TROPICAL PARADISE CO. LTD

Transcription

1 TROPICAL PARADISE CO. LTD Incorporated in Mauritius as a public company on December 12, 1994 Business Registration Number: C Registered office: Food & Allied Group Headquarters, Gentilly, Moka Tel: FURTHER ADMISSION DOCUMENT IN RESPECT OF A proposed rights issue of 20,000,000 ordinary shares of no par value of Tropical Paradise Co. Ltd ( TPCL ) at an issue price of Rs. 6.25, amounting to Rs. 125,000,000 in a proportion of eight (8) new ordinary shares for every forty nine (49) ordinary shares held at the close of business on April 29, This document serves as a Further Admission Document, as defined in the Rules of the Development and Enterprise Market ( DEM ) companies (the DEM Rules ) of the Stock Exchange of Mauritius Ltd ( SEM ) and includes information given in compliance with the relevant sections of the DEM Rules with respect to the proposed rights issue of 20,000,000 ordinary shares by TPCL. The shares to be offered have been granted approval on 17 March 2015 by the Listing Executive Committee of the SEM with regards to their admission to listing on the DEM (subject to shareholders approval). This document is important and requires your immediate attention. This document is neither an invitation nor a prospectus nor a statement in lieu of a prospectus for the public in Mauritius or elsewhere to subscribe for shares in TPCL. If you are in any doubt about the action you should take, you should consult your financial advisor, your investment dealer or any independent advisor immediately. Date this document has been approved by the Listing Executive Committee: 17 March 2015 Further Admission Document No: LEC/R/01/2015 Ordinary shares ISIN number MU The proposed rights issue will be subject to shareholders approval at a special meeting to be held on April 10, DISCLAIMER Neither the Listing Executive Committee ( LEC ) of The Stock Exchange of Mauritius Ltd ( SEM ) nor the SEM, nor the Financial Services Commission ( FSC ) assumes any responsibility for the contents of this document. The LEC, the SEM and the FSC make no representation as to the accuracy or completeness of any of the statements made or opinions or reports expressed in this document and expressly disclaim any liability whatsoever for any loss arising from or in reliance upon the whole or any part of this document.

2 The SEM, the LEC and the FSC do not vouch for the financial soundness of the Company or for the correctness of any statements made or opinions expressed with regard to it. A copy of this Further Admission Document has been filed with the FSC.

3 DIRECTORS DECLARATION The directors of TPCL, whose names appear in section 3, collectively and individually accept full responsibility for the accuracy of the information contained in this Further Admission Document and confirm having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading. The directors further declare, that to the best of their knowledge and belief, the Further Admission Document complies, where applicable, with the DEM Rules, the Companies Act 2001, the Securities Act 2005 and any Rules or Regulations made under these Acts. A copy of this Further Admission Document and all relevant statutory documents of TPCL, have been filed with the FSC. The Board of Directors (the Board ) of TPCL hereby states that: a) there has been no material adverse change in the financial or trading position of TPCL since the latest interim published statements ended December 31, 2014; b) no changes are anticipated in the nature of the business of TPCL; and c) the working capital available to TPCL is sufficient for the running of the business for the next 12 months from the date of this document. Approved by the Board of Tropical Paradise Co Ltd on, 2015 and signed on its behalf by [Name of Director] [Date] [Name of Director]..

4 DOCUMENTS FOR INSPECTION The following documents may be inspected during normal working hours at the registered office of TPCL at Food & Allied Group Headquarters, Gentilly, Moka: (a) The constitution of TPCL; (b) The original Further Admission Document; (c) Consents of persons named in this Further Admission Document to act in their respective capacities; (d) The audited financial statements of TPCL for the financial year ended June 30, 2014; and (e) The unaudited financial statements of TPCL for the six months ended December 31,2014.

5 SALIENT FEATURES OF THE RIGHTS ISSUE New Ordinary Shares Purpose of the Issue Terms of the Issue Listing of the New Ordinary Shares New ordinary shares of no par value of TPCL ranking pari passu with the existing ordinary shares. Re-furbishment of Le Labourdonnais Waterfront Hotel and financing of other capital expenditures requirements. Proposed rights issue of 20,000,000 New Ordinary Shares of no par value of TPCL at an issue price of Rs 6.25 in a proportion of eight (8) New Ordinary Shares for every forty nine (49) ordinary shares registered in the names of the shareholders at the close of business on April 29, Fully paid New Ordinary Shares will be listed and traded on the Development and Enterprise Market of the SEM as from June 19, The Listing Executive Committee of the SEM has, on 17 March 2015, approved the listing of the New Ordinary Shares. Amount to be raised under the Rights Issue Rs. 125,000,000 Underwriter MCB Stockbrokers Ltd, a company registered under the laws of Mauritius and having its registered address 9 th Floor, MCB Centre, 9-15 Sir William Newton Street Port Louis and bearing registration number C Opening of rights subscription May 14, 2015 Closing of rights subscription June 05, 2015 Issue date June 15, 2015 Payment terms Payable on June 05, 2015 at latest.

