company shall have a systematic approach to HSSE & SP management. We have put in place the Vivo Energy mandatory procedure for an HSSE Management System (HSSE MS), which is a structured set of controls for managing the business and to ensure and demonstrate that business objectives are met. This management system takes into account HSSE MS implementation requirements, incorporated in the business level HSSE MS as well as the various classes of business HSSE MSs relevant to our operations. Classes of business are distribution, marine, aviation, and business-to-business, LPG, lubricants and retail.

The elements of this management system are organised according to Vivo Energy guidance of how to integrate HSSE into the business and manage HSSE matters as any other critical activity. In line with our HSSE & SP policy to achieve continuous performance improvement, the individual classes of business action plans have been well observed and completed.

RIsK ReLaTeD TO InFORmaTIOn seCuRITyVEML has in place an Information Security programme that ensures it adheres to the Information security based on ISO 27001. Disaster recovery plans are in place and tested to ensure that there is minimum business disruption in the event of a disaster. All new staff and contractors are continually coached to complete the mandatory e-learning information security training module, the objective of the training being to enhance awareness, education and behaviour against information security threats.

RIsK ReLaTeD TO RePuTaTIOnVEML and the Vivo Energy companies value the perception of stakeholders as no Company or business operates in a vacuum. Our licence to operate and our very existence rely on the understanding, goodwill and emotion of stakeholders. As such, VEML addresses the interests, concerns and

perceptions of key stakeholders through a variety of methods. Included are statements of our commitments, policies and standards and human resource roles of Communications and Managing Director. The role of the Managing Director, in particular, is specifically designed to protect the reputation of Vivo Energy companies operating in a country with the support from Communications both locally and at Vivo Energy level. Statements of commitments, policies and standards adopted by VEML include the Statement of General Business Principles, Code of Conduct, Commitment to Sustainable Development, HSSE & SP Commitment and Policy, Diversity and Inclusiveness Standard, Environmental Minimum Standards, Environmental, Social and Health Impact Assessment, Minimum Health Standards, Security Standards, HIV/AIDS Policy, Human Rights Standard, Road Transport Safety Policy, Code of Ethics and adoption of the Mauritian Code of Corporate Governance.

RIsK ReLaTeD TO FLuCTuaTInG OIL PRICESOil and oil products prices can vary as a result of various factors, including natural disasters, political instability or conflicts, economic conditions or action taken by major oil-exporting countries. Fluctuations in these prices could test our business assumptions, and could have an adverse impact on VEML investment decisions, operational performance and financial position.

RIsK ReLaTeD TO OPeRaTIOnaL HaZaRDs, naTuRaL DIsasTeRs anD PanDemICsThe activities of VEML place it at the risk of operational hazards, natural disasters and pandemics, which could result in loss of life, adverse impact on the environment and cause disruption to business activities. Realisation of these risks could have an adverse effect on the results of operations and financial position of the Company.

RIsK ReLaTeD TO CHanGe In LeGIsLaTIOn anD FIsCaL anD ReGuLaTORy POLICIesThe operations of VEML are subject to risk of change in legislation, taxation and regulation, changes that could have an adverse effect on the results of operations and financial position of the Company.

RIsK ReLaTeD TO eFFeCTIve GOVERNANCESuccessful delivery of the VEML strategy requires effective governance. There is a risk of incorrect design and operation of internal control, which may result in damage to the Company’s reputation, financial results and employees.

RIsK ReLaTeD TO PaRTneRs anD venTuResThere is a risk that VEML could lose the ability to influence and control the operations, behaviours and performance of business activities of other parties with whom the Company is engaged. This could result in damage to staff, assets and financial results.

RIsK ReLaTeD TO eCOnOmIC anD FInanCIaL maRKeT COnDITIOnsVEML is subject to differing economic and financial market conditions. There are risks from political and economic instability. Realisation of one of these risks could have an adverse impact on the results of operations and financial position of VEML..

InTeRnaL COnTROLsThe Group has an internal audit plan in place. The plan is set up such that internal controls are reviewed at regular intervals in all operating units.manaGemenT aGReemenTsThe Company does not have any shareholders’ agreement that affects the governance of the Company by the Board. As mentioned in page 29 of the directors’ report, the Company has a licence agreement with Shell Brands International AG and a contract for the provision of services with Vivo Energy Africa Services. Apart from these two contracts, the Company does not have any management agreement with third parties where the third party is a director or a Company owned by a director.


sHaReHOLDeR COmmunICaTIOnsThe Board recognises the importance of two-way communications with its shareholders and, in addition to giving a balanced report of results and progress at each annual meeting, VEML responds to questions and issues raised by institutions and private shareholders.Information about VEML is available on the websitewww.vivoenergy.com.

In addition, shareholders’ questions can be asked via:Te: +230 206 1234Fax: +230 240 1043 Vivo Energy Mauritius VivoEnergyMtius

annuaL meeTInG OF sHaReHOLDeRsThe Annual Meeting of Shareholders of VEML is held once a year to discuss the report of the Board of directors, to approve the audited financial statements, to elect any new directors, to appoint the auditors and to authorise the directors to fix their remuneration, to ratify the dividends declared by the Board of directors. The Annual Meeting of Shareholders shall be called by the Board of directors. The items to be dealt with at the meeting are determined by the Board of directors and are specified in the agenda included in the notice of convocation. A Special Meeting of Shareholders may be called by the Board on written request of

shareholders holding shares carrying together not less than 5% of the voting rights entitled to vote on an issue. The resolutions of the Annual Meeting of Shareholders shall, except in those cases where the law or the Constitution prescribe a larger majority, be passed by absolute majority of the votes cast.

At annual meetings, shareholders may cast one vote for each ordinary share held by them.

SHAREHOLDER INFORMATION



Number of Shares Number of Shareholders Number of Shares Owned % of Total Issued Shares

1 - 500 2,248 436,414 1.49%501 - 1,000 531 473,822 1.62%1,001 - 5,000 500 1,225,522 4.18%5,001 - 10,000 103 751,252 2.56%10,001 - 50,000 74 1,490,350 5.08%50,001 - 100,000 6 428,692 1.46%100,001 - 250,000 5 820,732 2.80%250,001 - 500,000 1 273,937 0.93%500,001 - 1,000,000 1 798,215 2.73%Over 1,000,000 1 22,623,316 77.15%Total 3,470 29,322,252 100.00%

Vivo Energy Mauritius Holdings B.V. (Netherlands) 22,623,316National Pensions Fund 798,215Mr Limberg Lam Po Tang 273,937Mr Lim Kwat Chow Lam Po Tang 228,652State Insurance Company Of Mauritius Ltd 202,559Sections Rolling Limited 137,100Mr N J P Maurice Raffray 135,000Swan Life Ltd (051 Fund) 117,421National Savings Fund 84,700Mr Gary Lam Po Tang 82,415The Mcb Ltd (A/C Rogers Money Purchase Retirement Fund) 76,940

DaTa anaLysIs On sHaReHOLDInG

LIsT OF 10 maJOR seCuRITy HOLDeRs as aT 31 DeCemBeR 2016

Apart from Vivo Energy Mauritius Holdings B.V, no other shareholder owns more than 5% of the share capital of the Company.

sHaRes HeLD By eaCH DIReCTOR aT 31 DeCemBeR 2016

The directors follow the principles of the model code on securities transactions by directors as detailed in Appendix 6 of the Mauritius Stock Exchange rules.The directors have not held or traded in any shares of the Company during the year.

Shareholder information

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Vivo Energy Mauritius Limited share pricecompared to SEM-10 - 4 January to 31 December 2016

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Vivo Energy Mauritius Limited share pricecompared to SEMDEX: 4 January to 31 December 2016

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sHaReHOLDeRs’ DIaRy

Financial Year End 31 December 2016Annual Meeting of Shareholders 12 May 2017Reports and profits statement Income Statement for the year ended 31 December 2016 Published 31 March 2017Condensed Interim Income Statement for the quarterended 31 March 2017 Published 15 May 2017Condensed Interim Income Statement for the six monthsended 30 June 2017 Published 15 August 2017Condensed Interim Income Statement for the nine monthsended 30 September 2017 Published 15 November 2017Income Statement for the year ended 31 December 2017 Published 31 March 2018 (at latest)

Dividend Interim Dividend To be announced 15 May 2017Interim Dividend Payable 30 June 2017 (at latest)Final Dividend To be announced 31 March 2018 (at latest)Final Dividend Payable 31 July 2018 (at latest)

COnsTITuTIOnThe Company’s constitution is in conformity with the provisions of the Companies Act 2001 and those of the Listing Rules of the Stock Exchange of Mauritius.

Its salient features are:• There are restrictions on pre-emptive rights attached to

the shares.• The Company may acquire and own its shares.• The Company may not issue fractions shares.• Shareholders may cast their votes by post.• The Board consists of not less than two (2) or more than

eleven directors (11).• There is rotation of directors every year except for the

one who is elected as chairperson who retires every four years.

DIvIDenD POLICyThe Company will pay dividends on a quarterly basis. The timing of Board meetings should be planned so as to meet this objective. Dividend payments should take into account the dividend calendar of trading rules of the Stock Exchange. Ideally, dividends should be declared at the Board meetings which are held in May and November each year. The Dividend Policy of VEML is to declare up to a maximum of 50% of Net Income after Tax (NIAT) subject to sufficient

funds and solvency certificate. The solvency certificate should be signed and approved by the Board of directors in accordance with the Companies Act.

InsIDeR DeaLInGVivo Energy believes it important in order to protect the reputation for honesty and integrity enjoyed by both Vivo Energy and its employees that, where part of the share capital of a Vivo Energy Company is traded on a Stock Exchange, there should be no possibility of suspicion that an employee or contractor of the Company or a person connected with that employee or contractor while dealing in the Company’s quoted shares has used confidential knowledge for either his own benefit or that of another person. Between the dates a period is closed and the results are published, a notice is sent to all staff asking them not to deal with shares during such periods.

ReLaTeD PaRTy TRansaCTIOnsRelated party transactions are disclosed in note 28 of the financial statements.

nOn-auDIT seRvICesDuring the year, the external auditors have rendered no nonaudit services.

