THE 52 ND ANNUAL REPORT

THE 52 ND ANNUAL REPORT OF THE MAURITIUS CO-OPERATIVE AGRICULTURAL FEDERATION LTD Registered under the Co-operative Act 2005 (as amended) Registered Office Caudan Port Louis Republic of Mauritius Phone: 212 1360, 211 9257, 211 0928 Fax: (230) 211 2261 Email: mcafco@intnet.mu Website: http//www.mcafcoop.com 1

Background The Mauritius Cooperative Agricultural Federation Ltd (MCAF) was established on the 16 th August 1950. The MCAF was set up at a time when small planters were facing a lot of problems which they could not solve or discuss neither individually nor at a level of primary societies, that is, Cooperative Credit Societies. The Federation acts as a mouth piece of nine thousand three hundred and twenty four small sugar cane planters who are grouped in one hundred and fifty five Cooperative Credit Societies affiliated to the Federation. In the wake to better serve the planting community the Federation has established a network of thirteen sales points which act as a one stop shop for supplying of agri inputs throughout the island to cater for planters in all regions. Vision of the MCAF To assist affiliated cooperative societies and sugar cane planters in responding to the challenges facing the sugar sector by pursuing each and every opportunity that may be beneficial to member planters. Mission of the MCAF To promote and safeguard the agricultural interests of affiliated societies by acquiring, disseminating and exchanging of useful, pertinent and practical information. To provide agri inputs at a reasonable price to member planters around the island and also To ensure adherence to good agricultural practices while promoting the use of eco friendly fertilizers and pesticides. 2

Chairman s Report Dear fellow Co-operators, On behalf of the Directors, I am pleased to present the 52 nd Annual Report of the Mauritius Co-operative Agricultural Federation Ltd for the financial year ended 30 June 2012. The performance of the Federation was reasonable in spite of the International Financial Crisis. The statutory reserve reached Rs 67,751.255. Fertilizer The sales of fertilizer followed the trend of last year with a slight increase in sales. However, the net income from this activity did not improve because of cut throat competitions between the suppliers. Bio Fertilizer Project The bio fertilizer project is well underway. (a) Bio Fert Co. Ltd A company - the Bio Fert Co. Ltd has already been constituted with the MCAF holding two third of the shares while the MCFI holds only one third. Procedures for the registration of the company has reached at its final stage. (b) Environment Impact Assessment The preliminaries for the Environment Impact Assessment (E.I.A) have been completed and a formal request for the report will be submitted to the Authorities soon. (c) Production Unit Tender papers for the production unit have been sent to seven companies in India as per the specifications submitted by Dr. Bachchan Singh of IFFCO. The tenders are for the supply of equipment, installation and commissioning of a 150MT capacity bio fertilizer plant. The tenders have been processed and sent to IFFCO for final acceptance. 3

(d) Training The prospective tenderer will also train the personnel. On our part the Mauritius Co-operative Agricultural Federation Ltd has already recruited a Technical Officer, a holder of BSc Honours in Agri-Science and he will soon leave for the Cordet Institute for training by IFFCO. (e) Compost The Mauritius Co-operative Agricultural Federation Ltd is supporting fully the use of compost produced through waste recycling. MCAF was among the groups that sought a subsidy from Government to bring down the price of local compost to make it accessible to small planters. International Co-operative year MCAF participated fully in all the activities organized on the theme Co-operative builds a better world by the Ministry of Co-operative and other stakeholders. On our own we had a social gathering of delegates of the affiliated societies at the Gold Crest Hotel in the presence of the Minister, the Acting Registrar of Co-operative Societies and other eminent personalities. MCAF allowed leaders of the movement from the whole island to socialize and share their experiences. In the same context, a delegation of the MCAF led by the Chairman and comprising of Directors S. Muniah and K. Khelawon and the General Manager were among the International guests of IFFCO to attend the National Forum held on 4 th & 5th July 2012 at the Manekshaw Centre & NCUI Auditorium, New Delhi. Director K. Khelawon had the opportunity to present a paper on Mauritius and the activities of the MCAF. The MCAF also organized a workshop on Reforms in the Sugar Sector - Challenges facing Co-operative Credit Societies on 17 th May 2012 at Bonâme Hall of the Mauritius Sugarcane Industry Research Institute at Réduit. The workshop was an opportunity for leaders to discuss and give suggestions for future action. The Mauritius Co-operative Agricultural Federation Ltd further more delegated Director K. Khelawon to participate in a Training Workshop on the theme Harnessing the Cooperative advantage for a Better World. 4