6 TABLE OF CONTENTS DEFINITIONS EXECUTIVE SUMMARY PURPOSE OF THE RIGHTS ISSUE USE OF PROCEEDS TERMS OF THE RIGHTS ISSUE BOARD APPROVAL BACKGROUND INFORMATION ABOUT TPCL AND ITS SUBSIDIARY Le Labourdonnais Waterfront Hotel Le Suffren Hotel & Marina The Hennessy Park Hotel The Address Boutique Hotel RATIONALE BEHIND THE RIGHTS ISSUE Re-furbishment of Le Labourdonnais Waterfront Hotel (Rs. 85 Million) Financing of expected capital expenditures (Rs. 40 Million) CORPORATE INFORMATION ON TPCL DIRECTORATE DIRECTORS INTERESTS OTHER CORPORATE INFORMATION SUBSTANTIAL SHAREHOLDERS SHARE CAPITAL RIGHTS ATTACHED TO THE SHARES AGGREGATE REMUNERATION MATERIAL CONTRACTS LEGAL AND ARBITRATION PROCEEDINGS LEGAL AND COMMERCIAL NAME EXTRACT FROM THE CONSTITUTION NUMBER OF EMPLOYEES RISKS FACTORS DIVIDEND POLICY TERMS OF THE PROPOSED TRANSACTION DILUTION IMPACT AND SHARES IN PUBLIC HANDS ISSUE PRICE FOR NEW ORDINARY SHARES TERMS OF THE RIGHTS ISSUE Acceptance Application for excess ordinary shares Underwriter Unsubscribed shares Share fractions Sale of rights Transfer of rights... 18

7 4.3.8 Terms of payments Allotment of shares SHARES ISSUED COSTS ASSOCIATED WITH THE RIGHTS ISSUE TIME TABLE THEORETICAL EX-RIGHTS PRICE FINANCIAL INFORMATION ON TPCL UNAUDITED CONDENSED FINANCIAL STATEMENT FOR THE 6 MONTHS ENDED DECEMBER 31, 2014 OF TPCL AND ITS SUBSIDIARY Unaudited condensed statement of comprehensive income Unaudited condensed statement of financial position Unaudited condensed statement of cash flows Unaudited condensed statement of changes in equity FINANCIAL STATEMENTS FOR THE YEARS ENDED JUNE 30, 2014 AND JUNE 30, 2013 OF TPCL AND ITS SUBSIDIARY Statements of comprehensive income Statements of financial position Statements of cash flows Statements of changes in equity Borrowings Dividends Contingent Liabilities LIST OF INVESTMENT DEALERS APPLICATION GUIDE AUDITORS REPORT... 31

8 DEFINITIONS Definitions Act Board CDS DEM FAD New Ordinary Shares Ordinary Shares Rights Issue Rs. SEM The Group TPCL/the Company The Proposed Transaction Transaction Adviser Underwriter Details The Companies Act 2001, as may be amended from time to time The Board of Directors of TPCL Central Depositary and Settlement Co Ltd The Development and Enterprise Market of the SEM This Further Admission Document prepared for the purpose of the proposed rights issue pursuant to the rules for DEM companies New ordinary shares of Rs each ranking pari passu with the existing Ordinary Shares in the capital of TPCL Ordinary shares of no par value in the capital of TPCL The proposed rights issue of 20,000,000 New Ordinary Shares of no par value at an issue price of Rs.6.25 each to the shareholders of TPCL as particularised in this FAD Mauritian Rupees The Stock Exchange of Mauritius Ltd, established under the repealed Stock Exchange Act 1988 and governed by the Securities Act 2005 as amended TPCL and its subsidiary company, Triamad Co Ltd Tropical Paradise Co. Ltd The Rights Issue BDO & Co MCB Stockbrokers Ltd 1

9 1 EXECUTIVE SUMMARY 1.1 Purpose of the Rights Issue The main purpose of the Rights Issue is to finance the refurbishment of the Labourdonnais Waterfront Hotel with a view to offer a unique experience with a complete re-looking of the public areas and the introduction of an Executive Floor. It will also be used to reduce current borrowings of the Group to facilitate the financing of expected capital expenditures. 1.2 Use of Proceeds The expected amount to be raised is Rs. 125,000,000 to be used as follow: Hotels refurbishment 85,000,000 Re-financing of current debts in view of future capital expenditures 40,000,000 Total 125,000,000 Rs. 1.3 Terms of the Rights Issue The Rights Issue of 20,000,000 New Ordinary Shares of no par value of TPCL at an issue price of Rs in a proportion of eight (8) New Ordinary Shares for every forty nine (49) Ordinary Shares held at the close of business on April 29, Board approval The Board has approved the terms of the issue by written resolution dated March 13,

10 2 BACKGROUND 2.1 Information about TPCL and its subsidiary TPCL is a hotel company listed on DEM. The Company was incorporated in 1994 and developed Le Labourdonnais Waterfront Hotel, the first 5-star business city hotel in Mauritius which is regarded as a reference in the local hospitality industry and a landmark in the capital, Port Louis. Following the success of Le Labourdonnais Waterfront Hotel and with the objective of targeting a new market segment, TPCL opened a second hotel in 2004 on the prime waterfront location, Le Suffren Hotel & Marina, to satisfy the needs of the modern day business travellers, and provide comfortable accommodation in the vibrant surroundings of the waterfront at an affordable price. With the objective to further enhance the market position of the Company and consolidate its offer to the business community, TPCL has acquired, through its wholly owned subsidiary, Triamad Co Ltd, a four star hotel in Ebene, currently operating under the commercial name "The Hennessy Park Hotel". Triamad Co Ltd is a private company incorporated in Mauritius on July 8, TPCL also concluded a management contract on April 1, 2013 with Hotel Chambly Ltd for a 42 bedroom hotel, "The Address Boutique Hotel", situated in the Port Chambly village, in the vicinity of Arsenal and Baie du Tombeau Le Labourdonnais Waterfront Hotel Le Labourdonnais Waterfront Hotel is acknowledged as Port-Louis' foremost address for luxurious comfort, high profile conferences and world-class cosmopolitan cuisine. This elegant 5-star hotel is adjacent to the financial and business centre of the city and is within easy reach of convention centres, embassies and major tourist attractions. Le Labourdonnais Waterfront Hotel exudes refinement and exclusivity. With its high standard of services and comfort, Le Labourdonnais Waterfront Hotel combines a subtle blend of timeless elegance with Mauritian art de vivre. The Hotel has a total of 109 guest rooms including 11 luxurious suites. The hotel is ideally situated on the Waterfront in Port Louis, and offers direct access to the exclusive Caudan Waterfront complex, Mauritius' premier commercial and entertainment centre. 3

