2 Group Profile. 24 Notes to the Financial Statements. Dear Shareholder,

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2 Dear Shareholder, The Board of Directors of Compagnie des Magasins Populaires Limitée is pleased to present the Annual Report for the year ended 31 December 2016, the contents of which are listed below. This report was approved by the Board of Directors at its meeting held on 5 May Antoine L. Harel Chairman Charles Harel Director 2 Group Profile 14 Secretary s Certificate 3 Corporate Information 4 Board of Directors 5 Senior Management Profile Board of Directors of Subsidiary Companies 6 Chairman s Statement 7 CEO s Report 8 Corporate Governance Report 15 Statement of Compliance Statement of Directors Responsibilities 16 Independent Auditors Report 19 Statements of Financial Position 20 Statements of Profit and Loss and Other Comprehensive income 21 Statements of Changes in Equity 23 Statements of Cash Flows 13 Statutory Disclosures 24 Notes to the Financial Statements Annual Report

3 GROUP PROFILE Compagnie des Magasins Populaires Limitée (CMPL) is a subsidiary of the Harel Mallac Group and operates under the retail brand MONOPRIX in five main categories: Food and Beverages Fashion and Apparel Beauty Care and Cosmetics Maintenance Products Home and Leisure VISION To be a leading player in the Mauritian retail industry OUR GUIDING PRINCIPLES Agility and Determination in achieving. Care and Engagement in what we do. Trust and Responsibility in our relationships. operating since ,300 m 2 total retail surface area Rs 861m (+5%) turnover in ,420,156 transactions in employees 30,000 product references 3 stores 2 Compagnie des Magasins Populaires Limitée

4 QUALITY ENGAGEMENT At Compagnie des Magasins Populaires Limitée, we work with heart and dedication to bring exceptional value to all of our stakeholders. To put these words into action, we endeavour to: empower our people for optimal engagement and performance; advance our business practices to meet the highest standards; deliver innovative, sustainable and quality products and services. CORPORATE INFORMATION REGISTERED OFFICE 18, Edith Cavell Street Port Louis Mauritius Telephone: (230) BUSINESS REGISTRATION NUMBER C SECRETARY HM Secretaries Ltd. 18 Edith Cavell Street Port Louis Mauritius Telephone: (230) AUDITORS BDO & Co Chartered Accountants 10 Frère Félix de Valois Street Port Louis BANKERS The Mauritius Commercial Bank Ltd The State Bank of Mauritius Ltd LEGAL ADVISERS Mr Yves Hein Barrister-at-Law Mr André Robert Attorney-at-Law NOTARY Mr Didier Maigrot Notary Public REGISTRY Harel Mallac Corporate Services Ltd. 18 Edith Cavell Street Port Louis SUPERMARKETS Monoprix 195 Royal Road Curepipe Monoprix Bagatelle Shopping Mall Bagatelle Monoprix Cascavelle Shopping Village Royal Road, Bambous Annual Report