GOING CONCERNThe directors have a reasonable expectation that the Company has adequate resources to continue in an operational existence for the foreseeable future, as set out in the Chairman and Managing Director’s reports, and for this reason has adopted the going concern basis in preparing the annual financial statements.

ReGIsTeReD OFFICeVivo Energy Mauritius LimitedCemetery RoadRoche BoisPO Box 85, Port Louiswww.vivoenergy.com

By order of the BoardExecutive Services LimitedPer Ah Man Wong Too Yan ACISSecretary

Shareholder information


(Section 75(3) of the Financial Reporting Act) Name: Vivo Energy Mauritius Limited (“the Company”) Reporting Period: Year ended 31 December 2016 On behalf of the Board of Directors of the Company, we confirm that to the best of our knowledge, the Company has not complied with section 2.8. Reason for non-compliance is as follows:Disclosing salaries by bands protects the personal privacy of individuals and this is also in line with current market practice. SIGNED BY:

Chairman Director

RePORT On THe auDIT OF THe FInanCIaL sTaTemenTs

OUR OPINIONIn our opinion, the financial statements give a true and fair view of the financial position of Vivo Energy Mauritius Limited (the “Company”) as at 31 December 2016, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards and in compliance with the Mauritian Companies Act 2001.

What we have auditedThe financial statements of Vivo Energy Mauritius Limited set out on pages 63 to 107 comprise:• the statement of financial position as at 31 December 2016;• the income statement for the year then ended;• the statement of comprehensive income for the year then ended;• the statement of changes in equity for the year then ended;• the statement of cash flows for the year then ended; and• the notes comprising significant accounting policies and other explanatory information.

BASIS FOR OPINIONWe conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of the Financial Statements” section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

IndependenceWe are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code). We have fulfilled our other ethical responsibilities in accordance with the IESBA Code.

Key auDIT maTTeRsKey audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

STATEMENT OF COMPLIANCE INDEPENDENT AUDITOR’S REPORTTo the Shareholders of Vivo Energy Mauritius Limited

Key audit matter

Accounting treatment for defined retirement benefit obligations

See note 2 of the financial statements for the Directors’ disclosures of the accounting policies for defined retirement benefit obligations.

As at 31 December 2016, the Company has a net defined retirement benefit liability of Rs 80.3 million, a 50% increase

How our audit addressed the key audit matter

Accounting treatment for defined retirement benefit obligations

We obtained the pension valuation report and an understanding through discussion with the external actuary of the methodology used to derive the discount rate.

We agreed the discount and inflation rates, together with the expected rates of return on plan assets used in the valuation of the pension obligation by the external actuary,


of Rs 26.9 million from the previous year.The increase arises due to changes in actuarial assumptions, particularly a decrease in the discount rate, which follows the decrease in the local repo rate.

The valuation of the net liability is carried out by the external actuary engaged by management. The valuation is dependent on market conditions and key assumptions made, in particular relating to investment markets, discount rates, salary increases, inflation expectations and life expectancy assumptions.

The setting of these assumptions is complex and requires the exercise of significant management judgement with the support of the external actuary.

INDEPENDENT AUDITOR’S REPORTTo the Shareholders of Vivo Energy Mauritius Limited (continued)


to our internally developed benchmarks. We compared the assumptions around salary increases and mortality to national and industry averages.

We further tested the membership data used in the valuation of the pension obligation, including leavers’ data, to assess whether the basis of the valuation is appropriate.

We also assessed the competence, capabilities and objectivity of the external actuary and verified his qualifications.

From the work completed, we are satisfied that the methodology and assumptions applied in relation to determining the pension obligation are appropriate.

OTHeR InFORmaTIOn The directors are responsible for the other information. The other information comprises the directors’ report, the secretary’s report, the corporate governance report and the statement of compliance, which we obtained prior to the date of this auditor’s report and the introduction and strategic review, which are expected to be made available to us after that date. Other information does not include the financial statements and our auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. Our reporting responsibilities regarding the corporate governance report is dealt with in the “Report on Other Legal and Regulatory Requirements” section of this report.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

When we read the introduction and the strategic review, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

ResPOnsIBILITIes OF THe DIReCTORs FOR THe FInanCIaL sTaTemenTsThe directors are responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards and in compliance with the Mauritian Companies Act 2001, and for such internal

control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

The directors are responsible for overseeing the financial reporting process.

auDITOR’s ResPOnsIBILITIes FOR THe auDIT OF THeFInanCIaL sTaTemenTsOur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,

design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit 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 internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.


InCOme sTaTemenTFOR THe yeaR enDeD 31 DeCemBeR 2016

2016 2015 Note Rs’000 Rs’000

Sales 9,106,874 10,139,537Cost of sales ( 8,229,861) ( 9,318,404)

Gross profit 877,013 821,133Other income 6 76,822 76,754Other (losses)/gains on exchange - net ( 1,146) 5,182Distribution costs ( 97,265) ( 89,655)Administrative expenses ( 482,426) ( 477,980)

Operating profit 7 372,998 335,434 Finance income 8 5,732 1,867Finance costs 8 ( 5,045) ( 8,097)

Finance income/(costs) - net 8 687 ( 6,230)Share of profit of joint ventures 7,511 10,594

Profit before income tax 381,196 339,798Income tax expense 9 ( 60,324) ( 57,171)

Profit for the year 320,872 282,627 Basic and diluted earnings per share Rs 10.94 9.64

Number of shares used in the calculation (000’s) 29,322 29,322

The notes on pages 68 to 107 are an integral part of these financial statements.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

RePORT On OTHeR LeGaL anD ReGuLaTORy RequIRemenTs Mauritian Companies Act 2001The Mauritian Companies Act 2001 requires that in carrying out our audit we consider and report to you on the following matters. We confirm that:(a) we have no relationship with or interests in the Company other than in our capacity as auditor;(b) we have obtained all the information and explanations we have required; and(c) in our opinion, proper accounting records have been kept by the Company as far as appears from our examination of those records.

Financial Reporting Act 2004The directors are responsible for preparing the corporate governance report. Our responsibility is to report on the extent of compliance with the Code of Corporate Governance (the “Code”) as disclosed in the annual report on pages 6 to 26 and on whether the disclosure is consistent with the requirements of the Code.

In our opinion, the disclosure in the annual report on pages 31 to 57 is consistent with the requirements of the Code.

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

PricewaterhouseCoopers Robert Coutet, licensed by FRC

24 March 2017



sTaTemenT OF COmPReHensIve InCOmeFOR THe yeaR enDeD 31 DeCemBeR 2016

sTaTemenT OF FInanCIaL POsITIOn31 DeCemBeR 2016

2016 2015 Note Rs’000 Rs’000

ASSETS Non-current assets Property, plant and equipment 12 1,085,388 1,056,118Intangible assets 13 2,237 2,124Prepaid operating leases 14 9,784 10,362Other long-term assets 15 5,990 6,524Interest in joint ventures 16 39,538 46,402 1,142,937 1,121,530

Current assets Inventories 17 416,363 619,093Trade and other receivables 18 776,162 690,102Cash and cash equivalents 24 397,785 67,664 1,590,310 1,376,859Total assets 2,733,247 2,498,389

EQUITY & LIABILITIES Equity Share capital 19 293,223 293,223Retained earnings 583,290 431,917Total equity 876,513 725,140

LIABILITIES Non-current liabilities Deferred income tax liabilities 20 71,824 68,701Retirement benefit obligations 21 80,326 53,426 152,150 122,127

Current liabilities Bank overdrafts 24 - 98,935Trade and other payables 22 1,339,267 1,195,956Deposits on LPG cylinders 23 344,043 322,134Current income tax liabilities 9 21,274 34,097 1,704,584 1,651,122Total liabilities 1,856,734 1,773,249

Total equity and liabilities 2,733,247 2,498,389

Approved by the Board of Directors on 24 March 2017and signed on its behalf by: ) ) ) DIRECTORS )

2016 2015 Note Rs’000 Rs’000

Profit for the year 320,872 282,627

Other comprehensive incomeItems that will not be reclassified to profit or loss Remeasurements of post employment benefit obligations 21 ( 31,108) 22,904

Deferred tax asset/(liability) on remeasurements ofpost employment benefit obligations 20 5,288 ( 3,894)

Other comprehensive income for the year, net of tax ( 25,820) 19,010

Total comprehensive income for the year 295,052 301,637

The notes on pages 68 to 107 are an integral part of these financial statements.The notes on pages 68 to 107 are an integral part of these financial statements.


sTaTemenT OF CHanGes In equITyFOR THe yeaR enDeD 31 DeCemBeR 2016

sTaTemenT OF CasH FLOWsFOR THe yeaR enDeD 31 DeCemBeR 2016

2016 2015 Rs’000 Rs’000

Cash flows from operating activities Profit before income tax 381,196 339,798Adjustments for : Depreciation on property, plant and equipment (Note 12) 121,663 104,063 Provision for impairment of receivables (Note 18) 2,791 11,224 Amortisation of intangible assets (Note 13) 802 106 Amortisation of prepaid operating leases (Note 14) 578 451 Interest expense (Note 8) 5,045 8,097 Profit on disposal of property, plant and equipment (Note 7) ( 56) ( 65) Interest income (Note 8) ( 5,732) ( 1,867) Unrealised loss/(gain) on exchange 1,639 ( 3,123) Share of profit of joint venture (Note 16) ( 7,511) ( 10,594) Decrease in retirement benefit obligations ( 4,208) ( 5,393)

Cash generated before working capital changes 496,207 442,697Decrease in inventories 202,730 47,858(Increase)/decrease in receivables and prepayments ( 79,784) 321,173Increase/(decrease) in trade and other payables 142,917 ( 143,477)Increase in deposits on LPG cylinders 21,909 27,635

Cash generated from operations 783,979 695,886Interest paid ( 5,045) ( 8,097)Income tax paid (Note 9) ( 64,735) ( 15,296)Net cash generated from operating activities 714,199 672,493