11 2.1.2 Le Suffren Hotel & Marina Le Suffren Hotel & Marina offers both business travellers and holiday makers a sparkling and dynamic venue, perfect for business and pleasure in a unique nautically themed environment. Le Suffren is perfectly positioned to take full advantage of everything that Mauritius has to offer, whether doing business in the capital, Port Louis, or taking time out to discover the unspoilt beauty of the island. In the quest of meeting increasing expectations from its clients, the hotel has completed, in 2011, an extension to accommodate ten fully serviced hotel apartments and a state of the art wellness centre as well as an exquisite bar The Hennessy Park Hotel Located in the heart of bustling Ebène City, next to Ebène shopping mall, The Hennessy Park Hotel is a modern, innovative and well appointed four star business hotel with an artistic touch. Muted business tones have been replaced with a colour, zest and vibrancy designed to reflect the needs of a new generation of creative entrepreneurs The Address Boutique Hotel The hotel was refurbished in and reopened on February 20, The hotel concept was completely reviewed with a new look and feel. A number of food and beverage concepts were introduced including the Izumi Japanese restaurant offering Teppanyaki tables, a sushi bar and two tatami private rooms as well as the terrace overlooking the estuary. For the well being of our guests, Ispa was introduced at The Address Boutique Hotel with a new gym to enhance the guest experience. 2.2 Rationale behind the Rights Issue Re-furbishment of Le Labourdonnais Waterfront Hotel (Rs. 85 Million) The objective of the refurbishment is to re-define and upgrade the public areas of the Labourdonnais Waterfront Hotel as well as the restaurants and bar of the hotel with new trendy concepts. The banqueting services will, at the same time, be reviewed to equip the hotel with modern and professional facilities in order to offer a unique experience to our guests. These improvements will enable the hotel to cater for every need of its guests and be recognised as the finest business hotel in the region. The refurbishment will also encompass the implementation of an Executive Floor which will offer additional services dedicated to the Executive Business Travellers. In addition guests residing on this floor will have exclusive access to the Lounge which will provide a comprehensive set of facilities and services. The Presidential Suite will also undergo a 4

12 refurbishment and additional space will be made available as well as an inter-leading room enabling our guests to relax or entertain in grand style in superbly appointed living and dining areas Financing of expected capital expenditures (Rs. 40 Million) The remaining funds from the Rights Issue will be used to assist with the financing of the expected capital expenditures over the coming years. These expenditures include the refurbishment of the rooms at the Hennessy Park Hotel as well as the installation of energy efficient systems to enable a reduction of the operating costs at Le Labourdonnais Waterfront Hotel. In the immediate future, those funds will be used to reduce current borrowings of the Group and then ultimately facilitate the financing of expected capital expenditures over the next two financial years. 3 CORPORATE INFORMATION ON TPCL 3.1 Directorate Michel Doger de Spéville, C.B.E. (Chairman) Born in 1937, Mr. Michel Doger de Spéville is the founder and Executive Chairman of the Food & Allied Group. He is also the founder and Senator of the JCI Mauritius, past president of The Mauritius Chamber of Commerce and Industry and conferred Honorary Fellow by the University of Mauritius for his contribution to the development of the Agro-Industry in Mauritius. Mr. Michel Doger de Spéville is the Chairman on the Board of Directors of various companies of the Food & Allied Group of Companies. He is also a board member of Les Moulins de la Concorde Ltée, Livestock Feed Limited and Fincorp Investment Ltd. Jean-Paul Chasteau de Balyon Born in 1950, Fellow Member of the Mauritius Institute of Directors. Jean Paul Chasteau de Balyon has retired on July 01, 2012 as Company Secretary and Director of Swan Group Corporate Services Limited. Before his retirement, he was a Council Member of the Mauritius Chamber of Commerce and Industry (Member of its Nomination and Remuneration Committee), Member of the Consultative Committee of the Stock Exchange of Mauritius Ltd., Chairperson of the sub-committee of the Insurers 5

13 Association on issues linked to the World Trade Organisation (WTO). Mr. Chasteau is still a Director of Companies in the manufacturing and commercial sectors and is a member of the Board of Governors of the MCCI Business School. He was appointed on the board of TPCL on 29 March Cédric Doger de Spéville Born in 1979, obtained a Maîtrise en économie from University of Paris I Panthéon Sorbonne in He also completed an Msc in Accounting and Finance at the London School of Economics in 2002 and obtained a Master in Business Administration from Columbia Business School in He was Consultant for COFINTER in Paris from 2002 to 2003 and joined the Food & Allied Group in In January 2013, Cédric de Spéville was appointed Group Chief Executive Officer. He is director on various companies of the Food & Allied Group. He is a former President of the Mauritius Chamber of Commerce and Industry. He was appointed to the Board of TPCL on August16, Directorship in listed companies: Les Moulins de la Concorde Ltée, Livestock Feed Limited, Mauritius Freeport Development Co Ltd, Forward Investment and Development Enterprises Ltd. Hector Espitalier-Noël Born in 1958, Mr. Hector Espitalier-Noël is a member of the Institute of Chartered Accountants in England and Wales. He worked with Coopers and Lybrand in London and with De Chazal du Mée in Mauritius. He is presently the Chief Executive of ENL Limited. He is also Chairman of New Mauritius Hotels, Bel Ombre Sugar Estate Ltd and CIM Financial Services Ltd as well as being a Director of several companies listed on the Stock Exchange of Mauritius Ltd. He was also the President of Rogers and Company Ltd, the Mauritius Chamber of Agriculture, the Mauritius Sugar Producers Association and the Mauritius Sugar Syndicate. Mr. Hector Espitalier-Noël was appointed director on the Board of TPCL on May 31, Directorship in listed companies: ENL Commercial Limited, ENL Investment Limited, ENL Ltd, New Mauritius Hotels Ltd, Rogers and Co Ltd, ENL Land Ltd, The Anglo Mauritius Assurance Society Ltd and Swan Insurance Co Ltd. Charles Philippe de Bragard Hardy Born in 1972, founding member and Managing Director of DMH Associates. He has a very diversified exposure to finance having held various roles spanning investment management, business development, corporate 6