The workshop was organized by the Division for Social Policy & development of the United Nations at the ECA Conference Center, Addis Ababa, Ethiopia from 4 th to 6 th September 2012. The workshop allowed the 24 participants from Egypt, Ghana, Kenya, Mauritius, Rwanda, Senegal, South Africa, South Soudan, Tanzania, Zambia, Zimbabwe & Ethiopia (one from Government and one from N.G.O per country. All expenses were covered by the United Nations. The aim of the workshop was to provide: (1) Tools for leveraging the Coops model. (2) Model strategies for engaging coops addressing various social & economic challenges, and (3) strengthen capacity of participants to implement and review policies The Centenary of the Co-operative Movement. As you all know that this year marks the centenary of the Co-operative movement. MCAF has set up an organizing Committee for this special occasion. Messrs A. K. Ramnarain, H, Sewsagur, M. Gurib, S. Ghurroo have been co-opted to join the team of Directors. We hope that all the co-operators will join hands and attend the activities to be organized. Dear Delegates, feel free to send any suggestion that you may have on your own on this issue. Visitors to MCAF MCAF received the visits of two delegations from abroad. (1) Delegation from Fiji Islands (2) Delegation from Sirama (Malagasy Sugar Sector) The presentation covered the activities of the Mauritius Co-operative Agricultural Federation Ltd. The delegations also visited our sales points and were amazed by the facilities offered to the planters community. 5

The representatives of both delegations stated that most of their problems would have been solved if ever they had a co-operative movement in their respective country. They asked for the help of MCAF to enable them to share our experience with them. Mission of Directors A delegation led by the Chairman and comprising of Treasurer C. Khelawon and Directors R. Roopah, K. Ramsurrun, G. Dourgah & B. Beharee visited the 112 th Canton Fair organized by the Ministry of Commerce, People s Republic of China in Giangzhou, China from 15 th to19 th October 2012. An invitation to attend the fair was issued to MCAF by the Chinese Embassy in Mauritius. Thus the Directors did not have to pay the entrance fee. The various stands were visited with the help of an interpreter and two items viz sprayers & tillers were identified as being of interest. A first order for 690 sprayers has already been placed and further action will depend on the response. The prices of the tillers appeared to be reasonable but the C.I.F price quoted and the fact that MCAF did not have facility to perform servicing calmed down our enthusiasm. Sugar Cane The number of planters of sugar cane in the co-operative sector dropped down dramatically from 10900 in 2009/2010 to 9324 in 2011/2012. Abandoned land due to heritage problem, lack of labour, inability of some planters to carry out operations in their fields because of old age and insignificant returns on marginal lands, continue to jeopardize the Sugar Industry. Therefore, it s high time that co-operative leaders get to work to help redress the situation. Co-operative societies should play a major role by providing or organising facilities for fertilisation, weed control and harvesting for members. I would like to express the gratitude of the Directors and my own to all those co-operative pioneers who have built up a prestigious movement. The Mauritius Co-operative Agricultural Federation Ltd is committed to offer services of quality not only to cooperators but to others also. Providing services is costly and requires dedicated manpower. I would therefore, like to thank the General Manager and the Staff of the Federation for their performance in allowing the Federation to meet its objectives. Thank you. E. P. Appannah President 6

BOARD OF DIRECTORS Mr. APPANNAH P. Ellanah... Chairman Mr. KHELAWON Chabilall... Treasurer Mr. BEHAREE Bolah.................. Director Mr. MUNIAH Soobas... Director Mr. RAMSURRUN Kessordath Director Mr. DOORGAH Gyandath Director Mr. BHURUTH Khemraj... Director Mr. KHELAWON Kumar... Director Mr. ROOPAH Ravindranath... Director AUDIT COMMITTEE Mr. GUNESSEE Juskaransing PMSM Chairman Mr. ROOPAH Ravindranath Member Mr. KHELAWON Kumar Member Mr. BHURUTH Khemraj... Member Mr. BEHAREE Bolah Member The Supervisor/Secretary of Committee Member The Internal Controller Member STAFF APPOINTMENT AND DISCIPLINARY SUB-COMMITTEE (Corporate Governance Committee) Mr. RAMSURRUN Kessordath Chairman Mr. KHELAWON Kumar. Member Mr. BEHAREE Bolah Member Mr. MUNIAH Soobas Member Mr. DOORGAH Gyandath... Member 7