5 Antoine L. Harel (59) Chairman (Non-Executive) Antoine L. Harel is a Fellow Member of the Institute of Chartered Accountants in England and Wales and holds a BA (Hons) degree in Accounting and Computing. He joined Harel Mallac & Co. Ltd in In 1997, he was appointed Group CEO and has been Chairman of the Board since April He was President of the Mauritius Chamber of Commerce and Industry in 1992/1993. He was appointed to the Board of Directors of CMPL in August 1991 and is currently its Chairman. Other directorships (listed companies): The Mauritius Chemical and Fertilizer Industry Limited (Chairman), Harel Mallac & Co. Ltd (Chairman), Chemco Limited (Chairman), Bychemex Limited (Chairman) and Les Gaz Industriels Ltd (Chairman). Barthélémy Harel (54) Non-Executive Director Barthélémy Harel holds a Diploma in Automobile Engineering together with a National Certificate in Design and Technology from Northbrook College, Sussex, UK. He worked at Iframac Limited from 1989 to November 2015 as Technical Manager of its Agro and Heavy Vehicles Department both for Mauritius and Madagascar. He held the position of Manager Cummins Division of Mecom Ltd up to September He joined the Board of Directors in Other directorships (listed companies): none. Charles P. L. Harel (49) Non-Executive Director Charles Harel holds a National Diploma in Management and Finance from the Cape Technikon, South Africa, as well as an MBA from the University of Birmingham, UK. He joined the Harel Mallac Group in 1998 as the General Manager of the Tourism and Retail Cluster. He has, over the years, held various positions across the Group before being nominated as the CEO Designate of Harel Mallac Group in 2013 and CEO from 1 January He joined the Board of Directors of CMPL on 14 August Other directorships (listed companies): The Mauritius Chemical and Fertilizer Industry Limited, Harel Mallac & Co. Ltd, Chemco Limited and Bychemex Limited. Gaëtan Leclézio (82) Independent Director Gaëtan Leclézio joined Harel Mallac & Co. Ltd in 1953 where he subsequently held senior positions. He has served on the Boards of Directors of several subsidiaries of Harel Mallac & Co Ltd. He was appointed to the Board of Directors of the Group in Michel Pilot (60) Non-Executive Director Michel Pilot was the Head of Sales of the Agro-Industrial Department of Harel Mallac & Co. Ltd and was promoted General Manager in He was Managing Director of Harel Mallac Engineering Ltd from September 2005 to March He joined the Board of Directors of CMPL in Other directorships (listed companies): none. Michel Rivalland G.O.S.K. (63) Non-Executive Director Michel Rivalland G.O.S.K. is a Fellow Member of the Chartered Association of Certified Accountants. He was a Managing Director of The Mauritius Chemical and Fertilizer Industry Limited from October 2006 to June Michel Rivalland is an Executive Director of Harel Mallac & Co. Ltd. He first joined the Board of Directors of CMPL on 2 June Other directorships (listed companies): Harel Mallac & Co. Ltd, The Mauritius Chemical and Fertilizer Industry Limited, Bychemex Limited and Chemco Limited. Mubarak Sooltangos (68) Independent Director Mubarak Sooltangos is holder of a Diplôme d Études Supérieures (DES) in Banking and Finance from Conservatoire National des Arts et Métiers de Paris, Institut Technique de Banque. After 19 years spent in the banking sector, he joined Happy World Ltd as General Manager. He was subsequently appointed Managing Director of Happy World Foods in He held the position of General Manager of the Trade and Commerce Division of the British American Investment Group of Companies from 2005 to Since then, he has been acting as a Management Consultant. He joined the Board of Directors of CMPL on 25 June Other directorships (listed companies): none. Alain Vallet (62) Independent Director Alain Vallet holds a Diploma in Business Studies from the City of London Polytechnic. He joined Harel Mallac & Co. Ltd in 1979 as Commercial Executive in the Wine and Spirits Department. He helped in the launching of the Grays Group in the 1980s and was subsequently appointed General Manager in 1988 and member of its Board of Directors in He sat on several Boards of Directors and was an active figure of the Mauritius Chamber of Commerce and Industry, the Association of Mauritian Manufacturers and the Mauritius Employers Federation. He joined the Board of Directors of CMPL in Other directorships (listed companies): Terra Mauricia Ltd. Other directorships (listed companies): none. 4 Compagnie des Magasins Populaires Limitée

6 Jean-Raymond SEMAESSE Chief Executive Officer Jean Raymond Semaesse joined CMPL on 13 July 2015 as Chief Executive Officer. He has extensive international experience in the retail sector, having held numerous senior positions within the Casino Group and Carrefour Group. Over the course of his career, he has managed retail brands such as Carrefour, Champion, Continent and Jumbo in France as well as in Mauritius and Reunion Island. Sophie DOGER DE SPÉVILLE Marketing Manager Sophie Doger de Spéville has a master s degree in entrepreneurship with ISC Paris, a leading French business school. Sophie Doger de Spéville has worked in both the sales and marketing teams in various industries, including FMCG, in France first then Mauritius where she joined the marketing team at Casela World of Adventures. Sophie Doger de Spéville joined CMPL on 24 September 2016 as Marketing Manager. Atish TEETAN Human Resources Executive Atish Teetan was appointed Human Resources Executive of CMPL in May 2016 after spending almost 2 years at Harel Mallac and Co. Ltd in a similar position. Before joining the Group, Atish Teetan held the post of Human Resources Specialist for a Multinational. He has a Degree in Human Resources Management and has completed several development courses during his career. Yann NG YUM LOONG Purchasing Manager Yann Ng Yum Loong joined CMPL as General Manager of the Bagatelle outlet in February 2014, before taking on the challenge of setting up and centralizing the purchasing department for CMPL as Purchasing Manager since January He is a former executive of an important local group dealing in fastmoving consumer goods. Ivan RAGON Head of Operations Ivan Ragon joined CMPL in September He has been delegated to CMPL by MONOPRIX France with the objective of assisting with the further upgrade of the three outlets in Mauritius. He joined MONOPRIX France in 1983 and has held several positions across the Group before moving to Mauritius to assist the retail brand in the roll-out and alignment of the local stores to the international standards, concepts and operational processes of the MONOPRIX brand. Steeve YEUNG WING YEN Financial Controller Steeve Yeung Wing Yen joined CMPL as Financial Controller in March Prior to his employment with the Company, Steeve Yeung Wing Yen held the position of Financial Controller for the Services arm of Harel Mallac Group from 2004 to He is an Associate Chartered Accountant (ACA) of the Institute of Chartered Accountants in England and Wales. BOARD OF DIRECTORS OF SUBSIDIARY COMPANIES CMPL (BAGATELLE) LIMITÉE Antoine L. Harel Charles Harel Michel Rivalland G.O.S.K. Christian Yong Kiang Young CMPL (CASCAVELLE) LIMITÉE Antoine L. Harel Charles Harel Michel Rivalland G.O.S.K. Christian Yong Kiang Young The Directors of CMPL (Mont Choisy) Limitée are Messrs Antoine L. Harel, Charles Harel, Michel Rivalland G.O.S.K. and Christian Yong Kiang Young. Annual Report