14 planning and transaction advisory. He is the leading partner of DMH Associates s corporate finance advisory services having coordinated and advised on several capital structuring as well as mergers and acquisitions transactions across many industries in the past 10 years, with a particular expertise in dealing with family held enterprises and owner managed businesses of all sizes. Mr de Bragard Hardy holds an honours degree in Mathematics and Financial Management and is an Associate of the Royal College of Science of London through the Imperial College of Science, Technology & Medicine. He acts as a director on several public and private companies, chairing audit committees in various instances. Mr de Bragard Hardy was appointed director of TPCL on February 14, Directorship in listed companies: Plastic Industry (Mauritius) Ltd. René Leclézio Born in 1956, holder of a BSc (Chemical Engineering) from Imperial College, London, and an MBA from the London Business School. Mr. Leclézio was appointed director of TPCL on December 12, Before being appointed CEO of Promotion and Development in 1987, he worked in London as consultant engineer in the oil and gas industry and with Lloyds Merchant Bank as Assistant Manager in Project Finance. Directorship in listed companies: Anglo Mauritius Assurance Society Ltd, Caudan Development Limited, Excelsior United Development Co Ltd, Mauritius Freeport Development Co Ltd, Promotion and Development Ltd, and Swan Insurance Co Ltd. Pierre-Yves Pougnet Born in 1942, accountant by profession, Mr. Pierre-Yves Pougnet is the Executive Vice Chairman of the Food & Allied Group of Companies. He was appointed to the Board of TPCL on December 12, Mr. Pougnet also sits on the Board of P.O.L.I.C.Y. Limited, Livestock Feed Limited, Avipro Co Ltd, and Les Moulins de la Concorde Ltée. Louis Rivalland Born in 1971, Mr. Louis Rivalland was appointed to the Board of TPCL on 4 October He is currently the Group Chief Executive of Swan Insurance and Anglo-Mauritius Assurance. He was previously part of the management team of Commercial Union in South Africa and conducted several assignments for Commercial Union in Europe. He then worked as Actuary and Consultant for Watson Wyatt in Johannesburg. 7

15 He was the President of the Joint Economic Council and the Insurers Association of Mauritius. He has played an active role in the development of risk management, insurance and pensions in Mauritius having chaired or been part of various technical committees on these areas. He holds a BSc (Hons) in Actuarial Science and Statistics, and is a Fellow of the Institute of Actuaries, UK. Directorship in listed companies: Air Mauritius Ltd, Constance Hotels Services Ltd, ENL Commercial Ltd, ENL Land Ltd, Hotelest Ltd, Ireland Blyth Ltd, New Mauritius Hotels Ltd, Swan Insurance Co Ltd, The Anglo- Mauritius Assurance Society Ltd. Rolph Schmid Born in 1962, Qualified Chef, holder of a Hotel School diploma and a Business School Certificate. During his career he worked for a number of hotel groups such as Swiss hotels, Hyatt International, Beachcomber hotels and was General Manager for Southern Sun hotels before joining the Labourdonnais Waterfront Hotel and was appointed in 2004, as General Manager of Labourdonnais Waterfront Hotel and Le Suffren Hotel & Marina. Since 2011, he was nominated as Managing Director of both TPCL and Triamad Co. Ltd trading as the Hennessy Park Hotel. In 2013, he was assigned one additional hotel portfolio: Hotel Chambly trading as The Address Boutique Hotel. Alternate Directors Noël Eynaud (*Alternate to Michel de Spéville, C.B.E.) Born in 1940, Accountant by profession, is a Director of Management and Development Company Limited. He was appointed to the Board of TPCL on December 14, 2006 as alternate director to Mr. Michel de Spéville and is a member of the Audit & Risk Committee. Mr. Eynaud also sits on the Board of Avipro Co Ltd and is alternate Director on the Board of Livestock Feed Limited. Eric Espitalier-Noël (*Alternate to Hector Espitalier-Noël) Born in 1959, holds a Bachelor s degree in Social Sciences and an MBA. He is currently the Chief Executive Officer of ENL Commercial Limited. He was appointed to the Board of TPCL on June 14, Directorship in listed companies: Automatic Systems Ltd, ENL Commercial Ltd, ENL Investment Limited, ENL Land Ltd, ENL Limited, Les Moulins de la Concorde Ltée, Livestock Feed Limited and Rogers & Co Ltd 8

16 3.2 Directors interests The table below shows the interests of the Directors of TPCL in ordinary and preference shares of the Company as at June 30, No. DIRECTORS Direct Shareholding % Indirect Shareholding % Ord Pref Ord Pref Number of Directorship in Listed Companies 1 Jean-Paul Chasteau de Balyon Michel de Spéville, C.B.E Cédric de Spéville Hector Espitalier-Noël Philippe de Bragard Hardy (as from ) René Leclézio Pierre-Yves Pougnet Louis Rivalland Rolph Schmid ALTERNATE DIRECTORS 1 Noël Eynaud (Alt. to Michel de Spéville) 2 Eric Espitalier-Noël (Alt. to Hector Espitalier-Noël)