PESTICIDES IMPORTATION SUB-COMMITTEE Mr. MUNIAH Soobas Chairman Mr. RAMSURRUN Kessordath Member Mr. ROOPAH Ravindranath... Member Mr. KHELAWON Chabilall Member Mr. BHURUTH Khemraj Member 8

S T A F F A D M I N I S T R A T I O N HEAD OFFICE Mr. D. Goburdhun General Manager Mr. J. Sewdeen............... Administrative Secretary (up to Nov 2011) Mr. P. Ruggoo Marketing Executive Mr. K. Hurynag............... Supervisor/Secretary to Board Mrs S. Arjoon Accounts Clerk/Word Processing Operator Mr. H. Sobnauth Support Officer Mrs S. Golam Word Processing Operator/ Clerk/Receptionist Mrs N. Ramgutty Word Processing Operator/ Clerk/Receptionist Mr. S. Huree Head Office Attendant Mr. K. Seenundun Messenger/Driver Mr. V. Jakhun Lorry Driver (as fr Oct 2011) Mr. A. Lothay............... Helper (as fr Feb 2011) 9

SALES CENTRES Location of Sales Centre Name of Officers 1. Bon Accueil Mr. S. Sookdeal, Salesman 2. Beau Champ Mr. H. Dhukhi, Salesman 3. Goodlands Mr S.A. Gunesh, Assistant Salesman Mr. T. Baldee, Assistant Salesman 4. L Unite Mr. R. K. Soogrim, Assistant Salesman 5. Rivière du Rempart Mr. R. Nursing, Salesman 6. Rose Belle Mr. R. Gunnoo, Salesman Mr. A. Gopala, Assistant Salesman 7. Saint Felix Mr. D. Bhuruth, Salesman Mr. R.K. Gowardhun, Assistant Salesman 8. Saint Pierre Mr. K.S. Gokool, Salesman Mr. G. Kewul, Assistant Salesman 9. Solitude Mr. K.K. Kaundun, Salesman Mr. D. Mungur, Assistant Salesman 10 D Epinay Mr. V. Gangaram, Salesman 11. L Escalier Mr. G. Boodoo, Assistant Salesman 12. St. Martin Mr. K. Lodah, Assistant Salesman 13. La Marie Mr Y. Dhakoo, Assistant Salesman Note: All our Sales Centres, except D Epinay, L Escalier, St. Martin and La Marie are in the compound of the Farmers Service Centres. 10

The following Senior Salesmen are responsible for the following sites: 1. Mr. K. Seetohul (i) (ii) (iii) Saint Pierre La Marie Saint Martin 2. Mr. P. Rajroop (i) (ii) (iii) Bon Accueil Beau Champ L Unite 3. Mr. D. Rungasamy (i) (ii) (iii) Rose Belle St. Felix L Escalier 4. Mr. V. Mungur (i) (ii) (iii) (iv) Goodlands Solitude Rivière du Rempart D Epinay 11

REPORT OF THE BOARD OF DIRECTORS The Board of Directors has the pleasure in submitting its 52 nd Annual Report with the Audited Final Accounts and Balance Sheet as at 30 June 2012. MEETINGS The Board of Directors met fourteen times during the year 2011/2012. The meetings were fairly well attended. Moreover, the Staff Appointment & Disciplinary Sub- Committee, Pesticides Importation Sub-Committee and Audit Committee, each met on four occasions during the same period. MEMBERSHIP A total of 155 Co-operative Credit Societies were affiliated at the close of the financial year under review. MOUNT & BEAU PLANT PLANTERS FUNDS The Mount and Beau Plan Planters Funds are chaired by Messrs. Bolah Beharee and Kessordath Ramsurrun, whereas Mr. Horil Meenowa and Mr. Pitambar Ramdhoneea represent the Federation on the Board of Mount and Beau Plan Planters Funds, respectively. Both funds cater for the welfare of the planters of those two factory areas by providing them services as for the mending of roads, bridges etc. 12