Cash flows from investing activities Proceeds from disposal of property, plant and equipment 56 68Interest received 5,732 1,867Loan to dealers ( 7,000) -Dividends received from joint venture (Note 16) 15,000 -Payments for purchase of property, plant and equipment and intangible assets ( 151,848) ( 263,941)Investment in joint venture (Note 16) ( 625) -Net cash used in investing activities ( 138,685) ( 262,006)

Cash flows from financing activities Dividends paid to company’s shareholders ( 143,679) ( 85,035)Net cash used in financing activities ( 143,679) ( 85,035)Net increase in cash, cash equivalents and bank overdrafts 431,835 325,452Cash, cash equivalents and bank overdrafts at beginning of year ( 31,271) ( 360,579)Effect of exchange rate changes on cash and bank overdrafts ( 2,779) 3,856Cash, cash equivalents and bank overdrafts at end of year 397,785 ( 31,271)

Share Retained Total Capital Earnings Equity Rs’000 Rs’000 Rs’000

At 01 January 2015 293,223 215,315 508,538 Comprehensive income Profit for the year - 282,627 282,627Other comprehensive income - 19,010 19,010Total comprehensive income - 301,637 301,637

Transactions with owners Dividends declared (Note 25) - ( 85,035) ( 85,035)Total transactions with owners - ( 85,035) ( 85,035)At 31 December 2015 293,223 431,917 725,140

At 01 January 2016 293,223 431,917 725,140 Comprehensive income Profit for the year - 320,872 320,872Other comprehensive income - ( 25,820) ( 25,820)Total comprehensive income - 295,052 295,052

Transactions with owners Dividends declared (Note 25) - ( 143,679) ( 143,679)Total transactions with owners - ( 143,679) ( 143,679)At 31 December 2016 293,223 583,290 876,513

The notes on pages 68 to 107 are an integral part of these financial statements.The notes on pages 68 to 107 are an integral part of these financial statements.


nOTes TO THe FInanCIaL sTaTemenTs31 DeCemBeR 2016 (COnTInueD)


nOTes TO THeFInanCIaL sTaTemenTs31 DeCemBeR 2016

changes in own credit risk in other comprehensive income, for liabilities designated at fair value through profit or loss. IFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and for the ‘hedged ratio’ to be the same as the one management actually uses for risk management purposes. Contemporaneous documentation is still required but is different to that currently prepared under IAS 39. The standard is effective for accounting periods beginning on or after 1 January 2018. Early adoption is permitted. The Company is yet to assess IFRS 9’s full impact.

IFRS 15, ‘Revenue from contracts with customers’ deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. Revenue is recognised when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces IAS 18 ‘Revenue’ and IAS 11 ‘Construction contracts’ and related interpretations. The standard is effective for annual periods beginning on or after 1 January 2018 and earlier application is permitted. The Company is assessing the impact of IFRS 15.

In January 2016, the International Accounting Standards Board (IASB) issued IFRS 16, ‘Leases’. IFRS 16 will replace the current IAS 17 standard on leases. The effective date is 1 January 2019. The new standard requires that for lessees all leases, regardless of whether they are operating or financial in nature, will be on the statement of financial position and accounted for as “financial leases”. There are some exemptions which could be applied and these relate to leases of 12 months or less (short-term leases), and leases of low-value assets. For such leases, the lease costs will be accounted for in the same way as operating leases are accounted for today. IFRS 16 will significantly change the way lessees account for leases, however lessor accounting remains largely the same and the classification as a finance lease or operating lease is still a consideration. This means that straight-lining of operating leases will remain for lessors. Management has yet to assess the impact of this new standard.

Segment reportingOperating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chief Executive Officer.

Foreign currency translation• Functional and presentation currencyItems included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The financial statements are presented in thousands of Mauritian Rupee (Rs’000), which is the Company’s functional and presentation currency.

• Transactions and balancesForeign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in other comprehensive income as qualifying cash flow hedges and qualifying net investment hedges.

Foreign exchange gains and losses are presented in the income statement within ‘Other gains / losses on exchange – Net’.

Property, plant and equipment and depreciationProperty, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount

1 GeneRaL InFORmaTIOn

Vivo Energy Mauritius Limited (the “Company”), is a limited liability company listed on the Stock Exchange of Mauritius and is incorporated and domiciled in Mauritius.

The Company’s principal activity is the marketing and distribution of petroleum products. Its joint venture, Energy Storage Company Limited, is involved in the provision of LPG terminal usage facilities. The Company has invested in a new joint venture, Mer Rouge Oil Storage Terminal Co.Ltd, which is involved in the storage of petroleum products, but is not yet operational.

These financial statements were authorised for issue by the Board of Directors on 24 March 2017.

2 summaRy OF sIGnIFICanT aCCOunTInG POLICIes

The principal accounting policies applied in the preparation of these financial statements, are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparationThe financial statements of Vivo Energy Mauritius Limited have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and comply with the Mauritian Companies Act 2001. The financial statements have been prepared under the historical cost convention. The financial statements are presented in Mauritian Rupees (‘Rs’), rounded to the nearest thousand.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity,

or areas where assumptions and estimates are significant to the financial statements are discussed in Note 3.

Changes in accounting policies and disclosures(a) New standards, amendments and interpretations adopted by the Company

There are no standards, interpretations or amendments to existing standards that are effective for the first time for the financial year beginning 1 January 2016 that have had a material impact on the Company.

(b) New standards, amendments and interpretations not yet adopted

A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2016, and have not been applied in preparing these financial statements. None of these is expected to have a significant effect on the financial statements of the Company, except the following set out below:

IFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition of financial assets and financial liabilities. The complete version of IFRS 9 was issued in July 2014. It replaces the guidance in IAS 39 that relates to the classification and measurement of financial instruments. IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortised cost, fair value through OCI and fair value through P&L. The basis of classification depends on the entity’s business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss with the irrevocable option at inception to present changes in fair value in OCI not recycling. There is now a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39. For financial liabilities there were no changes to classification and measurement except for the recognition of


NOTES TO THE FINANCIAL STATEMENTS31 DECEMBER 2016 (CONTINUED)


Management determines the classification of its financial assets at initial recognition.

Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the reporting date. These are classified as non-current assets. The Company’s loans and receivables comprise ‘other long term assets’, ‘trade and other receivables’, and ‘cash and cash equivalents’ in the statement of financial position.

Recognition and measurementRegular purchases and sales of financial assets are recognised on the trade date, which is the date on which the Company commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. Loans and receivables are subsequently carried at amortised cost using the effective interest method.

Offsetting financial instrumentsFinancial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

Impairment of financial assetsAssets carried at amortised costThe Company assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant

financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

For loans and receivables category, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the income statement. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the Company may measure impairment on the basis of an instrument’s fair value using an observable market price.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in the income statement.

InventoriesInventories are stated at the lower of cost and net realisable value. As from 01 January 2016, cost of inventories (fuels) is determined using the weighted average method (previously first-in, first-out method). This change in accounting policy was not material for prior year restatement as the fuels inventory turnover is relatively high. Cost comprises direct costs only. Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and applicable variable selling expenses. For lubricants and accessories, the weighted average method was already being used to determine the cost of inventories.

Spares, accessories and supplies included under inventories consist of items which are regularly used for repairs, maintenance and new installations. They are stated at the lower of cost and net realisable value.

of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

No depreciation is provided on freehold land and on assets in the course of construction. Buildings on leasehold land are depreciated over the period of the lease if less than 20 years. Depreciation on other assets is calculated using the straight-line method to allocate their cost less their residual values over their estimated useful lives. The annual rates used are:

Freehold Buildings 2.5% - 20.0%Plant and equipment 3.3% - 50.0%Motor vehicles 15.0% - 20.0%Computer equipment 20.0% - 33.3%Furniture and fittings 5.0% - 20.0%

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

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within ‘Other income’ in the income statement.

Intangible assetsAcquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives (not exceeding three years).

Costs associated with maintaining computer software programmes are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Company, are recognised as intangible assets, when the following criteria have been met:

• It is technically feasible to complete the software product so that it will be available for use;

• Management intends to complete the software product

and use or sell it;• There is an ability to use or sell the software product;• It can be demonstrated how the software product will

generate probable future economic benefits; • Adequate technical, financial and other resources to

complete the development and to use or sell the software product are available; and

• The expenditure attributable to the software product during its development can be reliably measured.

Directly attributable costs that are capitalised as part of the software product include the software development employee costs and an appropriate portion of relevant overheads.

Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

Computer software development costs recognised as assets are amortised over their estimated useful lives, not exceeding three years. Impairment of non-financial assetsIntangible assets that have an indefinite useful life or intangible assets not ready to use are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). Prior impairments of non-financial assets (other than goodwill) are reviewed for possible reversal at each reporting date.Financial assets

ClassificationThe Company classifies its financial assets in the category ‘Loans and receivables’. The classification depends on the purpose for which the financial assets were acquired.




income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease term.

Investment in joint venturesThe Company has applied IFRS 11 to all joint arrangements. Under IFRS 11, investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. The Company has assessed the nature of its joint arrangements and determined them to be joint ventures. Joint ventures are accounted for using the equity method.

Under the equity method of accounting, interests in joint ventures are initially recognised at cost and adjusted thereafter to recognise the Company’s share of the post-acquisition profits or losses and movements in profit or loss. When the Company’s share of losses in a joint venture equals or exceeds its interests in the joint ventures (which includes any long-term interests that, in substance, form part of the Company’s net investment in the joint ventures), the Company does not recognise further losses, unless it has incurred obligations or made payments on behalf of the joint ventures.

Current and deferred income taxThe tax expense for the period comprises current, deferred income tax and Corporate Social Responsibility contribution. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the reporting date. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and

their carrying amounts in the financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax is provided on temporary differences arising from depreciation on plant and equipment, provision for impairment of receivables, provision for slow-moving inventory and retirement benefit obligations, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Employee benefits• Pension and retirement plans

The Company has both a defined benefit pension plan and a defined contribution pension plan.