17 3.3 Other corporate information The table below provides other corporate information on TPCL. Corporate Information Name Address Company Secretary Share Registry Management company Auditors & financial advisors BDO & Co Bankers M & D Secretarial Services Ltd Management & Development Corporate Services Ltd Food & Allied Group Headquarters, Gentilly, Moka Food & Allied Group Headquarters, Gentilly, Moka Indigo Hotels & Resorts Ltd Food & Allied Group Headquarters, Gentilly, Moka The Mauritius Commercial Bank Ltd 10, Frère Félix de Valois Street, Port-Louis 9-15, Sir William Newton Street, Port Louis The Hongkong and Shanghai Banking Corporation Limited 4F HSBC Centre, 18 Cybercity, Ebene State Bank of Mauritius Ltd State Bank Tower 1 Elizabeth II Avenue Port-Louis Legal advisor Patrice de Spéville, S.C. Chancery House, Port Louis Notary Jean-Pierre Montocchio Labama House, Port Louis 3.4 Substantial shareholders Shareholders owning more than 5% of the shares of TPCL as at June 30, 2014 were as follows: Shareholders No of Ordinary Shares Percentage Indigo Hotels & Resorts Ltd 54,154, % ENL Investment Limited 16,380, % Promotion & Development Co Ltd 14,700, % The Anglo-Mauritius Assurance Society Limited 14,384, % 10

18 3.5 Share capital As at June 30, 2014 the issued share capital of TPCL was Rs billion made up of: 122,500,000 fully paid ordinary shares of no par value; and 750,000 16% preference shares of Rs. 100 each out of which 8% is cumulative. Following the Rights Issue, the capital structure of TPCL would be as follows: Pertaining to ordinary shareholders Pertaining to preference shareholders No of Ordinary Shares Ordinary Share Capital Preference Share Capital Total Units. Rs. Rs. Rs. At June 30, ,500, ,125,000 75,000,000 1,028,125,000 Rights Issue 20,000, ,000, ,000,000 Total 142,500,000 1,078,125,000 75,000,000 1,153,125, Rights attached to the shares Each of the existing Ordinary Share confers upon its holder the rights set out in Section 46(2) of The Act together with any other rights conferred by the constitution of the Company. The rights conferred by Section 5.2 of the constitution of the Company are the following: I. The right to one vote on a poll at a meeting of the Company on any resolution; II. The right to an equal share in dividends authorised by the Board; and III. The right to an equal share in the distribution of surplus assets of the Company. Rights of Preference Shares (as per section of the constitution) Preference shareholders have the right to a fixed preferential cumulative dividend at the rate of 8% per annum and a fixed preferential non cumulative dividend at the rate of 8% per annum. Preference shareholders have no right: (i) to any further participation in the profits and/or assets of the Company in case of winding up except for any arrears on the cumulative preferential dividend, and (ii) to 11

19 receive notice of, or attend or vote at the General Meetings of the Company. 3.7 Aggregate remuneration Remuneration and benefits received by the non-executive Directors of the Group from TPCL and its subsidiary company for the year ended June 30, 2014 amounted to Rs. 1,257, Material contracts The Company has a management contract with Indigo Hotels & Resorts Limited, a major shareholder, in which three Directors of TPCL have an indirect interest. Indigo Hotels & Resorts Limited, spearheading the hotel activities of the Food & Allied Group of Companies, oversees the performance and strategic development of the individual hotels, ensuring the cohesive sharing of enterprise culture and values throughout the entities. 3.9 Legal and arbitration proceedings There were no legal or arbitration proceedings during the previous 12 months which may have, or have had in the recent past significant effects on the Company's financial position or profitability Legal and commercial name TPCL operates under the commercial names of Le Labourdonnais Waterfront Hotel and Le Suffren Hotel & Marina. Triamad Co Ltd presently operates under the commercial name of The Hennessy Park Hotel. Hotel Chambly Ltd presently operates under the commercial name of The Address Boutique Hotel" Extract from the constitution The objects of The Company are to set up and manage hotels, restaurants, shops, casinos and other activities, which can be carried on in connection therewith (Section of the constitution of the Company) Number of employees 12

20 As at June 30, 2014, the number of employees of TPCL was 313, that of Triamad Co Ltd was 161 and that of Hotel Chambly Ltd was Risks factors Investing in any business comprises risks. The risks relevant to TPCL are listed below: (i) Political And Economic Development Risks TPCL is dependent on the state of the economy and consequently on the Government s policies implemented to enhance the economic conditions. TPCL is also indirectly impacted by the condition of the tourism industry which is dependant upon the Government s strategies relating to the promotion for this sector and air access policy. (ii) Hotel Industry Demand And Supply Cycle Risks TPCL faces the risks of fluctuating demand and increasing room supply in the hotel industry in Mauritius. The general economic uncertainties in the world, particularly in Europe, has had a significant effect on the operations of TPCL due to its dependency on business guests arrivals. The seasonality experienced in the low and high season also affects the financial position of the Company as well as the operations in a context where fixed costs are high. Finally, competition and room overcapacity on the island due to the emergence of new players in the hotel industry, have a material impact of room occupancy and rates. Seeking new and emerging markets to expand its client base as well as diversifying its revenue mix will help TPCL to mitigate this risk. (iii) Human Resources Risks There is a need to find the right people and retain them in a highly competitive market to deliver quality service. TPCL proposes several incentives schemes in order to be regarded as an attractive employer in the hotel sector. A training structure has been implemented and management is currently completing a succession planning for the Group. (iv) Information Systems Risks TPCL is highly dependent on information systems to handle its operations. Disruption of these services might adversely impact operations despite business continuity and disaster recovery processes implemented. Maintenance agreements for all key equipments are effective and regular off site backups are done to prevent information loss. IT audits have been put in place to 13