7 CHAIRMAN S STATEMENT Dear Shareholder, The Mauritian food retail sector has sustained its dynamic progression in 2016, with an ever-rising number of consumers, new hypermarkets and supermarkets on the island, and a very competitive environment. As a pioneer in the modern food retail industry in Mauritius and operating three strategically located outlets, MONOPRIX remains a key actor of the segment, and believes in differentiating itself to maintain and grow its market share. The year under review was both very challenging and very rewarding for the Company, as it marked the deployment of a major strategic plan aiming at consolidating operations and boosting revenue, while in parallel conducting a Rights Issue that resulted in bringing in Rs 141M to sustain the aforementioned plan. Despite the challenges linked to the renovation and extension works in the three outlets, the Company has posted a 5% year-on-year growth in revenue, thus indicating that it has managed to regain significant market share during the course of the year. Even with these encouraging signs that CMPL s strategic plan has started to pay off, your Company has unfortunately sustained losses of Rs 88.3M for the year under review. Acknowledgements I would like to take this opportunity to thank Jean-Raymond Semaesse, Chief Executive Officer of CMPL, who has worked relentlessly since his arrival in July 2015 to roll out the strategic plan and create a strong, efficient team around the MONOPRIX brand. I extend my thanks to all the MONOPRIX team for their enthusiasm, resilience and hard work during I am also grateful to my colleagues on the Board of Directors for their support and contribution over the last year. Finally, I would like to acknowledge with thanks the continued support of all our stakeholders and the trust of our customers. Antoine L. Harel Chairman 6 Compagnie des Magasins Populaires Limitée

8 Dear Shareholder, CEO S REPORT Benefiting from a low inflation rate, the food retail sector remained dynamic during Mauritians are increasingly visiting shopping centres, hypermarkets and supermarkets, and allocate a larger share of their budget to food has also seen an increase in the number of supermarkets on the island, thus resulting in fiercer competition, with a lasting impact on profit margins due to actors seeking to preserve their market share. For MONOPRIX, 2016 saw the roll-out of several initiatives from the strategic plan: an improvement of the price positioning, the launch of our website and customer loyalty card, a Rights Issue and more importantly, the renovation work to modernise and expand the Curepipe and Cascavelle stores. The commercial offering has been completely reviewed to provide all Mauritians with access to the products they are looking for but most importantly, to preserve the added value of MONOPRIX by offering unique and diversified quality products with an additional effort on freshness. MONOPRIX has also revised its pricing with more intense promotional activities to position itself as the most affordable in its class. This positioning has reduced the margin rate but has led to a 10% increase in customer traffic in the first half of 2016 (outside the renovation period) and 14% turnover growth in spite of the low inflation rate. Moreover, the year was marked by the launch in July 2016 of the customer loyalty card, Mon Porte-Monnaie Fidélité MONOPRIX, which distinguishes itself from other similar schemes by offering cashback benefits to customers based on the amounts spent on each visit. To date, after some eight months, more than 30% of our turnover is generated by loyalty card holders. The year 2016 also saw the creation of the website as well as the mobile application, mymonoprix, thus bringing modernity and ease of use to customers. August 2016 marked the end of the Rights Issue process: CMPL was able to raise the Rs 141M which will be leveraged to renovate assets and reinforce the market positioning of MONOPRIX. At the end of November 2016, the Bagatelle store was revamped to better meet the market demand through an improved commercial offering including larger shelving for frozen foods and a new promotional area. The historic shop of MONOPRIX Curepipe also underwent drastic works that lasted five months and resulted in a state-of-the-art retail outlet with a larger surface area (expanded by 250m²), and a much-awaited rooftop car park, increasing parking capacity to more than 100 spaces. As for the Cascavelle outlet, the 500m² sales area extension was completed in mid-february 2017, leading to an expanded commercial offering, the development of non-food shelves, a new clothing-make-up concept and a wine cellar. The above arrangements, coupled with some other actions to be carried out in the near future, provide us with comfort in our ability to meet the expectations of growing our market significantly in 2017 and contribute to improving your Company s profitability. Together, we will make sure that MONOPRIX becomes the preferred retail brand for all Mauritians. Jean-Raymond Semaesse Chief Executive Officer Annual Report