A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. The plan is funded by the payments from the Company taking account of the recommendations of independent qualified actuaries.The liability recognised in the statement of financial position in

Trade receivablesTrade receivables are amounts due from customers for goods sold in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade and other receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 90 days overdue) are considered indicators that the receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount and its recoverable amount, being the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the statement of comprehensive income. When a receivable is uncollectible, it is written off against the allowance account for trade or other receivables. Subsequent recoveries of amounts previously written off are credited against ‘administrative expenses’ in the statement of comprehensive income. Bad debts are written off in the year in which they are identified.

Cash and cash equivalentsIn the statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. Bank overdrafts are shown separately on the statement of financial position.

Share capitalOrdinary shares are classified as “Share Capital” in equity.

Where any group company purchases the Company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs is deducted from equity attributable to the Company’s equity holders until the shares are cancelled or reissued.

Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs is included in equity.

Trade payablesTrade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method.

Accounting for leasesLeases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the income statement on a straight-line basis over the period of the lease.

The Company leases land under operating leases. Upfront lease payments are carried forward as prepaid operating leases under non-current assets and are amortised so as to record a constant annual charge to the profit or loss over the lease period. Other payments made under operating leases are charged to the profit or loss on a straight line basis over the period of the lease.

When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place.Leases of property, plant and equipment, where the Company has substantially all the risks and rewards of ownership, are classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased property and the present value of the minimum lease payment.

Each lease payment is allocated between the liability and finance charges. The corresponding rental obligations, net of finance charges, are included in trade and other payables. The interest element of the finance cost is charged to the




Revenue recognitionRevenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for goods supplied, stated net of discounts, returns and value added taxes. The Company recognises revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met for each of the Company’s activities, as described below.

Sale of goodsSales are recognised upon delivery of products and customer acceptance, if any, net of trade discounts and value added tax.

Dividend incomeDividend income is recognised when the right to receive payment is established.

Interest incomeInterest income is recognised using the effective interest method. When a loan and receivable is impaired, the Company reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Dividend distributionsDividend distributions to the Company’s shareholders are recognised as a liability in the Company’s financial statements in the year in which the dividends are approved by the Company’s shareholders.

3 CRITICaL aCCOunTInG esTImaTes anD JuDGemenTs

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including experience of future events that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptionsThe Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts

of assets and liabilities within the next financial year are addressed below.

• Pension benefits

The present value of the pension obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate. Any changes in these assumptions will impact the carrying amount of pension obligations.

The Company’s actuary determines the appropriate discount rate at the end of each year in consultation with the management of the Company. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. In determining the appropriate discount rate, the Company considers the interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability.

Other key assumptions for pension obligations are based in part on current market conditions. Additional information is disclosed in Note 21.

4 FInanCIaL RIsK manaGemenT

Financial risk factorsThe Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk and cash flow interest rate risk), credit risk and liquidity risk. The Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial performance.

Risk management remains within the responsibility of the Board of Directors to whom the Audit and Risk committee reports. The board provides written principles for overall risk management, as well as written policies covering specific areas, such as currency risk, interest rate risk, credit risk, and investment of excess liquidity.

respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation. In countries where there is no deep market in such bonds, the market rates on government bonds are used. The actuaries carry out a full valuation of the plan every three/four years (the latest full valuation was done in January 2015).

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise.

Past-service costs are recognised immediately in the income statement.

A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. The Company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

A defined benefit plan is a pension plan that is not a defined contribution plan.

For defined contribution plans, the Company pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Company has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.

• Other benefitsEmployee entitlement to annual leave and other benefits are recognised when they accrue to the employees.

• Termination benefitsTermination benefits are payable when employment is terminated by the Company before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Company recognises termination benefits at the earlier of the following dates: (a) when the Company can no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is within the scope of IAS 37 and involves the payment of termination benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.

Deposits on LPG cylindersDeposits on LPG cylinders are accounted for as part of current liabilities and are recognised at historical cost in the financial statements.ProvisionsProvisions for environmental restoration, restructuring costs and legal claims are recognised when: the Company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation, and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.




Management considers that a 50 basis point shift in interest rate is reasonable as the repo rate has fluctuated by 40 basis points in 2016 (25 basis points in 2015).

(b) Credit risk

Credit risk refers to the risk that a counter-party will default on its contractual obligations resulting in financial loss to the Company.

Credit risk arising from trade receivables is managed at the Company level. Credit risk arises from credit exposures to wholesale and retail customers, including outstanding receivables and committed transactions. The credit control department assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal ratings in accordance with limits set by the board. The utilisation of credit limits is regularly monitored.

In cases where credit limits were exceeded during the year, this was done in accordance with the Company’s procedures and management does not expect any major losses from non-performance by these counterparties. In the event of default of customers, who require timely delivery of petroleum products, LPG & Lubricants to run their operations, the Company reserves the right to stop delivery of these products until the outstanding debt is recovered.

Credit risk arising on cash and cash equivalents is considered to be minimal as these are placed with reputable financial institutions.

Credit risk arising on other long-term assets, consisting mainly of loan to dealers, is considered to be minimal since repayment of the loans is done principally through discount provided by the Company to the dealers.

(c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to close

out market positions. Due to the dynamic nature of the underlying businesses, company treasury maintains flexibility in funding by maintaining availability of liquid resources under committed credit lines.

All of the Company’s financial liabilities, which includes trade and other payables, deposit on LPG cylinders and bank overdrafts are payable within 12 months and the amounts recognised in the statement of financial position of Rs 1,683,310,000 (2015: Rs 1,617,025,000) are approximately equal to the contractual undiscounted cash flows. All balances due within 12 months equal their carrying amounts, as the impact of discounting is not significant.

The Company adopts prudent liquidity risk management by maintaining sufficient cash and cash equivalents to meet its normal operating commitments.

Capital risk management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.The capital of the Company consists of equity and retained earnings. The Company does not have any debt, other than short-term bank overdrafts. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders.

There are no external capital requirements.

Fair value estimation

The carrying value of trade and other receivables, cash and cash equivalents, bank overdrafts, trade and other payables and deposits on LPG cylinders are assumed to approximate their fair values due to their short term maturities.

Offsetting financial assets and liabilities

There were no financial asset and financial liability that were subject to offsetting at 31 December 2016.

(a) Market risk(i) Foreign exchange risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Company transacts with international customers and suppliers and is exposed to currency risk arising from various currency exposures, primarily with respect to the United States dollar (‘USD’). Currency risk arises from future commercial transactions and recognised assets and liabilities. It is the Company’s policy not to enter into any currency hedging transactions. To manage its foreign exchange risk arising from future commercial transactions and recognised assets and liabilities, the Company maintains sufficient liquid resources in from its USD denominated receipts to meet its USD denominated obligations as they fall due.The currency profile of the Company’s USD-denominated financial assets and liabilities is summarised as follows:

At 31 December 2016, if the Mauritian rupee had weakened/strengthened by 5% (2015 – 10%) against the USD with all other variables held constant, pre-tax profit for the year would have increased/decreased by Rs 2,073,400 (2015 - Rs 14,782,100), mainly as a result of currency gains/losses on translation of US dollar-denominated trade receivables and trade payables.

Management considers a 5% (2015 – 10%) shift in foreign currency exchange rate is appropriate to determine the sensitivity of USD denominated financial assets and liabilities vis a vis the Mauritian rupee.

(ii) Price risk

Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices of equity (other than those arising from interest rate risk or currency risk).

The Company is not exposed to equity price risk as it does not have any investment in equity securities.

The Company is exposed to commodity price risk on non-regulated products. To manage its risk, the Company keeps its inventory level for non-regulated products to the strict minimum. Split pricing is also used as a mitigation measure. At 31 December 2016, if the price of unregulated products had increased/decreased by 5% (2015 – 5%) with all other variables held constant, pre-tax profit for the year would have increased/decreased by Rs 17,582,661 (2015 - Rs 17,769,600).

The Company is not exposed to commodity price risk on regulated products since their margins are fixed by The State Trading Corporation.

(iii) Cash flow and fair value interest rate risk

Cash flow interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of the assets. The Company’s interest rate risk arises from cash and cash equivalents and short-term bank overdrafts which bear interest at variable rates. The Company does not have long-term borrowings. The Company mitigates this risk by holding enough cash resources that in turn earn variable interest rates and invests in financial institutions where it can earn the highest rates of interest.

Based on the simulations performed, the impact on pre-tax profit of a 50 basis point (2015 – 25 basis point) increase/decrease in interest rate on borrowings would be a maximum decrease/increase of Rs Nil (2015 - Rs 247,338), respectively based on the interest bearing bank overdrafts the Company had at 31 December.

Financial Financial Financial Financial assets liabilities assets liabilities 2016 2016 2015 2015 Rs’000 Rs’000 Rs’000 Rs’000

United StatesDollar 274,580 233,112 192,493 340,314




5 seGmenT InFORmaTIOn

The directors are of the opinion that the segment information presented below gives a good reflection of how they decide to allocate resources as they consider that the main consideration in determining their strategy depends on whether they can control or not the price and margin of their products. Hence, the directors believe it is appropriate that the disclosure on segment analysis be separated between regulated and non-regulated.

The operations of the joint ventures comprise of LPG terminal usage facilities. Mer Rouge Oil Storage Terminal Co.Ltd has not yet started its operations.

There are no sales between the different segments. Revenue from no single customer amounted to 10% or more of the Company’s total revenue. Unallocated costs represent net expenses that do not directly relate to a segment. Segment assets consist primarily of property, plant and equipment, prepaid operating leases, other long term assets, inventories, trade and other receivables and prepayments, investment in joint ventures, and exclude cash and cash equivalents. Segment liabilities comprise operating liabilities and exclude items such as taxation. Capital expenditure comprises additions to property, plant and equipment.