21 ensure identification and elimination of weaknesses in TPCL systems. (v) Development Risks While the strategy of the Company is to seek growth, the availability of growth opportunities in Mauritius is limited. The Company s operational results might be adversely impacted if new growth strategies are not explored. (vi) Litigation Risks Litigation risks from guests, suppliers, partners, employees and regulatory authorities remain a risk. Insurances are taken by the Company in order to mitigate these risks. (vii) Insurance Risks The Company maintains insurance levels in order to cover the risk profiles of its operations. Inadequate or insufficient insurance could expose TPCL to large claims or loss of capital invested, adversely impacting the financial results. TPCL uses external consultants and reviews its insurance policies on a yearly basis to ensure adequate coverage. (viii) Borrowing And Debt Coverage Risks TPCL depends on its capacity to borrow to meet its expected capital requirements. Inability to repay or failure to comply with debt covenants might affect the Company s ability to contract future loans. TPCL has in place a Financial department that ensures that all debt repayments and compliance clauses are respected. (ix) Financial Risks The Company is exposed to a wide range of financial risks namely: Foreign currency risk/interest rate risk: TPCL holds a small portfolio of foreign currency debt, in respect of which it faces exposure to fluctuations in currency risks as well as interest rate risks. TPCL has maintained a prudential approach to limit its foreign currency risk given the increased volatility registered in the current market. Credit risk: Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract which might result to financial loss. To mitigate such risk, a Credit Committee has been implemented and credit facilities are only given to creditworthy clients of the Company after a thorough check with rating agencies or relevant publicly available financial information. 14

22 Liquidity risk: TPCL is constantly faced with short-term cash flow risk due to its credit/ gearing policies and business fluctuations. In order to mitigate this risk additional overdraft facilities have been negotiated with financial institutions. Cost acceleration risk: Operating and regulatory costs may rise in periods where price adjustments are not feasible thus creating a risk to the Company which might impact on its overall profitatbility Dividend Policy TPCL follows a policy of paying dividends to ordinary shareholders in accordance with its profitability and liquidity and investments requirements. Preference shareholders are subject to the provisions of the Consitution of the Company (as per clause 3.6 of this document). 15

23 - 4 TERMS OF THE PROPOSED TRANSACTION The section below provides information about the securities for which listing is being sought. The Proposed Transaction as referred to above consists of 20,000,000 New Ordinary Shares of no par value of TPCL at an issue price of Rs in a proportion of eight (8) New Ordinary Shares for every forty nine (49) Ordinary Shares registered in their names at the close of business on April 29, TPCL will not issue fractional shares. The number of New Ordinary Shares will be rounded down to the nearest integer when fractions occur. Immediately following the completion of the Rights Issue in accordance with the terms of this FAD, the New Ordinary Shares will rank in all respect pari passu with the Ordinary Shares presently in issue. Fully paid New Ordinary Shares will be listed and traded on the DEM as from June 19, Dilution impact and shares in public hands As a result of the Proposed Transaction, the maximum dilution per share for a shareholder not subscribing to the Rights Issue has been estimated to be 14%. Total number of Ordinary Shares Current 122,500,000 Following Rights Issue 142,500, % 4.2 Issue Price for New Ordinary Shares The Board has applied a discount of approximately 14% on the average trading price of the ordinary shares over the 12 months ended December 31, Average 12 months share price Rs Discount to share price 14% Offer price Rs The Rights Issue price represents a discount of 5% on TPCL s share price (Rs 6.56) as at March 16,

24 4.3 Terms of the Rights Issue Subject to shareholders approval of the Rights Issue, the offer letter, application guide and application forms will, on or about May 08, 2015, be sent to shareholders registered at close of business on April 29, Acceptance Acceptance wholly or partially may only be done by signing Form A or Form E respectively (see section 8). The completed form must be returned with the payment for New Ordinary Shares subscribed to the Company Secretary at Food & Allied Group Headquarters Gentilly, Moka not later than June 05, The acceptance of the Rights Issue is irrevocable and cannot be withdrawn Application for excess ordinary shares Shareholders subscribing in full to the offer may also apply on the same terms and conditions for New Ordinary Shares in excess of their entitlements and should complete Form B (see section 8). The said form must be returned with the payment for excess New Ordinary Shares applied for to the Company Secretary at Food & Allied Group Headquarters, Gentilly, Moka not later than June 05, I. Any New Ordinary Share not subscribed for in terms of the Rights Issue will be allotted by the Board, at their discretion, to applicants for excess New Ordinary Shares on a fair basis, taking into consideration the number of Ordinary Shares held by the applicant and the number of New Ordinary Shares applied for by the applicant; II. Unallocated fractions will be pooled together with any unsubscribed shares to meet application for excess New Ordinary Shares; III. The results of the allocation of the excess New Ordinary Shares (if any) will be notified to the relevant shareholders on June 15, 2015; and IV. No interest will be paid on monies received in respect of applications for excess New Ordinary Shares. Refund cheques in respect of unsuccessful applications will be posted to the shareholders address not later than June 15, Underwriter The underwriter will subscribe for or procure the subscription of all New Ordinary Shares of TPCL issued under the Rights Issue which have not been taken by the shareholders in accordance with the terms of its underwriting agreement which has been signed on February 13,