9 CMPL is committed to the highest standard of business integrity, transparency and professionalism in all its activities and ensures that the Company is managed ethically and responsibly to enhance business value for all its stakeholders. BOARD OF DIRECTORS The Board endeavours to exercise leadership, entrepreneurship, integrity and judgment in directing the Company, so as to achieve continuing prosperity for the organisation while embracing both performance and conformance. The Board also ensures that the activities of the Company comply with all legal and regulatory requirements as well as with its constitution from which the Board derives its authority to act. The Board, among others, oversees the development and implementation of the Company s corporate strategy and reviews performance objectives. It ensures the succession plans for key individuals and effective communication with the Company s stakeholders, promotes the Company s Code of Ethics and oversees financial and capital management. As such, it reviews and approves quarterly and annual financial reports, monitors financial results and approves major capital expenditure, major acquisitions, divestitures and material commitments. The Board also oversees compliance and risk management, both at Company and Group levels. At 31 December 2016, the Board of Directors consisted of eight members, of whom five were Non-Executive and three Independent. The Board is of the opinion that in view of its size, having the CEO, Mr Jean Raymond Semaesse and the Financial Controller attending Board meetings whenever required is in accordance with the Code s spirit regarding executive presence on the Board. Non-Executive Directors have free access to members of the management team, with whom they can interact freely. With a view to enhancing the Board s effectiveness, a Board performance review is carried out yearly to assess the Directors appreciation of the Board s performance, its procedures and practices. The results of the assessment are examined by the Corporate Governance Committee. This Committee makes its recommendations to the Board on any required remedial action. All Directors have access to the Company Secretary and newly appointed Directors follow an induction programme. The Directors of the Company hold office for one year but are eligible for re-appointment. They are elected or re-elected by separate resolutions yearly. The Board had, at 31 December 2016, two standing Board Committees (as described below), which meet regularly under the terms of reference set by the Board. The composition of the Board of Directors and directorships held by the Directors in other listed companies are given on page 4 while the composition of the Board of Directors of the Company s wholly-owned subsidiaries is available on page 5. BOARD MEETINGS The Board meets regularly during the year. For the period under review, the Board met eight times. The Board meetings are conducted in accordance with the Company s constitution and the Companies Act Board meetings are organised in such a way that Directors receive all required information important to their understanding of the business to be conducted at the Board meeting so that they may make their full contribution and properly discharge their responsibilities. At these Board meetings, the Company s budget, performance and forecast are reviewed and approved, reports from the Chief Executive Officer and Committees Chairmen are received, strategic issues discussed and statutory matters approved. The Board may invite management or external consultants to attend Board meetings when desirable. BOARD COMMITTEES Corporate Governance Committee The Corporate Governance Committee consists of Messrs Antoine L. Harel (Chairman), Gaëtan Leclézio and Charles Harel. The Company Secretary acts as secretary to the Committee. The Chief Executive Officer attends the Committee s meetings whenever required. The Committee s terms of reference include the key areas that are the remit of a Nomination and Remuneration Committee. Its main responsibilities include establishing a formal and transparent procedure for developing policy on executive and senior management remuneration, as well as determining specific remuneration packages for Executive Directors of the Company when applicable. It oversees the process regarding recommendation of potential candidates and ensures that proposed Directors are fit and proper to act in that capacity. It further monitors the balance and effectiveness of the Board. The Committee also makes recommendations relating to the fees of the Company s Non-Executive and Independent Directors. The Corporate Governance Committee has assessed the Board and made recommendations for the election of Directors at the next annual meeting. The Board entrusts the day-to-day management of the Company to the Chief Executive Officer who ensures the smooth running of the organisation s and Group s affairs. 8 Compagnie des Magasins Populaires Limitée

10 Audit Committee The Audit Committee consists of Messrs Gaëtan Leclézio (Chairman), Michel Rivalland G.O.S.K. and Mubarak Sooltangos. The Company Secretary acts as secretary to the Committee. The Chief Executive Officer and the Financial Controller attend the Committee s meetings whenever required. The role and responsibilities of the Audit Committee are to assist the Board in discharging its duties relating to the safeguarding of assets, the operation of adequate systems and control processes, and the preparation of accurate financial reports and statements, in compliance with all applicable legal requirements and accounting standards. The Committee also addresses issues within the ambit of a Risk Management Committee and as such provides a forum for discussing business risks as well as control issues and formulates relevant recommendations for consideration by the Board. The Committee fulfilled its responsibilities for the year under review in compliance with its terms of reference approved by the Board. The Board is satisfied that the Audit Committee has the required skills, knowledge and financial experience to discharge its duties effectively. INTERNAL CONTROL Internal control is a process designed to provide reasonable assurance regarding the achievement of the Company s objectives and is performed by the Board of Directors, the Management and other personnel. It is applicable to and is built into various business processes so as to cover all significant enterprise areas. Systems and processes have been implemented within the Company and the Group and are regularly controlled by the Internal Audit function to ensure that they are effective and are being adhered to. Three reviews were performed by the Internal Audit during the year. Internal Audit reports for the Company and the subsidiary companies are reviewed by the Audit Committee which makes its recommendations for modifications or upgrading of systems and processes as and when necessary to enhance their effectiveness. INTERNAL AUDIT The Internal Audit is a function responsible for providing assurance to the Board regarding the implementation, operation and effectiveness of internal control and risk management within the Company and its subsidiary companies. It reports to the Audit Committee and to the Board of Directors. It assists in the maintenance and improvement of the process by which risks are identified and managed and in the strengthening of the internal control framework. The Internal Audit function has been outsourced to Harel Mallac & Co. Ltd. The Internal Audit conducts its assignments based on a yearly plan which is validated by the Audit Committee. The Internal Auditor has unrestricted access to the Company s and subsidiaries records, Management and employees. Systems reviewed in 2016 include the sales and debtors cycle, the procurement and creditors cycle, the stock cycle, treasury management, fixed assets management, and thus cover all significant areas of the Company s and Group s internal control. The reports produced by the Internal Audit were regularly submitted to the Audit Committee for discussion and for the follow-up of the implementation of recommended actions. RISK MANAGEMENT The Board regularly addresses and evaluates business, financial, regulatory and compliance, physical, human resources and IT risks. Although the Board is ultimately responsible for the process of risk management, the Management is accountable to the Board for the design, implementation and detailed monitoring of the risk management process. The Board has delegated to the Audit Committee the responsibility to supervise the monitoring and mitigation of risk exposure. The Audit Committee thus regularly reviews both internal and external risk factors and makes its recommendations to the Board as to the policies needed to mitigate risk. A risk management framework was adopted in 2010 and a risk register has been elaborated for better safeguard of the Group s interests and assets. The framework and register are reviewed on a regular basis. The following key risks have been identified and information on financial risk management is given in Note 3 of the Financial Statements on pages 33 to 37. Physical risks Among the physical risks identified are unavoidable events such as riots, cyclones and other natural calamities. Mitigating actions have been undertaken, such as the adoption of cyclone and fire procedures, subscription to a relevant insurance cover, and the identification of a business continuity plan and disaster recovery plan. Health and safety measures as well as security procedures have been implemented to limit the occurrence of on-site accidents. The Group also avails itself of the services of an Occupational Physician Consultant and a Health and Safety Officer. Finally, the Group s control procedures ensure mitigation of risks relating to fraud and theft. Annual Report