5 seGmenT InFORmaTIOn (COnTInueD)

Year ended 31 December 2016 Regulated Non-Regulated Total Rs’000 Rs’000 Rs’000

Revenue from external customers 5,911,241 3,195,633 9,106,874Segment results 133,296 302,410 435,706Unallocated costs ( 62,708)Operating profit 372,998Finance income 5,732Finance cost ( 5,045)Share of profits of joint venture ( 138) 7,649 7,511Profit before income tax 381,196Income tax expense ( 60,324)Profit for the year 320,872 Segment assets 944,158 822,528 1,766,686Joint venture 17,120 22,418 39,538Unallocated assets 927,023Total assets 2,733,247 Segment liabilities 893,974 689,993 1,583,967Unallocated liabilities 272,767Total liabilities 1,856,734Other segment items Capital expenditure 93,292 24,528 117,820Depreciation ( 75,444) ( 33,350) ( 108,794)Amortisation ( 1,242) ( 32) ( 1,274) Unallocated items Capital expenditure 34,028Depreciation ( 12,869)Amortisation ( 106)

The amounts provided to the chief operating decision-maker with respect to the total assets and total liabilities are measured in a manner consistent with that of the financial statements.

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




5 seGmenT InFORmaTIOn (COnTInueD)5 seGmenT InFORmaTIOn (COnTInueD)

Year ended 31 December 2015 Regulated Non-Regulated Total Rs’000 Rs’000 Rs’000

Revenue from external customers 6,350,725 3,788,812 10,139,537Segment results 167,936 278,517 446,453Unallocated costs ( 111,019)Operating profit 335,434Finance income 1,867Finance cost ( 8,097)Share of profits of joint venture (7) 10,601 10,594Profit before income tax 339,798Income tax expense ( 57,171)Profit for the year 282,627 Segment assets 1,132,489 809,045 1,941,534Joint venture 16,633 29,769 46,402Unallocated assets 510,453Total assets 2,498,389 Segment liabilities 797,744 614,792 1,412,536Unallocated liabilities 360,713Total liabilities 1,773,249

Other segment items Capital expenditure 202,148 28,317 230,465Depreciation ( 62,801) ( 29,557) ( 92,358)Amortisation ( 451) - ( 451) Unallocated items Capital expenditure 33,477Depreciation ( 11,705)Amortisation ( 106)

The amounts provided to the chief operating decision-maker with respect to the total assets and total liabilities are measured in a manner consistent with that of the financial statements.

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

Year ended 31 December 2016 (continued) Assets Liabilities Rs’ 000 Rs’ 000

Segment assets and liabilities are reconciled to the Company’s assets and liabilities as follows: Segment assets/liabilities and interest in joint ventures 1,806,224 1,583,967Unallocated: Property, plant and equipment 251,026 Value added tax recoverable 13,714 Other receivables and prepayments 264,498 Cash and cash equivalents 397,785 Retirement benefit obligations 80,326Deferred income tax liabilities 71,824Bank overdrafts -Other payables 99,343Current income tax liabilities 21,274Total 2,733,247 1,856,734




The following items have been (credited)/charged in arriving at operating profit:

2016 2015 Rs’000 Rs’000 (Profit)/loss on disposal of property, plant and equipment ( 56) ( 65)Depreciation on property, plant and equipment (Note 12) - included in cost of sales 96,892 89,156 - included in administrative expenses 24,771 14,907Amortisation of intangible assets (Note 13) 802 106Amortisation of prepaid operating leases (Note 14) 578 451Fees paid to auditor - audit services 1,800 1,800 - audit related services 889 882Operating lease charges on land and buildings 8,261 7,172Operating lease charges on motor vehicles 5,023 4,974Operating lease charges on vehicles for distribution purposes 37,505 39,204Repairs and maintenance: - included in cost of sales 3,689 3,474 - included in administrative expenses 22,740 20,138Staff costs (Note 11) - included in cost of sales 15,993 15,313 - included in administrative expenses 173,190 166,945 - included in finance costs 3,527 4,663Provision for impairment of receivables (Note 18) 2,791 11,224Cost of inventories recognised as expense - included in cost of sales 8,055,012 9,147,955

8 FInanCe InCOme/(COsTs) – neT

2016 2015 Rs’000 Rs’000

Finance costs: Interest expense ( 1,518) ( 3,434) Accretion on retirement benefit ( 3,527) ( 4,663) ( 5,045) ( 8,097) Finance income: Interest income 5,732 1,867 5,732 1,867Net finance income/(costs) 687 ( 6,230)

Year ended 31 December 2015 (continued) Assets Liabilities Rs’ 000 Rs’ 000

Segment assets and liabilities are reconciled to the Company’s assets and liabilities as follows: Segment assets/liabilities and interest in joint ventures 1,987,936 1,412,536Unallocated: Property, plant and equipment 237,095 Value added tax recoverable 19,046 Other receivables and prepayments 186,648 Cash and cash equivalents 67,664 Retirement benefit obligations 53,426Deferred income tax liabilities 68,701Bank overdrafts 98,935Other payables 105,554Current income tax liabilities 34,097Total 2,498,389 1,773,249

6 OTHeR InCOme

2016 2015 Rs’000 Rs’000

Rental income 14,366 15,959Management fees 4,778 4,624Profit on disposal of property, plant and equipment 56 65Fuel storage fee 25,023 29,036Throughput fee 9,023 10,077Tanker discharge fee 933 1,075Non-fuel retailing income 11,743 2,349Other customer fees 4,768 5,847Others 6,132 7,722 76,822 76,754

5 seGmenT InFORmaTIOn (COnTInueD) 7 OPeRaTInG PROFIT 5 seGmenT InFORmaTIOn (COnTInueD)




10 eaRnInGs PeR sHaRe

The calculation of earnings per share is based on the Company’s profit for the year of Rs 320,872,000 (2015 - Rs 282,627,000) and on 29,322,252 ordinary shares in issue during the two years ended 31 December 2016 and 31 December 2015. There were no potentially dilutive shares outstanding at 31 December 2016 or 2015. Diluted earnings per share are therefore the same as basic earnings per share.

11 sTaFF COsTs

2016 2015 Rs’000 Rs’000 Wages and salaries 143,060 138,031Social security costs 1,917 1,853Pension costs – defined benefit plan 7,053 6,638Pension costs – defined contribution plan 14,671 14,062Other benefits 38,464 43,258Termination benefits 8,078 -Recharge of costs to related companies (20,533) (16,921) 192,710 186,921

2016 2015 Number Number Number of employees at year end 122 126

Directors’ emoluments included in staff costs are as follows:

2016 2015 Rs’000 Rs’000 Short-term benefits 18,908 18,914Post-employment benefits 2,750 2,591 21,658 21,505

The recharge of costs is in respect of 9 (2015 - 10) central staff based in Mauritius whose costs are incurred by the Company and recharged to VEIBV (Vivo Energy Investment BV).

2016 2015 Rs’000 Rs’000

Charge for the year Based on the profit for the year, as adjusted for tax purposes, at 17 % (2015 - 17%) 53,710 53,255Over-provision of income tax in previous year ( 1,797) ( 275)(Over)/under-provision of deferred tax in previous year ( 498) 11Deferred income tax (Note 20) 8,909 4,180Charge to income statement 60,324 57,171

Current income tax (asset)/liabilities 2016 2015 Rs’000 Rs’000

At 01 January 34,097 ( 3,587)Charge for the year 51,913 52,980Paid during the year, based on - Previous year’s profit ( 29,449) - - Current year’s profit ( 35,287) ( 15,296)At 31 December 21,274 34,097

A reconciliation between the effective rate of income tax of the Company of 15.83% (2015 – 16.82%) and the applicable income tax rate of 17% (2015 - 17%) follows:

(As a percentage of profit before taxation)

2016 2015 % % Applicable income tax rate 17.00 17.00Impact of: Depreciation on non-qualifying assets 0.03 0.02 Other non-allowable expenses 0.09 0.37 Share of profit of joint venture ( 0.33) ( 0.53) Other non-taxable income ( 0.36) ( 0.42) CSR/TDS - 0.46 Over-provision of income tax in previous year ( 0.47) ( 0.08) (Over)/under-provision of deferred tax in previous year ( 0.13) -Effective income tax rate 15.83 16.82

9 InCOme Tax exPense




13 InTanGIBLe asseTs

Computer software Rs’000

Cost: At 01 January 2015 2,515Additions 1,912Assets capitalised 318

At 31 December 2015 4,745Additions 915Disposals ( 2,515)

At 31 December 2016 3,145

Accumulated amortisation: At 01 January 2015 2,515Charge for the year 106

At 31 December 2015 2,621Charge for the year 802Disposals ( 2,515)

At 31 December 2016 908

Net book amount: At 31 December 2016 2,237


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16 InvesTmenT In JOInT venTuRes

ESCOL MOST Total 2016 2015 2016 2015 2016 2015 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 Rs’000

Cost: At 01 January 15,000 15,000 17,000 17,000 32,000 32,000Investment in share capital - - 625 - 625 -At 31 December 15,000 15,000 17,625 17,000 32,625 32,000

Share of post-acquisition reserves: At 01 January 14,769 4,167 ( 367) ( 360) 14,402 3,807Share of profit after income tax 7,649 10,602 ( 138) ( 7) 7,511 10,595Dividends received ( 15,000) - - - ( 15,000) -Other comprehensive income - - - - - -At 31 December 7,418 14,769 ( 505) ( 367) 6,913 14,402

Net book amount: At 31 December 22,418 29,769 17,120 16,633 39,538 46,402

Nature of investment in joint venture 2016 and 2015:

Name of entity Place of Activity Description of % % incorporation / shares held holding holding business 2016 2015 Energy Storage Co.Ltd Mauritius LPG storage Ordinary 50.0 50.0

Mer Rouge Oil Storage Mauritius Storage of Ordinary 23.5 25.0Terminal Co.Ltd petroleum products

Energy Storage Company Limited (ESCOL) and Mer Rouge Oil Storage Terminal Co.Ltd (MOST) are private companies and there are no quoted market prices available for their shares.There are no contingent liabilities and restrictions relating to the Company’s interest in its joint ventures.

14 PRePaID OPeRaTInG Leases

Rs’000

Cost: At 01 January 2015 1,473Additions 10,209

At 31 December 2015 11,682At 31 December 2016 11,682

Amortisation: At 01 January 2015 869Charge for the year 451

At 31 December 2015 1,320Charge for the year 578


Net book amount: At 31 December 2016 9,784At 31 December 2015 10,362

Operating leases represent upfront lease payments on certain lease of land.