25 4.3.4 Unsubscribed shares The New Ordinary Shares in respect of which no duly completed and signed forms and/or relevant full payment have been received at the closure of the subscription shall remain under the control of the Board of Directors of TPCL. The latter shall allot them to the Underwriter and/or such persons as the Underwriter may nominate at a price which shall not be less than the subscription price of Rs Share fractions Should the issue of eight (8) New Ordinary Shares for every forty nine (49) Ordinary Shares give rise to share fractions, these shall be rounded down to the nearest share for offer Sale of rights Shareholders who do not wish to subscribe for any of the shares offered may sell their rights by completing and signing Form C (see section 8). This form may then be negotiated through one of the Licensed Stockbroking Companies listed in section 7 and the rights sold on the DEM from May 22, 2015 to May 28, Transfer of rights The rights of a shareholder to subscribe for shares under the Rights Issue may be transferred to a related party by completing Form D (see section 8) in accordance with the instructions contained thereon. The transfer of rights may only be accepted if made between spouses, an ascendant to a descendant, by a société to its members, or by way of succession. A certified true copy of document evidencing such relationship must be submitted together with the duly completed and signed Form D (for example, birth certificate, marriage certificates, Acte de Société, affidavit.) Duly completed and signed Form D must be remitted to one of the Licensed Stockbroking Companies listed in section 7 which will in turn submit the duly completed Form D with the payment to the Company Share Registry, Mangement & Development Corporate Service Ltd, not later than June 05, Terms of payments The Rights Issue will be payable in full on or before June 05, 2015 in ONE instalment. All payments must be made by cheque drawn to the order of TROPICAL PARADISE CO. LTD and crossed. A separate cheque must be submitted, on the same terms described above, for payments in relation to excess New Ordinary Shares applied for. Should a cheque forwarded in payment be dishonoured by the drawer s bank, the application will not be considered. No cash payments will be accepted Allotment of shares 18

26 The allotment of shares will be effected within 10 days of the expiry of the period for the payment of the New Ordinary Shares subscribed. The CDS accounts of all applicants who have been allotted New Ordinary Shares and who have an account at CDS will be credited by June 18, A letter will be sent on June 18, 2015 to confirm the number of shares credited on CDS. Share certificates, in respect of shares allotted to all other shareholders, will be posted to their registered address on June 18, The New Ordinary Shares will be allotted taking into consideration the pre-emptive right of each shareholder and that the shareholding of any shareholder or corporate shareholder acting together in concert shall not exceed 49.99% after the Rights Issue. 4.4 Shares issued The shares will be issued in registered and certificated form. 4.5 Costs associated with the Rights Issue The estimated total cost associated with the Rights Issue is shown in the table below: Rights Issue Costs Rs. Underwriting fees 250,000 Financial Advisor Fees 300,000 Printing Fees 200,000 Others 160,000 Total 910,000 19

27 4.6 Time table DESCRIPTION DATE Special meeting of shareholders First cum rights trading session Last day to deposit share certificates in CDS for first day of trading of rights Last cum rights trading session Shares quoted ex-rights Record date for shareholders entitled to receive offer to subscribe Opening of rights subscription First day to deposit offer letters in CDS for trading of rights Last day to deposit offer letters in CDS for trading of rights First day for trading of rights Last day for trading of rights Closure of rights subscription & due date for payment Allotment of fully paid shares Credit CDS Accounts Sending of allotment letters and share certificates to shareholders First day of trading of fully paid New Ordinary Shares

28 5 THEORETICAL EX-RIGHTS PRICE The theoretical ex-rights price is based on the share price of the Company on January 27, 2015, being the last practicable day prior to the publication of this Further Admission Document to shareholders. Details Rs./Units Last price quoted prior to the issue 7.00 Number of shares in issue net of treasury shares 122,500,000 Market capitalisation prior to the issue 857,500,000 Number of shares to be issued 20,000,000 Value of shares issued 125,000,000 Capitalisation following the issue 982,500,000 Number of shares following the issue of New Ordinary Shares (net 142,500,000 of treasury shares) Theoretical ex-rights price following the issue

29 6 FINANCIAL INFORMATION ON TPCL Inspite of the adverse global economic conditions and challenges facing the hotel industry, TPCL has achieved an increase in occupancy and average room rates resulting in a profit before taxation of Rs million for the year ended June 30, 2014 as compared to Rs million for the year ended June 30, The refurbishment of the Labourdonnais Waterfront Hotel is scheduled to start in May 2015 resulting in the closure of the Hotel for up to two months. This will entail a loss of revenue and hence impact the results for the year ending June 30, Unaudited condensed financial statement for the 6 months ended December 31, 2014 of TPCL and its subsidiary The tables below sets out the unaudited abridged interim financial statements for the six months ended December 31, Unaudited condensed statement of comprehensive income Rs 000's Unaudited Dec 31, 2014 Turnover 298,620 Operating profit 26,434 Net finance costs (18,354) Profit before taxation 8,080 Income tax (1,074) Profit for the year 7,006 Other Comprehensive Income - Total Comprehensive Income 7,006 22

30 6.1.2 Unaudited condensed statement of financial position Rs 000's Unaudited Dec 31, 2014 ASSETS Non-current assets 2,023,301 Current assets 112,948 Total Assets 2,136,250 EQUITY AND LIABILITIES Capital and reserves Share capital 1,028,125 Revaluation and other reserves 464,944 Total equity 1,493,069 Liabilities Non-current liabilities 423,991 Current liabilities 219,190 Total liabilities 643,181 Total equity and liabilities 2,136, Unaudited condensed statement of cash flows Rs 000's Unaudited Dec 31, 2014 Net cash from operating activities 33,862 Net cash used in investing activities (13,375) Net cash generated from financing activities 9,093 Increase in cash and cash equivalents 29,580 Movement in cash and cash equivalent At July 1, (126,626) Increase/(decrease) 29,580 At December 31, (97,046) 23

