ANNUAL REPORT 2014 PARTNERING FOR PROGRESS & PROSPERITY 10th Floor, One Cathedral Square Building, 16, Jules Koenig Street, Port Louis, Mauritius Tel: +230 203 3800 Fax: +230 210 8560 contact@investmauritius.com www.investmauritius.com Contents ANNUAL REPORT 2014 Partnering for Progress & Prosperity 01 Mr. Gérard Sanspeur CHAIRMAN 02 Mr. Ken Poonoosamy 2 MANAGING DIRECTOR 03 OPERATIONAL 4 REVIEW 6 3.1. Overall Performance ................................8 04 05 3.2. Sectoral Review & Key Projects ..............14 3.3. Marketing & Promotional Initiatives ..... ..26 3.4. Reinforced Africa Strategy .....................36 3.5. Doing Business .......................................41 CORPORATE FINANCIAL GOVERNANCE REPORT 44 STATEMENT 50 1 Chairman’s Message The Board of Investment is embarking on a process of transformation which will make it a fourth generation IPA whose promotional thrust is characterized by economic development, environmental sustainability, social development and good governance. Consequently, assessing the performance of an investment promotion agency solely on the basis of foreign direct investment inflows is likely to be an impairment to its efficiency and its raison d’être. Surely, one of the primary objectives of an IPA is investment marketing. However, if the sole performance indicator is a cold count of FDI inflows without taking into consideration the impact of foreign investments on the structure of the national economy, on job creation, on inclusive social progress, on “social capital” and the safeguard of the environment, the strategy for investment promotion calls for a serious review. Can one imagine for just a minute a wild proliferation of gated dormitory compounds with IRS and RES projects across Mauritius? BOI’s turnover is not exactly akin to that of a corporate. The institution’s performance must have a direct, lasting and positive incidence on the economic structure. It is assessed by several lead and lagging indicators, namely capacity building in terms of developing and attracting new talents, innovation regarding new sectors of business, employment in terms of jobs with higher pay packets, social advancement through the regression of poverty and an overall enhancement of the quality of life. These are tangible benefits that place BOI’s role in its right context and give it a meaningful perspective. A fourth generation IPA banks on the involvement of a multiplicity of professionals working with a new mindset that places man and his environment at the core of economic progress and development. BOI is a full-fledged partner with all stakeholders whose mission is to consider the type of legacy that will give future generations a competitive edge. Therefore, a shift in the promotion mode has become imperative. Management and staff alike should not use only the magnifying glass of FDI in the discharge of their responsibilities, since a relatively small investment accompanied by expertise and vision can bring about sustainable development across the board. BOI has the stressful responsibility to evaluate inputs and move beyond facilitation to targeting sustainable FDI that contributes to development in terms of quality and not sheer volume. BOI will be assessing quality without neglecting quantity, for in the long term the balance must be in favour of national convenience and sustainable progress. 2 Our agency has acquired experience to differentiate what is truly profitable and what significantly contributes to investment promotion and business facilitation. If we want to be a game changer in the competitive development of Mauritius as a hub, new research must be undertaken and new approaches adopted to improve the ease of doing business. I do not see BOI in any other role than that of spearheading new progress. Our priority is to compellingly communicate the business advantages of our offering, leverage available technology to consolidate and advance existing pillars such as financial services, manufacturing, hospitality, seaport and airport logistics, transshipment and tourism while initiating projects in smart sectors like ICT-BPO services, research and innovation, bio-medical, permaculture and engineering. I am confident that our staff will therefore forget the status quo, rise to the occasion and build knowledge so as to be in a position to take up new challenges that will move our country to its next level of development. Only then shall we be able to say “Mission accomplished”. Let me conclude with this quote from William Pollard, “Without change there is no innovation, creativity, or incentive for improvement. Those who initiate change will have a better opportunity to manage the change that is inevitable.” Gérard Sanspeur Chairman 3 Managing Director’s Message Dear Investors, In 2014 the global economy remained very volatile across our major markets, both traditional and emerging. International events and crises did not spare our heavily globalized economy. Fluctuations in major currencies, elections and new Government regimes coming into power, the introduction of special incentives to attract FDI, a call for more transparency in cross-border investments, the tightening of rules in China and Greece’s bankruptcy have all had their respective impact, directly or indirectly, on Mauritius. Today, there is certainly no lack of competition among countries, whether developed, developing or even LDCs, for foreign direct investment. Against these challenges, the Board of Investment has been able to assist a number of foreign companies to successfully set up in Mauritius across various sectors thus generating a number of jobs, while accompanying many Mauritian companies to further extend their footprint across mainland Africa during the year. The strategies adopted at the start of 2014 comprised a highly targeted investment promotion approach, an enhanced visibility in our important markets as well as the improvement of our business environment. Attracting FDI We have seen the materialization of major projects across a range of sectors. We pursued our market-focused approach in attracting overseas companies and investors in priority sectors and industries where Mauritius has a competitive edge. Industry-focused conferences including the BioAfrica 2014, MIKIF 2014 and Private Equity Mauritius 2014 were equally organized in view of supporting our promotional strategies. As a result, our traditional sectors comprising tourism, real estate, freeport and logistics, manufacturing and the agro industry have all experienced growth with the implementation of new projects. In parallel, our focus has been on attracting global companies to set up in emerging and new economic sectors, including ICT and BPO, financial services, seafood and aquaculture, medical research and biotech and other innovation-driven business segments. These projects have materialized through investments estimated at MUR 10 billion with the creation of some 2,500 new jobs. Our traditional markets primarily Europe and South Africa remained our key sources of foreign