11 RISK MANAGEMENT (CONT D) Human Resources risks Loss of key personnel has been identified as a major risk factor. In view of mitigating this risk, retention policies have been adopted as well as a formal performance assessment and reward system implemented within the Company and the Group. Technology risks In order to mitigate the risk of an IT crash or major breakdown, backup and restriction procedures have been set up within the Company and the Group. GROUP STRUCTURE The Directors recognise that the parent entity is Harel Mallac & Co. Ltd and that the ultimate parent entity is Société Pronema. The Director common to the aforesaid entities is Mr Antoine L. Harel who is gérant of Société Pronema and a Director of Harel Mallac & Co. Ltd. Messrs Charles Harel and Michel Rivalland G.O.S.K. sit on the Board of Directors of Harel Mallac & Co. Ltd. The Company has three wholly owned subsidiaries, namely CMPL (Bagatelle) Limitée, CMPL (Cascavelle) Limitée and CMPL (Mont Choisy) Limitée. MEMBERS ATTENDANCE AT BOARD AND COMMITTEE MEETINGS HELD IN 2016 Corporate Board of Governance Audit Directors Directors Committee Committee Harel, Antoine L. 8/8 4/4 - Harel, Barthélémy 8/8 - - Harel, Charles 8/8 4/4 - Leclézio, Gaëtan 8/8 4/4 4/4 Pilot, Michel 7/8 - - Rivalland, Michel G.O.S.K. 8/8-2/4 Sooltangos, Mubarak 6/8-4/4 Vallet, Alain 7/8 - - DIVIDEND POLICY The Company tends to distribute, as far as possible, a regular dividend to its shareholders after considering the Company s performance and profitability, investment needs, capital expenditure requirements and growth opportunities. No dividend was declared for the year under review. Year Dividend cover (times) Dividend yield (%) SHAREHOLDERS HOLDING MORE THAN 5 PERCENT OF AS AT 31 MARCH 2017 Details of shareholders directly or indirectly interested in 5 percent or more of the ordinary share capital of the Company as at 31 March 2017 are listed on page 14. DAILY SHARE PRICE FROM 1 JANUARY TO 31 DECEMBER 2016 SEMDEX 1, , , , , , , , , , , Jan-16 Feb-16 Mar-16 Apr-16 May-16 CMPL DIRECTORS INTERESTS IN SHARES The direct and indirect interests of Directors in the ordinary shares of the Company are to be found on page 13. DIRECTORS DEALINGS IN SHARES OF The Directors follow the principles of the Model Code on Securities Transactions as detailed in Appendix 6 of the Stock Exchange of Mauritius Listing Rules whenever they deal in the shares of the Company. During the year under review, none of the Company s Directors traded in the Company s shares. RELATED PARTY TRANSACTIONS Related party transactions are detailed on pages 64 and 65. COMPANY S CONSTITUTION The Company s constitution does not provide any ownership restrictions or pre-emption rights. The constitution is in agreement with the Companies Act 2001 and the Listing Rules of the Stock Exchange of Mauritius and does not contain any material clause that needs to be disclosed. SHAREHOLDERS AGREEMENTS AFFECTING THE GOVERNANCE OF BY THE BOARD Jun-16 The Company is not aware of any such agreement pertaining to the year under review. Jul-16 SEMDEX Aug-16 Sep-16 Oct-16 Nov-16 Dec CMPL SHARE PRICE 10 Compagnie des Magasins Populaires Limitée