31 6.1.4 Unaudited condensed statement of changes in equity Rs 000's PERTAINING TO PERTAINING TO ORDINARY SHAREHOLDERS PREFERENCE SHAREHOLDERS Ordinary Fair value Preference share and other Retained share capital reserve earnings capital Total At July 1, , ,682 82,256 75,000 1,486,063 Total comprehensive income for the year - - 7,006-7,006 Transfer of excess depreciation on revaluation of property, plant and equipment - (1,333) 1, At December 31, , ,349 90,595 75,000 1,493, Financial statements for the years ended June 30, 2014 and June 30, 2013 of TPCL and its subsidiary The tables below sets out the audited financial statements for the year ended June 30, 2014 and the audited (restated) financial statements for the year ended June 30, Statements of comprehensive income Audited (Restated) Rs 000's June 30, 2014 June 30, 2013 Turnover 579, ,212 Cost of sales ( 264,423) ( 247,286) Gross profit 315, ,926 Other income 7,388 1,922 Other gains 2,349 3,009 Marketing and selling expenses ( 9,257) ( 9,294) Administrative expenses ( 198,287) ( 184,667) Depreciation and amortisation ( 46,259) ( 44,196) Operating profit 71,194 61,700 Interest income Finance costs ( 41,430) ( 44,831) Profit before taxation 29,774 17,093 Taxation ( 2,570) ( 1,136) Profit for the year 27,204 15,957 Other comprehensive income : Items that will not be reclassified to profit or loss: (Losses)/gains on revaluation of buildings ( 2,138) 175,646 Remeasurement of post employment benefit obligations 969 ( 1,909) Deferred tax on remeasurement of post employment benefit obligations ( 145) 286 Items that may be reclassified subsequently to profit or loss: Deferred tax on revaluation of buildings during the year 320 ( 26,347) Other comprehensive income for the year ( 994) 147,646 Total comprehensive income for the year 26, ,633 Basic earnings per share (Re)

32 6.2.2 Statements of financial position Audited Audited (Restated) Rs 000's ASSETS Non-current assets June 30, 2014 June 30, 2013 Property, plant and equipment 1,938,583 1,948,943 Intangible assets 76,905 79,960 Investment in subsidiary - - Investment in financial assets 17,856 18,106 Non-current receivable - - Current assets 2,033,344 2,047,009 Inventories 46,701 40,968 Trade and other receivables 55,387 53,998 Cash and cash equivalents 4,885 9, , ,452 Total assets 2,140,317 2,151,461 EQUITY AND LIABILITIES Capital and reserves Share capital 1,028,125 1,028,125 Revaluation and other reserves 375, ,248 Retained earnings 82,256 71,830 Shareholders' interests 1,486,063 1,479,203 Non-current liabilities Borrowings 269, ,333 Deferred tax liabilities 155, ,850 Retirement benefit obligations 10,665 10, , ,592 Current liabilities Trade and other payables 61,536 57,474 Borrowings 157, ,609 Current tax liabilities , ,666 Total equity and liabilities 2,140,317 2,151,461 25

33 6.2.3 Statements of cash flows Audited Audited (Restated) Rs 000's Cash flow operating activities June 30, 2014 June 30, 2013 Cash generated from operations 104, ,584 Interest received Tax paid (583) (1,947) Interest paid (31,984) (36,844) Net cash from operating activities 72,326 70,016 Cash flow from investing activities Purchase of property, plant and equipment (32,672) (34,701) Payment of retention fees (2,139) - Purchase of intangible assets (962) (1,915) Proceeds from sale of property, plant and equipment 1, Proceeds from sale of financial assets 1,042 - Loan granted to subsidiary - - Loan repayment received from subsidiary - - Net cash used in investing activities (33,443) (36,270) Cash flow from financing activities Finance lease principal payments (912) (910) Proceeds from long-term borrowings 300,000 - Repayment of long term borrowings (384,667) (33,284) Dividend paid to preference shareholders (12,000) (6,000) Dividend paid to ordinary shareholders (7,350) - Net cash (used in)/from financing activities (104,929) (40,194) Net decrease in cash and cash equivalents (66,046) (6,448) Movement in cash and cash equivalents At July 1, (60,580) (54,132) Decrease in cash and cash equivalents (66,046) (6,448) At June 30, (126,626) (60,580) 26

34 6.2.4 Statements of changes in equity Audited statement of changes in equity as at June 30, Rs 000's Balance at July 1, 2013 Ordinary PERTAINING TO ORDINARY SHAREHOLDERS PERTAINING TO PREFERENCE SHAREHOLDERS Preference share Revaluation Actuarial Retained share capital reserve (losses)/gains earnings capital - as previously reported 953, ,501-68,201 75,000 1,480,827 - effect of adopting IAS 19 (Revised) - - ( 1,217) 52 - ( 1,165) - effect of changes in Employees Rights Act ( 1,170) - ( 1,170) - effect of change in accounting policy transfer of depreciation on revaluation surplus on property, plant and equipment - ( 4,035) - 4, as restated 953, ,466 ( 1,217) 71,830 75,000 1,479,204 Total comprehensive income for the year - ( 1,817) ,204-26,210 Transfer of depreciation on revaluation surplus on property, plant and equipment - ( 2,573) - 2, Dividend paid ( 19,351) - ( 19,351) At June 30, , ,076 ( 394) 82,256 75,000 1,486,063 Total 27