investments. The market diversification strategy implemented during the last few years has also yielded positive results. Put together, Asia and Africa, excluding the Republic of South Africa, accounted for around 19.5% of our total FDI inflows in 2014. Africa Strategy & Outward Investment Our strategy also involved accompanying Mauritian companies with the objective of extending their operations and economic space across Africa. Consequently, through its Africa Centre of Excellence, BOI has been very active in mainland Africa promoting business and investment possibilities through the organization of promotional events in Ghana, Gabon, Madagascar and South Africa. We equally organized the first edition of Mauritius Africa Partnership Conference (MAPC) which saw the participation of eminent speakers including primarily several Ministers from Africa and Asia. MAPC has helped to create a platform for interaction among the IPAs that attended the event through the sharing of information about projects in the respective countries. At the same time, Mauritius has been extensively promoted through a number of initiatives as a leading financial centre and global services delivery platform of choice midway between Asia and Africa. The increase in the registration of Africa-centric global business companies in Mauritius is a clear testimony to the increased efforts that have been deployed over the years in positioning Mauritius as an efficient business centre for Africa. 4 Enhancing links with partners With the ongoing support and collaborative efforts of main stakeholders and associations, both locally and overseas, including our embassies, foreign consulates, international chambers of commerce, industry associations and BOI honorary representatives, we continued to work hard to showcase the potential of Mauritius as a leading investment destination and financial centre of substance. In view of enhancing our network with sister investment promotion agencies, we signed 8 new MOUs with IPAs of Hong Kong, Russia, Cameroon, Burundi, Ethiopia, Burkina Faso, Tunisia and the Marshall Islands respectively, thus bringing the total MOUs to 34. Development of new economic pillars The implementation of projects identified under each of the seven priority areas of the Ocean Economy Roadmap has been a key focus for BOI in 2014. These priority areas include exploration and exploitation of our seabed and subsoil, fisheries and aquaculture activities, deep ocean water applications, marine services, seaport-related activities, marine renewable energies and ocean knowledge. Moreover, BOI equally pursued its strategy for enhancing the development of the creative industry through the marketing of the Film Rebate Scheme in 2014. PR Campaign Developing and nurturing the image of Mauritius as a clean investment destination and financial centre have been one of our key aims. In this context, BOI recruited the services of Mercury Public Affairs LLC in the USA, and renewed the contract of Ogilvy Public Relations in India. Newgate was also appointed to develop a clear communication and messaging strategy for the Mauritius Financial Centre. Doing Business Environment BOI’s internal efficiency has been enhanced through the implementation of an online system for the registration and incorporation of new companies. The process can be effected online and the incorporation certificate issued within 2 hours. Besides, BOI has worked closely with other relevant departments, namely the Registrar General’s department to expedite transactions relating to online services pertaining to eSubmission, eTaxation, ePayment, eDelivery for movable and immovable property as well as with local authorities for the timely issuance of Building and Land use Permits. By virtue of its geographical position Mauritius is at the doorstep of one of the most promising continents with a largely unexploited market base. With the continued support of stakeholders across various segments, we are confident that BOI will continue to play a key role in driving investment and job creation. Ken Poonoosamy Managing Director 5 OPERATIONAL REVIEW 3. 6 7 3.1 Overall Performance A) Investment Landscape After a slowdown in the flow of Foreign Direct Investment in 2013, inflows showed signs of growth with a rebound of 2.7% in 2014 rising to MUR 14.151 billion (Figure 1). Foreign Direct Investment for the 4th quarter only amounted to MUR 4.052 billion. The surge of FDI is attributed mainly to the dominant services sector and a 70% increase of FDI inflows from Europe compared to 2013. Foreign Direct Investment 25,000 20,373 MUR MILLIONS 20,000 15,000 14,151 13,766 12,894 10,000 5,000 0 2011 2012 Figure 1: Foreign Direct Investment 2013 2014 Source: Bank of Mauritius FDI figures for 2011, 2012 and 2013 include reinvested earnings and shareholders’ loans and are not comparable to 2014 figures which will be revised once the Foreign Assets and Liabilities Survey has been conducted by BoM. Foreign Direct Investment by sector The traditional sectors, namely accommodation and food services activities, real estate activities and financial and insurance activities attracted 91% of the total investment (Figure 2). ICT 1% Healthcare Construction 4% Others 1% 3% Acc. & Food services 34% Real Estate 44% Financial services 13% Figure 2: Foreign Direct Investment by sector 8 Source: Bank of Mauritius Real Estate activities attracted the major share of investment (MUR 6.178 billion) accounting for 44% of FDI while the accommodation and food services activities recorded a substantial increase with investment to the tune of MUR 4.893 billion and the financial sector contributing 13% of total FDI (MUR 1.815 billion). The healthcare sector has recorded an inflow of MUR 532 million in 2014. Investment in the ICT sector is on the uptrend with FDI amounting to MUR 141 million while the manufacturing sector and agriculture and fishing recorded inflows of MUR 76 million and MUR 19 million, respectively, showing signs of decline. FDI in the construction sector almost halved (MUR 376 million) in 2014 compared to 2013 and is on constant decline since 2012. Foreign Direct Investment by Geographical Origin Europe remains the main source of FDI contributing to 58% of total FDI. Inflows of MUR 2.440 billion were recorded from Asia & Oceania (17%) positioning the region as the second largest contributor followed by North America (15%) with an almost ten-fold increase compared to 2013 with nearly 80% of that coming from the United States (Figure 3). A 40% decrease in FDI flows from Africa was noted in 2014. 