15 OTHeR LOnG-TeRm asseTs

2016 2015 Rs’000 Rs’000 Loans to Dealers 5,990 6,524 5,990 6,524

Loans to Dealers relate to loan agreements between the Company and several retailers for the construction of service stations.




16 InvesTmenT In JOInT venTuRes (COnTInueD)

Reconciliation of summarised financial information

Reconciliation of the summarised financial information presented to the carrying amount of its interest in the joint venture: Summarised financial information ESCOL MOST 2016 2015 2016 2015 Rs’000 Rs’000 Rs’000 Rs’000

Opening net assets 1 January 49,537 37,833 30,532 30,561Investment during the year - - 25,850 -Deposit on share capital - - - -Profit/(loss) for the period 15,299 21,704 (552) (28)Other comprehensive income - - - -Dividend paid ( 20,000) - - -Dividend payable - ( 10,000) - -Closing net assets 44,836 49,537 55,830 30,532Interest in joint venture @ 50%, 25% 22,418 29,769 17,120 16,633Deposit on share capital - - - -Goodwill - - - -Carrying value 22,418 29,769 17,120 16,633

16 InvesTmenT In JOInT venTuRes (COnTInueD)

Summarised financial information for joint venture:

Set out below are the summarised financial information for Energy Storage Co.Ltd and Mer Rouge Oil Storage Terminal Co.Ltd, which are accounted for using the equity method.

Summarised balance sheet ESCOL MOST As at 31 December As at 31 December

2016 2015 2016 2015 Rs’000 Rs’000 Rs’000 Rs’000 CurrentCash and cash equivalents 28,089 46,259 31,311 19,466Other current assets (excluding cash) 6,246 6,324 369 311Total current assets 34,335 52,583 31,680 19,777

Financial liabilities (excluding trade payables) - - - -Other current liabilities (including trade payables) ( 1,200) ( 13,084) - -Total current liabilities ( 1,200) ( 13,084) - -

Non-current Assets 32,803 32,375 24,150 10,755Financial liabilities - - - -Other liabilities ( 21,102) ( 22,337) - -Total non-current liabilities ( 21,102) ( 22,337) - - Net assets 44,836 49,537 55,830 30,532 Summarised statement of comprehensive income ESCOL MOST For the year ended For the year ended 31 December 31 December

2016 2015 2016 2015 Rs’000 Rs’000 Rs’000 Rs’000 Revenue 29,689 34,265 - -Depreciation and amortisation ( 2,448) ( 2,385) - - Interest income 584 713 1 2Interest expense - - - -Pre-tax profit/(loss) from continuing operations 18,451 26,149 - -Income tax expense ( 3,152) ( 4,445) - -Post-tax profit/(loss) from continuing operations 15,299 21,704 ( 552) ( 28)Post-tax profit from discontinued operations - - - -Other comprehensive income - - - -Total comprehensive income 15,299 21,704 ( 552) ( 28)Dividends received from joint venture 15,000 - - -




17 InvenTORIes

2016 2015 Rs’000 Rs’000 Goods for resale (NRV) 408,622 608,603Spares, accessories and supplies (NRV) 7,741 10,490 416,363 619,093

18 TRaDe anD OTHeR ReCeIvaBLes

2016 2015 Rs’000 Rs’000

Trade receivables 763,347 631,134Less: provision for impairment of receivables ( 26,845) ( 25,253)Trade receivables – net 736,502 605,881

Other receivables 12,423 21,382Less: provision for impairment of other receivables ( 775) ( 808)Other receivables – net 11,648 20,574Trade receivables from related companies (Note 28 (vii)) 5,246 34,049Value added tax recoverable 13,714 19,046Prepayments 9,052 10,552 28,012 63,647 776,162 690,102

The carrying amount of receivables and prepayments approximate their fair values.

Trade receivables that are less than three months past due are not considered impaired except where management identifies specific instances where a trade receivable would be subject to impairment. The ageing analysis of trade receivables that are not impaired are as follows:

2016 2015 Rs’000 Rs’000 Not past due and not impaired 737,704 635,15401 – 30 days 3,192 ( 5,628)31 – 90 days 226 6,92891 – 365 days 626 3,476 741,748 639,930

18 TRaDe anD OTHeR ReCeIvaBLes (COnTInueD)

2016 2015 Rs’000 Rs’000 1 to 3 months (gross receivable) - -1 to 3 months (provision for impairment) - - 3 to 6 months (gross receivable) - -3 to 6 months (provision for impairment) - - Over 6 months (gross receivable) 26,845 25,253Over 6 months (provision for impairment) 26,845 25,253

The carrying amounts of the Company’s trade and other receivables are denominated in the following currencies: 2016 2015 Rs’000 Rs’000Currency Mauritian rupee 590,242 510,850United States dollar 185,920 179,252 776,162 690,102

Movements on the Company’s provision for impairment of trade and other receivables are as follows:

2016 2015 Rs’000 Rs’000 At 01 January 26,061 17,466Provision for impairment of trade and other receivables 2,791 11,224Receivables written off during the year as uncollectible ( 1,232) ( 2,629)At 31 December 27,620 26,061

The creation and release of provision for impaired receivables have been included in ‘administrative expenses’ in profit or loss. Amounts charged to the allowance account are generally written off, when there is no expectation of recovering additional cash.

The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable. At 31 December 2016, the Company held bank guarantees as security on receivables amounting to Rs 73,188,000 (2015 - Rs 28,120,000).

As of 31 December 2016, trade receivables of Rs 26,845,000 (2015 - Rs 25,253,000) were impaired. The amount of the provision was Rs 26,845,000 as of 31 December 2016 (2015 - Rs 25,253,000). The individually impaired receivables relate to customers, which are in unexpected difficult economic situations. The ageing of these receivables is as follows:




21 ReTIRemenT BeneFIT OBLIGaTIOns

2016 2015 Rs’000 Rs’000 Present value of funded obligations 418,784 374,215Fair value of plan assets ( 338,458) ( 320,789)Liability in the statement of financial position 80,326 53,426

The amounts recognised in profit or loss are as follows: 2016 2015 Rs’000 Rs’000 Current service cost - -Scheme expenses 2,000 621Cost of insuring risk benefits - 1,321Effect of curtailments / settlements - -Net interest cost 3,527 4,663Other adjustments 1,559 -Total included in staff costs 7,086 6,605

The actual return on plan assets amounted Rs 21,039,000 (2015 - Rs 31,221,272).

The movement in the (asset)/liability recognised in the balance sheet is as follows:

2016 2015 Rs’000 Rs’000 At 01 January 53,426 81,723Total expense – as shown above 7,086 6,605Employer’s contributions ( 11,294) ( 11,998)Actuarial losses/(gains) recognised in other comprehensive income 31,108 (22,904) At 31 December 80,326 53,426

Pension benefits

The amounts recognised in the statement of financial position are determined as follows:

19 sHaRe CaPITaL

2016 2015 2016 2015 Number Number Rs’000 Rs’000 Authorised, Issued and fully paid: Ordinary shares of Nil par value 29,322,252 29,322,252 293,223 293,223

20 DeFeRReD InCOme Tax LIaBILITIes

The gross movement on the deferred income tax account is as follows:

2016 2015 Rs’000 Rs’000

At 01 January 68,701 60,616(Over)/under-provision of deferred tax in prior year ( 498) 11Deferred tax (asset)/liability on remeasurements of post employment benefit obligations charged to other comprehensive income ( 5,288) 3,894Charge for the year (Note 9) 8,909 4,180At 31 December 71,824 68,701 Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority.

The movements in deferred income tax assets and liabilities during the year are shown below:

Provision for Provision for Retirement Capital tax impairment of slow-moving benefit allowances receivables inventory obligations Total Rs’000 Rs’000 Rs’000 Rs’000 Rs’000 At 01 January 2015 77,478 ( 2,969) - ( 13,893) 60,616Charge to other comprehensive income - - - 3,894 3,894Under-provision of deferred tax in prior year 11 - - - 11Charge/(credit) for the year to income statement 5,760 ( 1,461) ( 1,036) 917 4,180

At 31 December 2015 83,249 ( 4,430) ( 1,036) ( 9,082) 68,701Charge to other comprehensive income - - - ( 5,288) ( 5,288)Over-provision of deferred tax in prior year ( 498) - - - ( 498)Charge/(credit) for the year to income statement 8,219 ( 265) 240 715 8,909At 31 December 2016 90,970 ( 4,695) ( 796) ( 13,655) 71,824




21 ReTIRemenT BeneFIT OBLIGaTIOns (COnTInueD)Plan assets are comprised as follows:

2016 2016 2015 2015 Rs’000 % Rs’000 % Local equities 89,536 27 67,907 21Overseas equities 132,736 39 143,264 45Fixed income 116,186 34 109,618 34

338,458 100 320,789 100

The assets of the Fund are mainly invested overseas in the Global Aggregate Bond Index Fund B and Blackrock World Index Subfund. Part of the fund is invested locally through MCBIM. There is also some cash held locally. The expected return on plan assets is determined by considering the expected returns available on the assets underlying the current investment policy. Expected returns on overseas equities reflect long-term government bond yields plus an approximate equity risk premium. Expected yields as fixed interest securities are based on government bond yields of approximately 7% per annum.

Vivo Energy Mauritius Limited is expected to contribute around Rs 11,217,000 to the pension scheme for the year ending 31 December 2017.

The duration (i.e. mean term) of the liabilities as at 31 December 2016 is 16.057 years.

The principal actuarial assumptions used were as follows:

2016 2015 % % Discount rate 5.75 7.00 Future salary increases 4.00 5.00Future pension increases 2.30 3.00NPS Ceiling increases 6.00 6.00

In case of the funded plans, the Company ensures that the investment positions are managed within an asset-liability matching (ALM) framework that has been developed to achieve long-term investments that are in line with the obligations under the pension schemes. Within this framework, the Company’s ALM objective is to match assets to the pension obligations by investing in long-term fixed interest securities with maturities that match the benefit payments as they fall due and in the appropriate currency. The Company actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the pension obligations. The Company has not changed the processes used to manage its risks from previous periods. The Company does not use derivatives to manage its risk. A large portion of assets in 2016 consists of equities and bonds, although the Company also invests in property, bonds and cash. The Company believes that equities offer the best returns over the long term with an acceptable level of risk. The majority of equities are in a globally diversified portfolio of international blue chip entities.