12 THIRD PARTY MANAGEMENT AGREEMENT The Company has a management contract with Harel Mallac & Co. Ltd for management support services including but not limited to financial, accounting, legal, internal audit and human resources fields. The agreement is renewable on a yearly basis. DIRECTORS FEES Non-Executive Directors may be paid Directors fees commensurate with their responsibilities on the Board. Those serving on the Board Committees may receive additional fees. One of the Non- Executive Directors does not receive Directors fees for sitting on the Board and the Board Committees. DIRECTORS REMUNERATION Directors remuneration is given on page 13. It has been disclosed globally due to the commercial sensitivity of the information. REMUNERATION POLICY The Company s remuneration policy recommends that the Company provides competitive rewards for its senior executives and other management staff, taking into account the Company s performance and external market data from independent sources, in particular salary levels for similar positions in comparable companies. The remuneration package consists of base salary, fringe benefits and individual and collective performance bonuses. The Board of Directors, upon recommendations of the Corporate Governance Committee, determines the remuneration package. EMPLOYEE SHARE OPTION PLAN No employee share option plan is available. CODE OF ETHICS The Company abides by the Code of Ethics of the Harel Mallac Group. It is extensively covered in the Company s induction programme for all new employees and Directors. SOCIAL, HEALTH AND SAFETY In line with the philosophy of the Harel Mallac Group, the Company is committed to comply with the Occupational Health and Safety Policy and Standards for all its customers and employees in the workplace. In 2016, First Aid and Fire Warden training sessions were organised for selected employees within the Company. As such, First Aid and Fire Warden teams are now in place. The Company has not recorded any major workplace accidents and all minor incidents have been duly investigated and remedial actions taken in order to prevent reoccurrence in the future. We have also set up our Health and Safety Committee which meets regularly to discuss the way forward in achieving a safe and healthy workplace. With regard to food hygiene, our employees have undergone training in food handling techniques. In 2017, further initiatives will be rolled out throughout the Company to ensure a safe and healthy environment for our customers and also to enhance the Company s health and safety culture. The Company also ensures that its recruitment and promotion policies are fair and that procedures adopted are both transparent as well as competency and merit-based. To encourage communication at all levels within the Company, we have set up an Employer/Employee Committee to enable free-flowing communication from top to bottom and vice versa. We also promote honest and transparent business practices. CORPORATE SOCIAL RESPONSIBILITY The three MONOPRIX outlets have engaged with their respective surrounding communities for actions benefitting underprivileged households in the regions of Bambous and Curepipe. In 2016, we continued our regular contribution of non-perishable food items to Caritas Banque Alimentaire project, and clothing items to the NGO s beneficiaries living in poverty. In June, on the occasion of the Fête du Pain, the Cascavelle outlet has invited SOS Children s Village residents to discover its bakery and learn how to prepare bread. For the second year in a row in September 2016, CMPL contributed cardboard walls to the «Salon Made in Femmes» organised by the Entreprendre au Féminin Océan Indien platform. As a member of the Harel Mallac Group, CMPL fully supports the causes embraced by the Fondation Harel Mallac (FHM) which, since its inception in 2009, has been focusing on improving the education and living conditions of underprivileged children, in particular in the localities where the Group s companies operate. In 2016, the FMH has partnered with four major NGOs working with children: SOS Children s Village in Bambous, École Sainte Famille in Bois Marchand, the APEIM School in Port Louis, and Collège Technique Saint Gabriel in Sainte Croix. This financial support was complemented by regular employee volunteering activities ranging from Music and Arts Days to the Christmas Wish in a Box celebration. The FHM has also supported sports-related projects led by the Trust Fund for Excellence in Sports and the Northern Pirates Sports Club. Annual Report

13 SHAREHOLDER INFORMATION Forthcoming Annual Meeting A proxy form is enclosed for those shareholders who are unable to attend. Shareholders are requested to bring their ID cards or passports to the meeting, as these are required for registration. Schedule of Events Publication of condensed audited results for previous year February / March 2017 Annual Meeting May / June 2017 Publication of condensed results for 1st quarter May 2017 Publication of condensed results for 2nd quarter August 2017 Publication of condensed results for 3rd quarter November 2017 Dividend declaration December 2017 Dividend payment December 2017 / January 2018 Shareholders Practical Guide Issues Change of address If shares are deposited with the CDS Change of name Acquisition or disposal of shares Share transfers Lost share certificate Direct dividend credit Action Contact the Company s secretariat Contact the personal broker Contact the Company s secretariat Contact the personal broker Contact the Company s secretariat Contact the Company s secretariat Forward the relevant form to the Company s secretariat PROFILE OF COMPANY S SHAREHOLDERS AS AT 31 MARCH 2017 Size of Shareholding Number of Shareholders Number of Shares Owned % Holding , , , ,001-5, , ,001-10, , ,001-50, , , , , , , , Over 500, ,821, Total ,293, SUMMARY BY SHAREHOLDING CATEGORY AS AT 31 MARCH 2017 Size of Shareholding Number of Shareholders Number of Shares Owned %Holding Individual , Insurance and assurance companies 1 187, Pension and provident funds 5 67, Investment and trust companies 4 9, Other corporate bodies 50 15,798, Total ,293, Compagnie des Magasins Populaires Limitée