58% 17% 10% 15% Europe Asia Africa North America Figure 3: Foreign Direct Investment by Geographical origin Source: Bank of Mauritius The flux of investment from Europe and North America is on the rise as compared to 2013 and substantiates the marked increase in FDI in 2014. Foreign Direct Investment by country of origin France was the leading investor in Mauritius (25%) in 2014. FDI from the United States is on the uptrend and has surged from MUR 219 million in 2013 to MUR 1.636 billion and currently accounts for 11.6% of total FDI (Figure 4). The flux of FDI from the Middle East, namely from UAE has surged to MUR 621 million (27.3%) as compared to MUR 488 million in 2013. A similar trend is noted for FDI from the UK, increasing from MUR 642 million in 2013 to MUR 892 million in 2014. However, a marked decline in FDI has been noted from China (-78%) and South Africa (-41%) in 2014 compared to the previous year. FDI by country of origin MUR MILLIONS India China UAE Luxembourg UK South Africa United States France 0 500 1000 1500 2014 Figure 4: : FDI by country of origin 2000 2500 3000 3500 2013 Source: Bank of Mauritius While FDI from France, United States, UAE, UK and Luxembourg is on the rise, significant decrease in FDI has been recorded from China, India and South Africa in 2014. Some diversification has been noted with regard to our source of FDI with higher inflows from Middle East and Asia. 9 Outward Investment Outward investment in 2014 amounts to MUR 3.480 billion representing a 45% decrease from the previous year (Figure 5). Outward Investment 7,000 MUR MILLIONS 6,329 6,101 6,000 5,549 5,000 4,000 3,480 3,000 2,000 1,000 0 2011 2012 Figure 5: Outward Investment 2013 2014 Source: Bank of Mauritius Direct Investment Abroad by sector (%) Local investors have invested in the ICT sector in 2014 with outflows amounting to MUR 1.165 billion representing a third of total investment abroad. Others 4% ICT 33% Outward investment by sector 2014 (%) Healthcare 15% Acc. & Food service 13% Financial services 17% Manufacturing 6% Real estate 12% Figure 6: Direct Investment Abroad by sector of activity Source: Bank of Mauritius Outward investment in the Financial Services Sector (MUR 579 million) accounts for 17% of total outflows. Investment in the healthcare sector has surged to MUR 531 million (15.3%). A similar trend has been observed for the manufacturing sector (6.4%) and outward investment in the agriculture, forestry and fishing sector has decreased from MUR 527 million in 2013 to MUR 46 million in 2014. Investment outflows in the real estate activities has known a 50% decrease compared to the previous year and accounts for 12% of total outward investment. The most significant decrease has been noted in the accommodation and food service activities from MUR 3.044 billion in 2013 to MUR 440 million in 2014. 10 Direct Investment Abroad by Geographical Region (%) Outward investment to Europe in 2014 was to the tune of MUR 2.085 billion (60%) with France (MUR 669 million) being the prime investment destination. Africa has been host to investment valued at MUR 950 million representing 27% of total outflows for the same period. 60% 10% 27% 2% Europe Asia & Oceania Africa North & Central America Figure 7: Direct investment abroad by country of origin Source: Bank of Mauritius Outward investment to Asia & Oceania has decreased from MUR 798 million in 2013 to MUR 335 million in 2014. The United Arab Emirates has attracted MUR 189 million of investment from Mauritius and is the highest recipient of outward direct investment in the Asia region. The outflow of investment to North and Central America has declined from MUR 203 million in 2013 to MUR 76 million in 2014. B) Occupation Permit Opening up the economy The Occupation Permit Scheme introduced in 2006, pursuant to the enactment of the Business Facilitation Act, opened up the country to foreign investors and talents. The objective was to facilitate the process of issuing work/residence permits to foreign nationals wishing to work in Mauritius making the country an attractive destination for the skilled and highly skilled migration elite specifically. Since the introduction of the Occupation Permit Scheme in 2006, 16,029 Occupation Permits and 1,321 Residence Permits have been delivered to foreign nationals. For the period January to December 2014, 2,604 permits were issued by the Occupation Permit Unit. Almost 80% of applications received are in the professional category, whilst 9% are investors, 4 % are self-employed and 7 % are under the retired non-citizen category. By the end of December 2014, there were a total of 4,585 holders of Occupation and Residence Permits. The chart below provides an overview of the number of Occupation and Residence Permits issued as at December 2014. Figure 1: Number of OP/RP issued Figure 2: Active OP/RP as at December 602 429 2604 2170 2100 2171 2008 2009 2375 181 2019 2088 1543 284 2006* 2007 2010 2011 2012 2013 2014 3373 INVESTOR PROFESSIONAL SELF EMPLOYED RETIRED NON-CITIZEN Source: Board of Investment 11 It has been observed over the years that our traditional partner France (33%) followed by India (22%) remains an important source of investment, talent and skills for our economy. Nationalities 1600 1400 1200 33% 1000 800 200 0 FRENCH SOUTH AFRICAN INDIAN Figure 3: Top 5 Nationalities as at December 2014 6% 9% 400 6% 22% 600 CHINESE BRITISH Source: Bank of Mauritius The chart below provides percentage in terms of the number of Occupation Permits issued by sector of activity. Sector of activity 20% ICT & Media Hospitality & Airline Manufacturing 13% Financial Services 6% Professional Services 6% Knowledge 5% Trading 4% Property Development Freeport & Logistics 3% Medical 1% 1% Creative 1% Seafood & Agriculture Film Industry 0% 1% Energy 11% 21% Source: Board of Investment The main sectors of activities are the ICT & media, hospitality and airline industry and financial services. • Out of the 244 Occupation Permits issued under the Investor category, 21% are engaged in the ICT & media, 17% in trading, and 14% in the financial services sector. • 24% of the professionals registered are in the hospitality & airline industry, 23% in the ICT and media sector and 15% in the financial services sector. • As for the self-employed, it is noted that most of them provide professional services (48%), in ICT and media sector (19%). 12 A foreign national, holding an Occupation/ Residence Permit may acquire an apartment in a building complex comprising ground plus 2 floors for residential purposes. As of 31 December 2014, 22 authorizations for acquisition of apartments were granted to 5 investors, 7 professionals and 10 retired non-citizens. Moreover, 162 Permanent Residence Permits (PRP) have been issued to foreign nationals: 22 to Investors, 2 to Self Employed, 48 to Professionals and 90 to Retired Non-Citizens. C) Forging new institutional relations and enhancing collaboration As part of its strategy to further promote investment and strengthen institutional relationships, BOI has, since its establishment, adopted a preemptive approach in forging and encouraging a strong collaborative framework with its counterparts worldwide. In 2014, BOI concluded a total of 11 Memorandums of Understanding (MoUs) among which 8 were signed with Investment Promotion Agencies and the remaining 3 with the Bureau of Commerce of Qingdao Municipal Government of the People’s Republic of China, Nomura Research Institute of Japan and Casablanca Finance City Authority of Morocco, respectively. For the year 2014, 8 MoUs were signed with the Investment Promotion Agencies of Russia, Hong Kong, Cameroon, Burundi, Ethiopia, Burkina Faso, Tunisia and the Republic of Marshall Islands. These collaborative agreements essentially aim at promoting exchange of investment-related information and providing the necessary support in promoting and facilitating investment as well as organisation of overseas missions. In addition, the MoUs provide an ideal framework which facilitates the development of exchange programmes with specific focus on capacity building in terms of exchange of technical expertise, knowledge and training opportunities. BOI has signed MoUs with 34 Investment Promotion Agencies since 2003. 