Accounts The Financial Statements for the year 2011/12 showed an operating net surplus after Tax of Rs 1,581,400. Turnover has increased from Rs154,314,869 to Rs166,947,607 as compared to previous year s figure. Sales of fertilisers have also increased to Rs112,363,348 as compared to last year s figure which amounted to Rs107,595,596. The price of fertilisers has experienced an increase over the year. The market for fertiliser has become very volatile where the Federation has to struggle in order to retain its market share. Sale of Fertilisers Jul 06-13

CROPS It is to be noted that dry weather conditions which prevailed during the crop 2011 severely affected the growth of the cane and as a result, 435,310 tonnes of sugar were produced from 4.23 million tonnes of cane, compared to 452,473 tonnes of sugar from 4,37 million tonnes of cane for crop 2010. The extraction rate has experienced a slight decrease to reach 10.30% in 2011 compared to 10.37% for Crop 2010. During the year 2011, 33,357 tons of sugar from 405,546 tons of cane supplied by CCS planters were produced PRICE OF SUGAR The gradual decrease in the price of sugar from crop 2006 to a cumulative cut down of 36% for crop 2009, the sugar price guaranteed by the European Union has been versatile. The final price of sugar inclusive of the sugar insurance premium for the past five years was as follows: Price per ton of sugar Crop 2008 Rs 17,427.30 Crop 2009 Rs 14,612.03 Crop 2010 Rs 13,535.72 Crop 2011 Rs 16,020.16 Crop 2012 Rs 16,500.00 (Estimate) 14

PRICE OF MOLASSES The price of molasses at 86 Brix and the tonnage produced for the past five years together with the value are given below: CROP YEAR CCS PRICE/TON PRODUCTION 2007 12 564 1,361.69 2008 13 542 2,181.31 2009 13,770 3,016.29 2010 13,634 2,689.33 2011 13,018 1,981.65 PRICE OF BAGASSE CROP YEAR BAGASSE PER METRIC TON OF SUGAR Rs 2007 100.03 2008 100.89 2009 98.53 2010 103.85 2011 112.94 15

MISSION Visit to India 04 14 December 2011 A delegation of the MCAF headed by Mr. Khemraj Bhuruth, the Chairman and comprising of Directors, Messrs C. Khelawon, S. Muniah, K. Ramsurrun, G. Dourgah, D. Facknat and Mr. P. Ruggoo, Marketing Executive, visited India from 4 to 14 December 2011. This delegation had a working session with Dr. G. N. saxena on the following issues: (1) Setting up of the Bio fertilizer plant in Mauritius jointly with the Mauritius Chemical & Fertilizer Industry Limited. (2) Joint Venture with IFFCO/Tokyo Insurance Company for the setting up of an Insurance Agency. (3) Setting up of a distillery in India The delegation visited the Hafed Feed plant in Sukhpur Chowk, Rohtak, Haryana, and Hafed Pesticide Unit in Taraori to explore business opportunities. The delegation had also a working session with the officials of the United Phosphorous Ltd in respect of: (a) Increasing production line. (b) The possibility to import pesticides from UPL plant in China to reduce cost. (c) Their assistance by providing specimen labels. (d) To speed up the registration of pesticides with DCCB, by providing us with simplified and relevant documents. (e) The delegation also met Mr. R. Umatt of GLS and officials of Advanta seeds with the view to importing Bio products and seeds from their companies. 16