A triennial valuation was carried out as at 31 December 2014. As a result, contributions have been reviewed to 17.5%. This is also due to the fact that, as employees have stopped accruing service under the Defined Benefit Scheme as from 1 January 2015, there would henceforth not be any service costs.

21 ReTIRemenT BeneFIT OBLIGaTIOns (COnTInueD)

2016 2015 Rs’000 Rs’000 At 01 January 374,215 373,452Current service cost - -Interest cost 25,141 26,180Actuarial losses/(gains) 30,533 ( 13,200)Benefits paid ( 12,703) ( 12,217)Settlements - -Other adjustments 1,598 -At 31 December 418,784 374,215

The movement in fair value of plan assets is as follows:

At 01 January 320,789 291,729Interest income 21,614 21,517Employer’s contribution 11,294 11,998Scheme expenses ( 2,000) ( 621)Cost of insuring risk benefits - ( 1,321)Actuarial (losses)/gains ( 575) 9,704Benefits paid ( 12,703) ( 12,217)Settlements - -Other adjustments 39 -At 31 December 338,458 320,789

Analysis of amount recognised in other comprehensive income

(Losses)/gains on pension scheme assets ( 575) 9,704Experience (losses)/gains on the liabilities ( 30,533) 13,200Actuarial (losses)/gains recognised in other comprehensive income ( 31,108) 22,904

Cumulative actuarial gains/(losses) at the end of the year

Cumulative actuarial losses at start of year ( 117,687) ( 140,591)Actuarial (losses)/gains recognised during year ( 31,108) 22,904

Cumulative actuarial losses at end of year ( 148,795) ( 117,687)

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





Sensitivity analysis

The sensitivity of the defined benefit obligation to changes in the weighted principal assumption have been determined based on sensibly possible changes of the discount rate or salary increase rate occurring at the end of the reporting period if all other assumptions remained unchanged and are as follows :

Impact on defined benefit obligation Change in Decrease in Increase in Assumption Assumption Assumption Discount rate 0.5% Increase by 8.2% Decrease by 7.3%Future long term salary assumption 0.5% Decrease by 2.6% Increase by 2.7%

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the pension liability recognised within the statement of financial position.

The methods and types of assumptions used in preparing the sensitivity analyses did not change compared to the previous period.

Through its defined benefit pension plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

Asset volatilityThe plan liabilities are calculated using a discount rate set with reference to corporate bond yields; if plan assets underperform this yield, this will create a deficit. The plan holds a significant proportion of equities, which are expected to outperform corporate bonds in the long-term while providing volatility and risk in the short-term. As the plans mature, the Company intends to reduce the level of investment risk by investing more in assets that better match the liabilities.

Changes in bond yieldsA decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans’ bond holdings.

Inflation riskThere are some of the Company’s pension obligations which are linked to inflation, and higher inflation will lead to higher liabilities (although, in most cases, caps on the level of inflationary increases are in place to protect the plan against extreme inflation). The majority of the plan’s assets are either unaffected by (fixed interest bonds) or loosely correlated with (equities) inflation, meaning that an increase in inflation will also increase the deficit.

Life expectancyThe majority of the plans’ obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plans’ liabilities. This is particularly significant in the plan, where inflationary increases result in higher sensitivity to changes in life expectancy.


None of the plan assets are invested in shares of the Company or in property used by the Company.

Mortality rate

Assumptions regarding future mortality experience are set based on actuarial advice in accordance with published statistics and experience. The average life expectancy in years of a pensioner retiring at age 60 on the reporting date is as follows:

2016 2015 Male 21 21Female 24 24 The average life expectancy in years of a pensioner retiring at age 60, 15 years after the reporting date is as follows:

2016 2015 Male 21 21Female 24 24

2016 2015 Rs’000 Rs’000

At 31 December: Present value of defined benefit obligations 418,784 374,215Fair value of plan assets 338,458 320,789Deficit 80,326 53,426Experience adjustments on plan liabilities 30,533 ( 13,200)Experience adjustments on plan assets ( 575) 9,704

Plan assets




25 DIvIDenDs

The Company declared the following dividends during the year. 2016 2015 Rs’000 Rs’000 Rs 1.90 per ordinary share (2015 - Rs Nil) 55,712 -Rs 3.00 per ordinary share (2015 - Rs 2.90) 87,967 85,035 143,679 85,035

The dividend of Rs 1.90 declared in 2016 represents the final dividend in respect of the financial year ended 31 December 2015. The dividend of Rs 3.00 declared in 2016 represents the interim dividend in relation to the financial year ended 31 December 2016.

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

The future aggregate minimum lease payments under non-cancellable motor vehicle leases are as follows:

2016 2015 Rs’000 Rs’000 Within 1 year 9,609 12,787Between 1 and 5 years 24,299 28,056After five years 26,994 24,308 The future aggregate minimum lease payments under non-cancellable leasehold land leases are as follows: 2016 2015 Rs’000 Rs’000 Within 1 year 7,424 6,977Between 1 and 5 years 24,818 21,722After five years 90,151 88,899

26 OPeRaTInG Leases

22 TRaDe anD OTHeR PayaBLes

2016 2015 Rs’000 Rs’000 Trade payables 1,197,502 1,043,199Payable to related parties (Note 28 (vii)) 30,492 30,693Other payables and accruals 111,273 122,064 1,339,267 1,195,956

2016 2015 Rs’000 Rs’000 At 01 January 322,134 294,499Deposits – net 21,909 27,635At 31 December 344,043 322,134

Cash, cash equivalents and bank overdrafts include the following for the purposes of the cash flow statement.

2016 2015 Rs’000 Rs’000 Cash and cash equivalents 397,785 67,664Bank overdrafts - ( 98,935) 397,785 ( 31,271) Bank overdrafts are repayable on demand and bear average interest rates of 5.26% annually (2015 - 5.36% annually).

23 DePOsITs On LPG CyLInDeRs

24 CasH, CasH equIvaLenTs anD BanK OveRDRaFTs




28 ReLaTeD PaRTy TRansaCTIOns (COnTInueD)

2016 2015 Rs’000 Rs’000 (ii) Sales of goods and services (a) Sales of goods to fellow subsidiary: Vitol Aviation (fuels) 143,785 323,689 Vivo Energy Uganda (seals) 358 893 Société Malgache des Pétroles Vivo Energy (lubricants) - 51 Vivo Energy Burkina (lubricants) - 16 144,143 324,649 (b) Sales of services: Energy Storage Company Ltd (joint venture) (management services) 3,000 3,000 Energy Storage Company Ltd (joint venture) (rent) 2,321 288 Vivo Energy Indian Ocean Holdings (management services) (fellow subsidiary) 1,448 1,294 6,769 4,582

The above transactions were carried out on normal commercial terms and conditions.

(iii) Key management personnel (including full time directors) 2016 2015 Number Number Shares held in the Company - Directly - - - Indirectly - - - -

2016 2015 Rs’000 Rs’000 Emoluments 37,347 36,263Post employment benefits 5,552 5,445 42,899 41,708

27 COnTInGenT LIaBILITIes

At 31 December 2016, the Company had no contingent liabilities (31 December 2015 – Rs 35,292,000) following a positive outcome in the case of one-off receipt of sale of economic rights in the Shell trademark in 2008.

At 31 December 2016, the Company is controlled by Vivo Energy Mauritius Holdings BV which owns 77.15% of the Company’s shares. The remaining 22.85% of the shares are widely held and are listed on the Stock Exchange of Mauritius. The intermediate and ultimate parents of the Company are Vivo Energy Holding BV and HV Investments BV, companies based in Netherlands. Fellow subsidiaries are entities which are controlled by the ultimate parent directly or indirectly through one or more intermediaries. Associates are entities in which the Company has significant influence but which it does not control. The following transactions were carried out with related parties:

2016 2015 Rs’000 Rs’000

(i) Purchases of goods and services from fellow subsidiaries Purchases of goods: Shell and Vivo Lubricants SA (lubricants freight) 11,375 11,239 Vitol Asia Pte (fuels) 203,003 103,034 Vitol Bahrain E.C. (fuels) 306,204 152,556 Vivo Energy Botswana (additives) - 599 520,582 267,428 Purchases of services: Vivo Energy Africa Services Sàrl 95,347 89,841

The above transaction represents the Company’s share of central service cost for business support services and as per the intra group services agreement (contribution agreement) between Vivo Energy Mauritius Limited and Vivo Energy Africa Services Sàrl (VEAS).

28 ReLaTeD PaRTy TRansaCTIOns




29 THRee yeaR summaRy

2016 2015 2014 Rs’000 Rs’000 Rs’000 Income Statement Sales 9,106,874 10,139,537 12,784,100 Operating profit 372,998 335,434 181,682Finance income 5,732 1,867 677Finance cost ( 5,045) ( 8,097) ( 9,540)Share of profit of joint venture 7,511 10,594 10,679Profit before income tax 381,196 339,798 183,498Income tax expense ( 60,324) ( 57,171) ( 29,167)Profit for the year 320,872 282,627 154,331 Dividends declared per share Rs 4.90 2.90 5.00 Basic and diluted earnings per share 10.94 9.64 5.26

Statement of Comprehensive Income 2016 2015 2014 Rs’000 Rs’000 Rs’000 Profit for the year 320,872 282,627 154,331 Other comprehensive income Items that will not be reclassified to profit or loss Remeasurements of post employment benefit obligations ( 31,108) 22,904 27,541Deferred tax asset/(liability) on remeasurement of post employment benefit obligations 5,288 ( 3,894) ( 4,682)Other comprehensive income for the year ( 25,820) 19,010 22,859Total comprehensive income for the year 295,052 301,637 177,190

28 ReLaTeD PaRTy TRansaCTIOns (COnTInueD)

2016 2015 Rs’000 Rs’000 (iv) Expenses Expenses paid on behalf of fellow subsidiaries: Vivo Energy Investments BV (VEIBV) 21,763 18,328 Vivo Energy South Africa (Pty) Ltd (VESA) - 2,258 Société Malgache des Pétroles Vivo Energy 663 1,212 Vivo Energy Botswana 4,226 1,616 Vivo Energy Kenya 5 - Vivo Energy Maroc 189 - Vivo Energy Uganda 775 734 27,621 24,148 Expenses paid on behalf of Vivo Energy Investments BV (VEIBV) included staff costs of Rs 20,533,000 (2015 – Rs 16,921,000) and were recharged to VEIBV with a mark-up of 7% (2015 – 7%). The other expenses related to the above transactions were reclaimed from the above related companies and invoiced at cost.