13 3.2 14 Sectoral Review & Key Projects In 2014, the Board of Investment facilitated a number of projects covering various sectors : • Ocean Economy • Financial Services • Manufacturing • Seafood / Aquaculture • Agro Industry • Film Industry • Freeport • ICT-BPO • Real Estate & Tourism 15 Ocean Economy Following the work conducted by some 20 agencies involved in the development of the Ocean Economy, eight priority areas were identified, namely Seabed Exploration for Hydrocarbon and Minerals, Fishing, Seafood Processing and Aquaculture, Deep Ocean Water Applications (DOWA), Marine Services, Marine Biotechnology, Seaport related Activities, Marine Renewable Energies and Ocean Knowledge. While the medium and long-term strategies are being developed by the 8 advisory councils responsible for each of the priority areas, quick wins identified for this new sector are being implemented. Seabed Exploration for Hydrocarbon and Minerals Under the leadership of the Prime Minister’s Office a legal, fiscal and regulatory framework for the exploration and exploitation of hydrocarbons and minerals in our maritime zone is being developed. BOI has played an important role in this initiative, assisting in the structuring of the project and participating in the drafting of key documents. The project is expected to come to fruition by mid-2015, with the launch of expression of interest for bids. Fishing, Seafood Processing and Aquaculture In 2014 the target of 60,000 tonnes of fish by transshipment has been met. In addition substantial progress has been made to develop aquaculture activities with the proclamation of 20 additional sites. A reduction in the leased fees was also noted. The combined effects of those actions are expected to reflect on aquaculture production volumes. BOI also partnered with “Agence Française de Développement” (AFD), and the Ministry of Ocean Economy, Marine Resources, Fisheries, Shipping and Outer Islands for two studies to be carried out, namely (i) attracting investment in new seafood business activities and (ii) accelerating the development of sustainable aquaculture industry in Mauritius, with recommendations to move this sector forward by mid-2015. Deep Ocean Water Applications (DOWA) As the institution responsible for the development of DOWA, BOI worked with the relevant stakeholders in view of the proclamation of the relevant section of the Maritime Zone Act (MZA) which makes provision for DOWA activities. Moreover, BOI also worked on the regulations for prescribed DOWA activities with the first project being expected to take off in 2015. 16 Marine Services (Ship Registry) BOI and the Shipping Division worked out a joint marketing programme focused on increasing the visibility of the Mauritius Open Registry through targeted marketing and awareness campaigns with the objective of doubling the registry roll to 300 vessels by end 2015. Marine Biotechnology Five public and one private sector institutions are currently involved in marine biotechnology, namely the Mauritius Oceanography Institute (MOI), Albion Fisheries Research Centre, the University of Mauritius (UOM), the Centre For Biomedical and Biomaterials Research (CBBR), the Mauritius Research Council and Ireland Blyth Ltd. The public institutions have been assigned to develop a common protocol for sharing of research data and focus on specific fields of study. BOI is working closely with the relevant partners for promoting the Mauritius Marine Biotechnology sector and in the medium-term assist in the marketing of possible breakthrough in research applications on local sponges and microalgae. Seaport-related Activities Seaport-related activities such as bunkering, transshipment and cruise activities will be considered for development and will be driven by the Mauritius Ports Authority. The Mauritian seaport holds attractive value propositions and is competitive as a bunkering port, transshipment services as well as home porting and destination stop for cruise lines. Bunkering activities have been partly liberalised in 2014 and, in addition, infrastructure works in view of increasing the port cargo handling capacity are expected to be completed by end 2016. The annual throughput capacity is expected to increase to 750,000 TEUs from a current 550,000 TEUs and a dedicated fishing quay is under consideration. Marine Renewable Energies In order to encourage young graduates to develop commercial applications for the Ocean Economy, the creation of an Ocean Technology Incubator (OTI) was approved by the BOI board. The OTI will cater for some 10 projects within the next three years. Ocean Knowledge BOI has agreed to assist in promoting the Ocean Economy under the export of services umbrella. In 2015, it is expected that BOI and UoM will work closely to promote relevant courses in the region. 2014 was a fruitful year for the financial services sector, characterized by the rigorous marketing and facilitation initiatives undertaken by BOI, both on the national and international fronts. In 2014, the financial services sector contributed 10.3% to GDP, representing a value addition of around MUR 35 billion to the economy. Financial Services For the year under review, there were more than 200 companies engaged in the provision of high-level financial services, a figure which is expected to grow further in 2015, thereby creating more jobs and increasing the level of sophistication of the sector. The sector directly employed more than 15,000 high-skilled professionals, including around 150 foreign executives. This sector witnessed a substantial increase in FDI from MUR 716 million in 2013 to MUR 1.8 billion in 2014. With the aim of increasing the visibility of the Mauritius International Financial Services Center (MIFC), BOI pioneered a series of initiatives, both locally and internationally. On the local front BOI supported the Islamic Financial Services Board Summit which was held for the first time in Africa. The aim was to reflect on the rapid growth of Islamic finance during the last decade. BOI also supported the organization of the first edition of Mines and Money Acess to Africa in Mauritius and also organised the 4th edition of the Private Equity Conference in Mauritius. On the international side to enhance the visibility of Mauritius as Financial Services Centre, BOI participated at Mining Indaba, China