14 PRINCIPAL ACTIVITY The principal activity of the Company consisted, at 31 December 2016, of the operation of three retail stores in Curepipe, Bagatelle and Cascavelle respectively. DIRECTORS OF The Directors of the Company and of its subsidiaries are listed on pages 4 and 5. DIRECTORS REMUNERATION AND BENEFITS Remuneration and benefits received, or due and receivable from the Company were as follows: The Group The Company Rs 000 Rs 000 Rs 000 Rs 000 Directors of the Company Executive Directors Full-time - 3,562-3,562 Part-time Non-Executive Directors Total 758 4, ,192 Directors of subsidiaries did not receive any remuneration as Board members of the subsidiaries. DIRECTORS AND OTHER OFFICERS INTERESTS IN SHARES The Directors and other Officers interests in the securities of the Company as at 31 December 2016 is as follows: Directors Direct Interest Indirect Interest Harel, Antoine L ,310 Harel, Barthélémy ,804 Harel, Charles ,817 Leclézio, Gaetan - - Pilot, Michel - - Rivalland G.O.S.K., Michel - - Sooltangos, Mubarak - - Vallet, Alain - - None of the other Officers have direct or indirect interests in the Company s shares. None of the Directors or other Officers have direct interests in the Company s subsidiaries, which are wholly-owed subsidiaries. CONTRACT OF SIGNIFICANCE There was no contract of significance to which the Company or its subsidiaries have been a party and in which a Director was materially interested be it directly or indirectly. Annual Report

15 SHAREHOLDING OF MORE THAN 5 PERCENT AS AT 31 MARCH 2017 At 31 March 2017, the following shareholders were directly or indirectly interested in more 5 percent of the Company s share capital. Shareholder % holding Harel Mallac & Co. Ltd Except for the above, no person has reported any material interest of 5 percent or more of the equity share capital of the Company. CORPORATE SOCIAL RESPONSIBILITY The subsidiaries did not make any donations or Corporate Social Responsibility contributions during the years 2016 and The Company or its subsidiaries made no political donations during the years 2016 and AUDITORS FEES The fees payable to the auditors, for audit and other services, were: No non-audit services were rendered by BDO & Co in 2016 and Rs. 000 Rs. 000 Donations 3 5 (2016: 3 recipients; 2015: 6 recipients) Corporate Social Responsibility contribution - - The Group The Company Rs 000 Rs 000 Rs 000 Rs 000 Audit fees payable to: -BDO & Co Fees paid for other services provided by: -BDO & Co We certify that, to the best of our knowledge and belief, the Company has filed with the Registrar of Companies all such returns as are required of the Company under the Companies Act HM Secretaries Ltd Secretary 28 March Compagnie des Magasins Populaires Limitée

16 Name of PIE: Compagnie des Magasins Populaires Limitée Reporting Period: 1 January 2016 to 31 December 2016 We, the Directors of Compagnie des Magasins Populaires Limitée, confirm that to the best of our knowledge, the PIE has complied with all of its obligations and requirements under the Code of Corporate Governance except for Sections and Reasons for non-compliance are as follows: The Company does not have Executive Directors. The Board is of the opinion that in view of its size, having the CEO and the Financial Controller attending Board and Board Committees meetings, whenever required, is in accordance with the Code s spirit regarding executive presence on the Board The Company does not disclose details of remuneration paid to each Director on an individual basis due to the commercial sensitivity of the information. Antoine L. Harel Chairman Charles Harel Director 28 March 2017 Directors acknowledge their responsibilities for: (i) (ii) (iii) adequate accounting records and maintenance of effective internal control systems; the preparation of financial statements which fairly present the state of the Company as at the end of the financial year and the results of its operations and cash flows for that period and which comply with International Financial Reporting Standards (IFRS); and the selection of appropriate policies supported by reasonable and prudent judgments. The External Auditors are responsible for reporting on whether the Company s financial statements are fairly presented. The Directors report that: (i) (ii) (iii) (iv) adequate accounting records and an effective system of internal controls and risk management have been maintained; appropriate accounting policies supported by reasonable and prudent judgments and estimates have been used consistently; applicable accounting standards have been adhered to. Any departure in the interest of fair presentation has been disclosed, explained and quantified; and the Code of Corporate Governance has been adhered to. Reasons have been provided in the Statement of Compliance where there has been non-compliance. Approved by the Board of Directors on 28 March 2017 and signed on its behalf by: Antoine L. Harel Chairman Charles Harel Director Annual Report