(v) Dividends received Energy Storage Company Ltd (joint venture) 15,000 - (vi) Dividends paid Vivo Energy Mauritius Holdings BV (parent) 110,854 65,608 (vii) Outstanding balances Receivable from related parties: Vitol Aviation (fellow subsidiary) - 22,595 Vivo Energy Investments BV (VEIBV) (fellow subsidiary) 4,143 8,621 Energy Storage Company Ltd (joint venture) 368 427 Société Malgache des Pétroles Vivo Energy (fellow subsidiary) 149 262 Vivo Energy Botswana (fellow subsidiary) 155 762 Vivo Energy South Africa (fellow subsidiary) - 1,209 Vivo Energy Uganda (fellow subsidiary) 237 173 Vivo Energy Kenya (fellow subsidiary) 5 - Vivo Energy Maroc (fellow subsidiary) 189 - 5,246 34,049 Payable to related parties: Vivo Energy Africa Services (fellow subsidiary) 29,530 30,044 Shell and Vivo Lubricants SA (fellow subsidiary) 962 607 Vitol Aviation (fellow subsidiary) - 42 30,492 30,693 The amounts receivable from, and payable to related parties are unsecured, interest free and have no fixed repayment terms and approximate their fair values.




30 FInanCIaL InsTRumenTs By CaTeGORy

Loans and receivables 2016 2015 Rs’000 Rs’000 Financial assets Trade and other receivables 753,396 660,504Cash and cash equivalents 397,785 67,664 1,151,181 728,168 At amortised cost 2016 2015 Rs’000 Rs’000

Financial liabilities Bank overdraft - 98,935Trade and other payables 1,339,267 1,195,956Deposit on LPG cylinders 344,043 322,134 1,683,310 1,617,025

31 PaRenT anD uLTImaTe PaRenT COmPanIes At 31 December 2016, the directors consider Vivo Energy Mauritius Holdings B.V. (incorporated in the Netherlands) as the parent company. The intermediate and ultimate parents of the Company are Vivo Energy Holding BV and HV Investments BV, companies based in Netherlands.

32 InCORPORaTIOn anD ReGIsTeReD OFFICe

The Company is incorporated and domiciled in Mauritius as a public company with limited liability. The address of its registered office is Roche Bois, Port Louis.

33 CuRRenCy The financial statements are presented in thousands of Mauritian rupees.

29 THRee yeaR summaRy (COnTInueD)

2016 2015 2014 Rs’000 Rs’000 Rs’000 Statement of financial position ASSETS Non-current assets Property, plant and equipment 1,085,388 1,056,118 908,682Intangible assets 2,237 2,124 -Prepaid operating leases 9,784 10,362 604Investment in joint ventures 39,538 46,402 35,807Other long-term assets 5,990 6,524 11,425 1,142,937 1,121,530 956,518 Current assets Inventories 416,363 619,093 666,951Trade and other receivables 776,162 690,102 1,018,886Cash and cash equivalents 397,785 67,664 55,990Income tax asset - - 3,587 1,590,310 1,376,859 1,745,414Total assets 2,733,247 2,498,389 2,701,932 EQUITY & LIABILITIES Equity Share capital 293,223 293,223 293,223Retained earnings 583,290 431,917 215,315Total equity 876,513 725,140 508,538 LIABILITIES Non-current liabilities Deferred income tax liabilities 71,824 68,701 60,616Retirement benefit obligations 80,326 53,426 81,723 152,150 122,127 142,339 Current liabilities Bank overdrafts - 98,935 416,569Trade and other payables 1,339,267 1,195,956 1,339,987Deposits on LPG cylinders 344,043 322,134 294,499Current income tax liabilities 21,274 34,097 - 1,704,584 1,651,122 2,051,055Total liabilities 1,856,734 1,773,249 2,193,394Total equity and liabilities 2,733,247 2,498,389 2,701,932

Notice is hereby given that the Annual Meeting of Shareholders of Vivo Energy Mauritius Limited (‘the Company’) will be held at Labourdonnais Waterfront Hotel, Caudan Waterfront, Port Louis on Friday 12 May 2017 at 14.00 hours to transact the following business:

1. To adopt the minutes of proceedings of the last Annual Meeting of Shareholders held on 13 May 2016.

ORDINARY RESOLUTION I

“Resolved that the minutes be adopted as true proceedings of the meeting.”

2. To consider the Annual Report 2016 of the Company.

3. To receive the report of Messrs PricewaterhouseCoopers, the auditors of the Company.

4. To consider and approve the Audited Financial Statements of the Company for the year ended 31 December 2016.

ORDINARY RESOLUTION II

“Resolved that the Audited Financial Statements of the Company for the year ended 31 December 2016 be hereby approved.”

5. To re-elect as Director of the Company Mr Christian Georges CHAMMAS who retires by rotation and, being eligible, offers himself for re-election in accordance with the Constitution of the Company.

ORDINARY RESOLUTION III

“Resolved that Mr Christian Georges CHAMMAS be hereby re-elected as Director of the Company.”

6. To re-elect as Director of the Company Mr Jean Noel Patrick CRIGHTON who retires by rotation and, being eligible, offers himself for re-election in accordance with the Constitution of the Company.

ORDINARY RESOLUTION IV

“Resolved that Mr Jean Noel Patrick CRIGHTON be hereby re-elected as Director of the Company.”

7. To re-elect Mr Timothy TAYLOR retiring under Section 138(6) of the Companies Act 2001 as Company Director to hold office from the date of this Annual Meeting of Shareholders until the next Annual Meeting of Shareholders of the Company.

ORDINARY RESOLUTION V

“Resolved that Mr Timothy TAYLOR be hereby re-elected as Director of the Company.”

8. To re-elect Mr Mr Kim Foong LEUNG SHIN CHEUNG who retires by rotation in accordance with the Constitution of the Company and with Section 138 (6) of the Companies Act 2001.

ORDINARY RESOLUTION VI

“Resolved that Mr Kim Foong LEUNG SHIN CHEUNG be hereby re-elected as Director of the Company.”

nOTICe OF meeTInG OF sHaReHOLDeRs

BLanK PaGe

Note:: A member not being able to attend and vote at the meeting is entitled to appoint a proxy to attend and vote on his behalf. The proxy need not be a member. Proxy forms duly signed should reach the registered office of the Company at least FORTY-EIGHT hours before the holding of the meeting. Shell trademarks used under license

9. To elect Mr David Muraguri MURIITHI as Director of the Company

ORDINARY RESOLUTION VII

“Resolved that Mr David Muraguri MURIITHI be hereby elected as Director of the Company.”

10. To take note of the automatic reappointment of Messrs PricewaterhouseCoopers as auditors of the Company and to authorise the Board to fix their remuneration for the financial year ending 31 December 2017.

ORDINARY RESOLUTION VIII

“Resolved that the Board of Directors of the Company be hereby authorized to fix the remuneration of Messrs PricewaterhouseCoopers, the auditors of the Company for the financial year ending 31 December 2017.”

By order of the Board

Executive Services LimitedPer Christian AngseesingSecretary

Shell trademarks used under license

Note:: A member not being able to attend and vote at the meeting is entitled to appoint a proxy to attend and vote on his behalf. The proxy need not be a member. Proxy forms duly signed should reach the registered office of the Company at least FORTY-EIGHT hours before the holding of the meeting.

nOTICe OF meeTInG OF sHaReHOLDeRs

Note:: 1. A member of the Company entitled to attend and vote at this meeting may appoint a proxy of his own choice (whether a member or not) to attend and vote on his behalf. 2. Please mark in the appropriate box how you wish to vote. If no specific direction as to voting is given, the proxy will exercise his discretion as to how he/she votes. 3. Proxy forms duly signed should reach the registered office of the Company at least FORTY-EIGHT hours before the holding of the meeting or else the instrument of proxy should not be treated as valid. Shell trademarks used under license

I/Weofbeing a member/members of the abovenamed Company, hereby appointof or failing him/her of as my/our proxy to vote for me/us and on my/our behalf at the Annual Meeting of Shareholders of the Company, to be held on the 12 May 2017 and at any adjournment thereof.

I/We desire my/our vote(s) to be cast on the Resolutions as follows:

RESOLUTIONS For Against AbstainI Resolved that the minutes be adopted as true proceedings of the meeting.II Resolved that the Audited Financial Statements of the Company for the year ended 31 December 2016 be hereby approved.III Resolved that Mr Christian Georges CHAMMAS be hereby re-elected as Director of the CompanyIV Resolved that Mr Jean Noel Patrick CRIGHTON be hereby re-elected as Director of the CompanyV Resolved that Mr Timothy TAYLOR be hereby re-elected as Director of the CompanyVI Resolved that Mr Kim Foong LEUNG SHIN CHEUNG be hereby re-elected as Director of the CompanyVII Resolved that Mr David Muraguri MURIITHI be hereby elected as Director of the CompanyVIII Resolved that the Board of Directors of the Company be hereby authorized to fix the remuneration of Messrs PricewaterhouseCoopers, the auditors of the Company, for the financial year ending 31 December 2017.

Signed this day of

Signature

PROxy FORm

BLanK PaGe

C

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Y

CM

MY

CY

CMY

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