Offshore Summit and Mines and Money London. BOI facilitated a number of projects in Mauritius in the banking sector and assisted several entities licensed in the global business sector through technical committees with regulators and stakeholders in order to address issues and advise them as to how to increase substance. Some of those technical committees’ work culminated in improvements in the regulatory landscape, either through amendments of existing laws or through enactment of new ones. On the Insurance side, in order to enlarge the spectrum of insurance services in Mauritius, BOI worked in close collaboration with the Financial Services Commission and the Association of Trust and Management Company (ATMC) to provide inputs for the development of a new law dedicated to captive insurance. With regard to Capital Markets, BOI worked closely with the stakeholders for the development of a conducive environment for the listing of specialist debt instruments such as Eurobond in Mauritius, and for increasing the attractiveness of Mauritius to mining companies for capital raising and to international companies for IPOs launching. STATISTICS Contribution to GDP value addition of around MUR 35 Billion to the economy 10.3% Foreign Investment more than 1.8 MUR Billion 17 Manufacturing 2014 was an exciting year for the manufacturing sector. New activities have emerged in the Mauritian manufacturing landscape providing a new thrust to the industry. New industry sub-sectors such as flexible packaging, lubricant blending, gold casting and medical devices are now complementing and consolidating the current manufacturing base. Moreover, 2014 has witnessed the launch of new projects and important expansion plans of existing companies. During the course of 2014, international manufacturing groups such as Sun Packaging (Oman – Flexible Packaging), Matsushita Greatwall (Singapore – Mattress & Furniture), Knita CC (South Africa Textile) and Sivoko Lubes (India – Motor Lubricants) started their operations in Mauritius. Moreover, existing companies, namely Island Brush Ltd (France – Paint brush), BGH Ltd (France - Watch Parts), Mauriflex (France - Flexible Packaging), Apollo Tubes (India - Steel Tubes), Metal Can Packaging (Indonesia - Metal Cans) and Natec Medical (France - Medical Devices) engaged into ambitious expansion projects consisting of land acquisition, construction of new industrial premises and acquisition of new equipment. These major expansion projects testify to the sustainability of manufacturing companies which are now targeting an increased production capacity, through higher productivity and efficiency. It is estimated that more than MUR 300 million have been invested in those expansion projects and more than 150 jobs created. It is also encouraging to see that foreign companies recently established in Mauritius are anchoring their positions in the Mauritian manufacturing landscape by improving product offering and diversifying their services. For example, Stern Casting Ltd, a South African company established in 2013 and based in Petit Raffray, is now supplying minted gold bars to local jewelers. In the long term, the company wishes to develop all the annexed gold refinery activities in Mauritius with the objective of making the island a hub for gold refining and trading. It is worth highlighting that important high value-added manufacturing projects will materialize in 2015, namely in the area of sunglasses and PET bottle manufacturing. BOI is already facilitating some 4 projects. STATISTICS New Players from Oman, Singapore, South Africa, India More than MUR 300 Million invested in expansion projects 18 2014 proved to be a positive year for the seafood and aquaculture industry. The sector was boosted by the expansion of existing projects in the aquaculture sector and the establishment of new projects in the fishing sector. The Ferme Marine de Mahebourg (FMM), which has been involved in marine fish farming since 2002, started its expansion activities in 2014. FMM currently operates 2 farms in the south-east lagoon of Mauritius and is extending its activities over 3 additional fish farming sites. Seafood / Aquaculture Xinfa Company Overseas Ltd began its first campaign in 2014. The company operates 5 purse seine vessels, all of which sail under the Mauritian flag and are principally engaged in tuna fishing. The industry also reached an important milestone in ensuring its long-term viability in 2014. Indeed an agreement was finally signed with the Federal Service for Veterinary and Phytosanitary Surveillance of Russia, allowing Mauritius to export its fish products to Russia. This breakthrough is extremely important as it will enable the country to diversify its seafood export markets which have till now been predominantly EU centric. With the increasing pressure on the need to limit fish catches in the Northern Hemisphere and rising demand for seafood products, the Mauritius seafood sector has benefited through its key geographic location in the Indian Ocean. The industry achieved a laudable performance in 2014, in terms of export value, volume and investment. Indeed the industry ended the year on a better note with an export volume amounting to 128,212 tonnes for 2014, compared with 108,420 tonnes in 2013, an increase of 18% (19,792 tonnes). In terms of value, seafood exports reached MUR 13.9 billion in 2014 which represented a decrease of 4.4% over the 2013 export value of MUR 14.6 billion – the decrease being attributed to the declining price of tuna on the world market. Prospects Development of an integrated fishing operation: BOI has received an expression of interest from an international group to invest in an integrated fishing business comprising fishing vessels, processing and storage facilities and fish logistics infrastructure. The project which has an implementation period of 3 years is expected to commence in 2015. In addition, both local and foreign operators have expressed interest to invest in aquaculture. Accordingly, the process for the issuance of development permits has been initiated. The local private sector has also expressed interest to develop new seafoodrelated infrastructure such as private fishing quays and processing facilities. Major developments are expected in the seafood and aquaculture space in 2015. STATISTICS Seafood exports MUR 13.9 billion export volume 128,212 tonnes 19 Agro Industry 2014 has turned out to be an eventful year for the agro industry. Mauritius was the recipient of the UNDP-funded program for the development of sustainable agricultural practices. Accordingly, a sensitization exercise was carried out by the Food and Agricultural Research and Extension Institute on natural farming techniques for the promotion of the use of natural products in food-crop production. The agro industry furthermore continued its efforts to consolidate and diversify its activities with the elaboration of value-added products with a view to achieving sustainable growth. In this context the process for commercial export of agri biotech