17 Independent Auditors Report To the Shareholders of Compagnie Des Magasins Populaires Limitée This report is made solely to the members of Compagnie Des Magasins Populaires Limitée (the Company ), as a body, in accordance with Section 205 of the Companies Act Our audit work has been undertaken so that we might state to the Company s members those matters we are required to state to them in an auditor s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company s members as a body, for our audit work, for this report, or for the opinions we have formed. Report on the audit of the Financial Statements Opinion We have audited the consolidated financial statements of Compagnie Des Magasins Populaires Limitée and its subsidiaries (the Group), and the Company s separate financial statements on pages 19 to 65 which comprise the statements of financial position as at 31 December 2016, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the financial statements on pages 19 to 65 give a true and fair view of the financial position of the Group and of the Company as at 31 December 2016, and of their financial performance and their cash flows for the year then ended in accordance with International Financial Reporting Standards and comply with the Companies Act Basis for Opinion We 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 are independent of the Group and of the Company in accordance with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Mauritius, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Material Uncertainty Related to Going Concern We draw attention to note 2(b) of the financial statements. In forming our opinion, we have considered the adequacy of the disclosures in the note concerning the ability of the Group and the Company to continue on a going concern basis, the validity of which depends on the continued financial support of the Company s main shareholder. The going concern assumption is also supported by the discounted cash flow forecasts of the Company and its subsidiaries over a period of five years. Actual results may be different from forecasts since anticipated events may not occur as expected. Our opinion is not modified in this respect. Key Audit Matters Key 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. In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matters described below to be the key audit matters to be communicated in our report. 1. The Company - Investment in and loans receivable from subsidiaries Key Audit Matter At 31 December 2016, the Company s investment in and loan receivable from its subsidiaries amounted to Rs.229.7m representing 42% of total assets.we focused on this area as a key audit matter due to amounts involved being material and cash is tied up in the group receivables. An impairment of Rs.139m in respect of investment in and loan receivable from one of the company s subsidiaries was recorded during the year. Related Disclosures Refer to notes 7, 9 and 31 of the accompanying financial statements. Audit Response We have assessed the fair value and the recoverability of the Company s investment in and loans receivable from its subsidiaries based on discounted cash flow forecasts of the subsidiaries over five years. We evaluated the key assumptions underlying the forecasts through analysis of past year results and discussion with management regarding future plans. 16 Compagnie des Magasins Populaires Limitée

18 Independent Auditors Report (Cont d) To the Shareholders of Compagnie Des Magasins Populaires Limitée 2. The Group and the Company - Assessement of net realisable value of inventories Key Audit Matter Inventories are stated at the lower of cost and net realisable value. The carrying amount of inventories at 31 December 2016 amounted to Rs.121.9m for the Group and Rs.31.5m for the Company. The exercise for the assessment of the net realisable value involves the use of judgement and assumptions. Audit Response Our audit procedures were designed to challenge the basis used for assessing the net realisable value of inventories and included: - Examining the Company s and its subsidiaries historical patterns of inventory sold at full price and inventory sold below full price and below cost, together with the related margins achieved for each product lines; and - Assessing the appropriateness of the percentages applied by challenging the assumptions made by the Directors on the extent to which older inventory can be sold. Other Information Directors are responsible for the other information. The other information comprises of the following reports (but does not include the financial statements and our auditor s report thereon), which we obtained prior to the date of this auditor s report: - Corporate Information - Board of Directors - Board of Directors of Subsidiary Companies - Senior Management Profile - Corporate Governance Report - Statement of Compliance - Statement of Directors Responsibilities - Secretary s Certificate Other information also comprise of the reports listed below,which is expected to be made available to us after the date of this auditor s report. - Group Profile - Chairman s Statement - CEO s Report - Statutory Disclosures Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon. 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 other information, which will be made available to us after the date of our auditors report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance. Responsibilities of Directors and Those Charged with Governance for the Financial Statements The 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 requirements of the Companies Act 2001, and for such internal control as the directors determine is necessary to enable the preparation of the 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 Group and 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 Group and the Company or to cease operations, or have no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Group and the Company s financial reporting process. Annual Report

19 Independent Auditors Report (Cont d) To the Shareholders of Compagnie Des Magasins Populaires Limitée Auditor s Responsibilities for the Audit of the Financial Statements Our 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 judgment and maintain professional skepticism 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 Group and the Company s internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by directors. - Conclude on the appropriateness of 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 Group and 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 Group and the Company to cease to continue as a going concern. We communicate with those charged with governance 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 those charged with governance 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 those charged with governance, we determine those matters that were of most significance in the audit of the 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 Companies Act 2001 We have no relationship with, or interests in, the Company or any of its subsidiaries, other than in our capacity as auditors, business advisers and dealings in the ordinary course of business. We have obtained all information and explanations we have required. In our opinion, proper accounting records have been kept by the Company as far as it appears from our examination of those records. Financial Reporting Act 2004 The Directors are responsible for preparing the corporate governance report. Our responsibility is to report the extent of compliance with the Code of Corporate Governance as disclosed in the annual report and on whether the disclosure is consistent with the requirements of the Code. In our opinion, the disclosure in the annual report is consistent with the requirements of the Code. - 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. - Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. BDO & CO Chartered Accountants Port Louis, Mauritius. 28 March 2017 Rookaya Ghanty, F.C.C.A. Licensed by FRC 18 Compagnie des Magasins Populaires Limitée