EVENT Commercial Agreement Solid Waste Recycling A Commercial Agreement was signed between the Solid Waste Recycling Ltd and the Mauritius Co-operative Agricultural Federation Ltd, on 23 November 2011 by Mr. Harry Krishna P. Padiachy, Chairman of SWR on the one hand and Mr. Khemraj Bhuruth, Chairman of MCAF, on the other. The Solid Waste Recycling Ltd has appointed MCAF Ltd as its prime distributor of its compost/soil enricher to planters through all its retail outlets. Further to the representations made by the MCAF Ltd and other stakeholders to encourage planters to use environment friendly products, the Government in the 2013 budget, has earmarked Rs40m which will be used to finance a compost subsidy scheme. Under this Scheme, planters registered with Small Farmers Welfare Fund will be eligible for a 30% subsidy on the ex-factory price of compost produced by Solid Waste Recycling Ltd. International Year of Co-operatives In the context of the International Year of Co-operatives 2012, the MCAF has organized a workshop on 17 May 2012 at Bonâme Hall Reduit where some 100 members of affiliated CCS were present. The Workshop was organized with the assistance of the Ministry of Business, Enterprise and Co-operatives and the Mauritius Cane Industry Authority. Hon.Jangbahadoorsing Seetaram, Minister of Business, Enterprise and Co-operatives and the Permanent Secretary of the Ministry of Agro Industry and Food Security and other eminent personalities have graced the opening function of the workshop. 17

The Main topics covered at the workshop were: (i) Overview of the sugar sector (ii) Marketing of sugar (iii) Challenges facing the CCS The Workshop was an important platform for participants to interact on vital interventions from institutions and organizations involved in the sugar and co-operative sectors, viz Mauritius Cane Industry Authority, Mauritius Sugar Syndicate and the Ministry of Business, Enterprise and Co-operatives. The participants were thus enlightened on the reforms in the sugar sector, the major challenges faced by the sector and consequential impact on the co-operative credit societies. The Workshop provided an opportunity to the participants to work in groups and to ponder on ways and means to revisit the roles and functions of Co-operative Credit Societies. ACKNOWLEDGEMENT The Board of Directors wishes to put on record its deep appreciation for the manner in which the General Manager and the entire staff have carried out their duties. By order of the Board of Directors D. Goburdhun General Manager 18

APPENDIX 19

PRODUCTION OF THE CO-OPERATIVE MOVEMENT Crop Year Sugar Cane Sugar Produced (tons) (tons) 2007 410,026 33,630 2008 436,264 34,813 2009 437,748 35,206 2010 411,988 34,056 2011 405,546 33,357 LAND AREA HARVESTED AND NUMBER OF PLANTERS (CCS) Crop Year Extent harvested Number of (in hectares) Planters 2007 7,276 11,860 2008 6,624 10,824 2009 6,374 10,141 2010 6,302 9,542 2011 6,074 8,928 20

EXTERNAL BOARD AND COMMITTEES Nominated by MCAF 1. Mauritius Chamber of Agriculture: Mr. E. P. Appannah (Bureau) Mr. K. Bhuruth Mr. G. Dourgah Mr. B. Beharee Mr. R. Roopah 2. Sugar Insurance Fund Board Mr. K. Khelawon 3. Mauritius Sugar Syndicate Mr. E.P. Appannah 4. Cane Planters & Millers Arbitration and Control Board Mr. S. Muniah 5. Irrigation Authority Mr. E. P. Appannah 7. St. Antoine Planter s Co-operative Trust Fund Mr. J. Ramguth 8. Mount Planters Fund Mr. B. Beharee Chairman Mr. H. Meenowa - Member 9. Beau Plan Planters Fund Mr. K. Ramsurrun - Chairman 10. Mauritius Molasses Co. Ltd Mr. N. Basant Roi PDSM 12. National Pension Fund Mr. N. Basant Roi PDSM 13. FANRPAN Mr. K. Khelawon 14. Mauritius Post & Co-operative Bank Ltd Mr. D. Goburdhun 21

THE MAURITIUS CO-OPERATIVE AGRICULTURAL FEDERATION LIMITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012 22

THE MAURITIUS CO-OPERATIVE AGRICULTURAL FEDERATION LTD APPROPRIATION OF SURPLUS 2011/12 Statutory Reserve - 25% - Rs 395,350.00 Dividend 20% on shares - Rs 29,600.00 Special Reserve - Rs 150,000.00 Staff Bonus - Rs 547,730.00 Bonus Planters - 10% - Rs 158,140.00 Bonus Secretaries - 5% - Rs 79,070.00 I.T. Fund - Rs 100,000.00 Building Reserve - Rs 72,458.00 Corporate Social Responsibility - Rs 49,052.00 1,581,400.00 23

24