products was initiated in 2014. Aadicon Biotechnologies Ltd, engaged in the production of agricultural biotech products such as frozen animal semen, biofertiliser and bio control agents, started commercial exploitation of those products in 2014. The company secured export orders from Uganda and is also actively working towards securing additional markets in Nigeria and Tanzania. Development of a poultry processing facility: BOI has received an expression of interest for the setting up a processing facility to develop high value-added poultry products and the investment amounts to around MUR 240 million. The project targets the export market. Mauritius produces around 40,000 tonnes of poultry annually and there are significant opportunities to add value to the local products. Seeds production: Involves the development of a seeds production facility for the production of onion, maize and sweet corn seeds. The company aims to invest around MUR 30 million. Mauritius can potentially develop into a seeds production centre for Africa, particularly because of the country’s disease-free status, making the island an ideal production platform. STATISTICS Investment in Poultry processing facility 240 MUR million Investment in Seeds Production MUR 20 30 million Film Sector Launched in 2013 the Film Rebate Scheme (FRS) has now gained momentum. The scheme makes provision for a 30% rebate to local and foreign film producers on their qualifying production expenditures. The scheme is a key enabler for the development of the cinematographic industry as an important pillar of the Mauritian economy. The scheme has helped to develop several activities in the film industry, namely media equipment rental companies, model and casting agencies, transport companies, catering business, guest house providers, amongst others. It is estimated that these companies have benefited approximately MUR 100 million in terms of savings on expenses to date. 2014 has been a thriving year. It has witnessed the shooting of big productions such as Humshakals, Villain, Shaukeen, Break up Guru, Stranded in Paradise and many more. MUR 450 million of qualified production expenditure were recorded by end 2014 through the completion of 20 productions under the FRS. 2014 was also characterized by a remarkable growth regarding the number of projects that have been approved and completed as compared to 2013. Projects Approved Projects Completed 24 9 6 2013 2014 Despite India being the main sourcing market, the Film Rebate Scheme has also attracted productions from other countries such as South Africa, China, Korea and Germany. Productions have ranged from various categories such as films, commercials and TV programs. Coupled with the scheme, hassle-free shooting experience, and the visually pleasing and vibrant shooting locations are strong pull factors that are encouraging international productions to expand their endeavours in Mauritius. Savings of MUR 100 million 20 Going through the value chain, the next endeavour is to ensure that strategic initiatives are in place to empower the local talent to grow the industry and support foreign productions. Thus, in October 2014, BOI collaborated with the Fashion and Design Institute for the development and servicing of a three-month training program on film editing for potential local editors. 45 people have been successfully trained and are ready to offer their services to the film industry. 20 productions completed 450 MUR million qualified production expenditure by end 2014 21 The Mauritius Freeport has since 1992 played a pivotal role in positioning Mauritius as a leading regional trading, logistics value-addition and distribution hub. Mauritius is today home to global operators looking at exploring the regional and international markets. The Mauritius Freeport ranked among the top 15 free zones in the Global Free Zones of the Future 2012/13 report published by FDI Magazine. range of products in terms of its facilities for intra and extra regional trade. The economic activities generated in the sector are impressive. The Freeport hosts companies involved in regional trade, break bulk operations, simple assembly and transformation, LPG storage and re-export, processing of seafood products for leading global markets in the EU, the US and Far East, as well as light assembly and manufacturing for exports. In 2014, with the continued development of projects, the Freeport sector has contributed massively to increase the trade performance in terms of value and volume from MUR 23 billion and 347,000 tons in 2013 to MUR 47 billion and 579,000 tons in 2014. Although the Freeport sector contributes only 0.5% to GDP, it has been growing at a sustained pace in excess of 3% over the last 5 years. There are 260 active companies comprising Freeport Operators and Developers employing more than 3,000 people. Today, the Mauritius Freeport provides a modern integrated marketing, distribution and logistics platform that offers a wide More importantly, the Freeport Sector has multiple spill-over effects on various sectors of activity of the economy which include retail trade, transport, logistics, professional services, construction, engineering, port and airport-based activities, banking and insurance, amongst others. By taking advantage of its strategic position mid-way between Asia and Africa, the Mauritius Freeport is poised to become an integral part of the new economic architecture and it is well placed to catch the tail wind of this new phase in global trade by building sophisticated networks of trade and financial links. Freeport Key projects that materialized in 2014 are: • Petredec (Mauritius) Ltd which set up as a Private Freeport Developer. In April, the company inaugurated its new LPG storage facilities at Mer Rouge. Investment in the project has been to the tune of MUR 1.2 billion. • Royal Cresta Paints (Mauritius) Ltd started its minor processing plant for manufacturing of paint products in the Freeport. Investment in the project has been to the tune of MUR 23 million. • Africasia Electronics Manufacturing Ltd was issued with a Freeport certificate for the assembly of television. Proposed investment of the project amounted to MUR 45 million. 260 active companies 3,000 jobs 22 The ICT-BPO sector which is a large contributor to the GDP of the country, is currently in a maturity phase with an estimated contribution of 6.4% to GDP in 2014, an estimated growth of 6.5% for 2014 while mobile penetration reached a 121.7% threshold in 2013. This indicates that Mauritius has been consolidating its position as the preferred ICT-BPO destination for local and international entrepreneurs. Furthermore, the industry has registered diversification with new segments being developed. Local operators are offering more services and products in addition to their main areas of focus. For example, several traditional BPO non-voice organizations are now offering voice support and even IT outsourcing services such as software development and mobile applications development. The BPO industry has moved up the value chain with 25% of BPO non-voice companies offering high-end Knowledge Process Outsourcing services. The industry has proved its capacity to accelerate both social cohesion and economic development, eventually leading to a higher standard of living. Foreign direct investment has played a key role in this context, with large multinationals providing employment to a considerable number of individuals. In 2014, reputable international ICT-BPO companies have set up in Mauritius including: 1. Techno Brain 2. Besedo A CMMI Level 3 and Africa’s leading custom software application provider offering innovative IT Solutions, IT Education and Training and BPO / IT Enabled Services to NGOs, Government and Private organisations globally. Headquartered in Nairobi, Kenya, Techno Brain is present in Burundi, Ethiopia, Ghana, India, Malawi, Mauritius, Mozambique, Myanmar, Namibia, Nigeria, Rwanda, Saudi Arabia, South Africa, South Sudan, Swaziland, Tanzania, UAE, Uganda, UK, USA, Zambia and Zimbabwe. Techno Brain is a people-oriented company that provides its personnel with conducive work environment and opportunity to lead and grow. The company has invested MUR 15 million in the Mauritian office and employs 10 persons. The market leader in quality assurance moderation for classifieds with more than 10 years’ experience in reviewing user content, vetting it against guidelines and brand direction, and taking appropriate action - approving, rejecting, or escalating the post. Besedo moderation protects International brands with high-speed human vetting of user content. Besedo Mauritius employs around 30 persons. The company has made an initial investment of MUR 10 million. ICT - BPO Industry contribution to 20,000 jobs GDP 6.4% 23 Real Estate Foreign Direct Investment (FDI) in Real Estate sector amounted to MUR 6.2 billion 2014. Accommodation and food service activities attracted FDI worth MUR 4.9 billion while the Construction sector registered investments to the tune of MUR 376 million. 2010 14,151 11,447 13,766 7,745 5,551 8,352 11,697 12,894 13,948 20,373 FDI INFLOWS 2010 - 2014 (MUR MILLION) 2011 2012 FDI inflow in HPD 2013 2014 Total FDI Source: Bank of Mauritius Total sales of luxurious residential units surpassed 1,400 units in December 2014 with over 265 deeds of sale signed during the year. Investment in IRS/RES units 1600 No of units 1400 1200 1000 800 600 400 200 0 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 05 2006 2007 2008 2009 2010 2011 Cumulative Sales 2012 2013 2014 Quarterly Sales Source: Board of Investment A record number of new property development projects were presented in 2014. Showcase real estate projects range from ambitious initiatives in the luxurious residential sector with 23 developments approved and planned by property developers under the IRS and RES. 16 RES projects are currently being developed out of which 6 IRS projects are being implemented in phases. Major high-end residential projects under the IRS and RES are planned to kick off. The Parc de Mont Choisy IRS project, expansion of the Azuri Village, La Tourelle IRS at Black River, Monroze IRS at Baie du Cap, amongst others, are projects planned for development. A major housing project, under the Affordable Housing Empowerment Programme, planned by the Sugar Investment Trust (SIT) is scheduled for development in New Grove in 2015. Tourism Tourist arrivals in 2014 witnessed a year-on-year increase of 4.6% compared to 2013 with 1,038,968 tourists visiting Mauritius last year. Figures released by Statistics Mauritius indicate that Europe remains our main source market with over 54.9 % of arrivals (+4.3% increase from 2013) and with France as the main source country with 243,665 arrivals. An impressive growth (increase of 51.2%) was recorded on the Chinese market which is now the fifth tourism source Mauritius welcomed 63,365 Chinese visitors in 2014 against 41,913 in 2013. The Indian market indicated a strong growth with 61,167 Indian travelers visiting Mauritius against 57,255 in 2013, representing an increase of 6.8%. Gross tourism earnings grew by 6.7% from the previous year, increasing from MUR 41.5 billion to MUR 44.3 billion. Total direct employment in the tourism sector is estimated at over 28,700. 24 Tourist arrivals by country (%) 2014 Italy 4% Germany 8% France 30% India 8% China 8% South Afica 11% Reunion Island 17% United Kingdom 14% Source: Statistics Mauritius 2014 saw investments by prestigious international brands in the Mauritian tourism sector. Riu Hotels & Resorts, a company based in Spain and operating a chain of 100 hotels and resorts across 16 countries, and TUI A.G, a German multinational tourism company, completed the takeover of three hotels in Le Morne previously known as Indian Resort, Le Mornea and Le Moreva. The project represents an investment of nearly MUR 3.3 billion and will see the hotels reopen as Hotel Riu Le Morne Resort in February 2015. An estimated 360 direct jobs are expected to be created. The 5-star Le Touessrok Hotel, located in Trou d’Eau Douce, was re-launched as the Shangri-La Le Touessrok and Spa in August 2014, following an investment of over MUR 800 million in the hotel by Shangri-La Hotels and Resorts, a premier Asian hotel group based in Hong Kong. Shangri-La Hotels and Resorts owns and manages over 80 hotels under the Shangri-La brand across the globe. La Plantation d’Albion Club Med resort, a 266-room hotel situated in Albion, was acquired for MUR 2.2 billion by W.P Carey and Company LLC, a real estate investment trust based in USA. The company owns and manages a diversified global portfolio of approximately 1,020 properties in 21 countries. The hotel will continue to operate under the Club Med banner. FDI in Real Estate 28,700 MUR 6.2 billion direct jobs FDI in Accomodation & Food sales of luxurious residential units FDI in construction MUR 400 MUR 4.9billion 376 million 25 3.3 Marketing & Promotional Initiatives FDI inflows during the year under review increased by 48% compared to 2013 creating well-paid jobs and diversifying the economic base of the island. Despite the persistent economic turmoil that has rocked the business world, Mauritius realised some good results. Countries like France and UK have maintained their investments flows to Mauritius while new sources of investment were recorded, namely from countries like US, Luxembourg and United Arab Emirates. New industries like Healthcare & Life Sciences have attracted investments while sectors like Hospitality, Real Estate and Financial Services maintained their position as major recipients of foreign capital. In 2014, the Board of Investment has been active on the international front and adopted a three-pronged strategy focused on 1. promoting Mauritius as an investment destination through an industry-targeted marketing strategy to attract projects in various sectors; 2. enhancing the visibility of the country through a sustained PR campaign and image building; and 3. promoting export of services. Key initiatives undertaken in 2014 included: • Organization of 42 investment promotion initiatives comprising road shows, investment forums, international conferences, targeted missions, ministerial visits & local events • More than 2,000 cold targeting across markets • Enhancing the visibility of Mauritius/image building through communication campaign. As a result of which some 26 interviews & adverts in local and international media were published • Retained the Services of the following PR agencies: Mercury for USA, Ogilvy for India & Newgate Communications for a global communication campaign • Generation of 317 Leads and 35 key projects across sectors (ICT, Financial services, fisheries, manufacturing & film industry) • Materialisation of 20 projects with a realized value exceeding MUR 308 million • Organisation of three country weeks by ACE Review of the performance of our key markets In 2014 BOI adopted a targeted approach with the objective of generating leads and building a pipeline of projects. In this respect in all the regions, in addition to participation in events and conferences, BOI conducted a series of targeted missions that have helped to generate some 317 leads. Our efforts were geared to consolidate our presence in traditional markets such as UK, France, South Africa and India, while reinforcing our strategy with the Asia Pacific region to nurture our economic relations and bolster the position of Mauritius as a preferred investment platform in the region. Some new European market segments were targeted in order to enable us to maximize our reach. BOI also initiated some actions in the US with a timid presence on the market. However, with the commitment of the US Government to enhance trade and investment with Africa, this market can offer significant opportunities. 26 EUROPE After a double-dip recession since 2008, there are genuine signs that a more lasting recovery is now taking place in the EU and the euro zone. Growth turned positive in some countries in 2014 while outlook has improved in the more vulnerable ones. On the other hand, Russia and Western Europe have encountered a low economic performance. Given the economic situation prevailing in the old continent, many companies especially from the Western Europe are looking at relocating, and there is an increasing interest for investment in Africa. According to FDI Markets, FDI from Western Europe to Africa amounted to USD 47.7 billion compared to USD 21.3 billion in 2013. Europe is one of our island’s strategic partners and an important source of Foreign Direct Investment. FDI inflows have been sustained over the last 5 years and in 2014 FDI amounted to MUR 8.2 billion, representing 58% of our total FDI. Compared to 2013, this represents a two-fold increase and France maintains its position as the leading FDI provider to Mauritius. Since 2013 and in order to consolidate our offerings on the European market, BOI has been very active on the European markets through dedicated country desks. In view of broadening our business network across the continent, BOI further consolidated its relations with its counterparts, the business chambers and the industry associations in Europe and close working relations have been established with most of the leading associations. France has been the highest FDI provider with FDI averaging MUR 3 billion over the last 5 years, reaching MUR 3.5 billion in 2014. Acknowledging the importance of this market, BOI engaged intensively in a promotional campaign to ensure a sustained presence in France while tapping new cities and focusing on various sectors. BOI participated in the following key international forums to showcase the investmemt opportunities while positioning Mauritius as the platform for Africa. • With a view to promoting the opportunities in the Real Estate sector, BOI led a delegation of 15 property developers to participate in the Salon National de L’Immobilier, held in Paris from 3 to 6 April 2014. The exhibition provided a platform for networking to the promoters, BOI conducted a series of targeted one-to-one meetings. • Pursuant to the Government objective to develop the Ocean Economy, BOI participated in the Sea Tech Week 2014, held in Brest from 13 to 17 October 2014 which regrouped academia, industry, governmental organizations, and public institutions, among others. France • BOI also participated in Futur Allia 2014, an international, multi-sectored, matchmaking forum which brought together more than 10,000 participants under one roof and in Patrimonia Convention to showcase the opportunities in the Financial Services industry. The response following attendance in those forums has been very encouraging and important contacts have been established. BOI also engaged extensively into a series of targeted strategies. Out of this, more than 25 projects have been generated in various sectors, especially in ICT, Hospitality & Property Development and Life Sciences with a project value of more than MUR 300 million. Many leads have also been generated in various sectors. In 2014, Mauritius remained an attractive destination for Work & Live for the French investors and an increase of 67% was noted compared to 2013 in the number of applications for Occupation Permits by French nationals. In order to attract foreign talents, expertise and high net-worth individuals into the country, BOI intensified its communication and marketing campaigns in France with a view to making the country increasingly known to the business community, retired non-citizens and to the public at large. BOI participated in the 2nd edition of the Forum Expat, organized by the group Le Monde, held on Tuesday, June 3, 2014 in Paris. The event served as an excellent platform for BOI to market the Occupation Permit (OP) concept and contributed in reaching the target of 5,000 OPs by end of 2014. 27 The UK market remained one of our major sources of FDI with an average annual investment of MUR 2.47 billion for the last 5 years. A drop was recorded during 2013 where FDI from UK stood at MUR 503 million, but signs of picking up were seen in 2014 with FDI amounting to MUR 892 million. In order to enhance visibility and maintain our presence on the UK market, BOI participated in key international events and investment forums and focused on sectors which hold potential, especially Real Estate, Financial Services, Film and Education. A pipeline of projects with project value exceeding MUR 300 million was generated and many partnerships have materialized in the education sector. BOI participated in the following events: • Real Estate was promoted extensively through participation in the London Property Show, held on 11 & 12 April 2014. BOI was accompanied by 10 property developers and had several meetings during the event. Some 200 people visited the Mauritius pavilion and the developers were able to generate interesting contacts and finalise the sale of four RES and apartments. United Kingdom • With the aim to promote the Mauritius International Financial Centre as a risk-minimising and returns-maximising platform for mining investment and projects in Africa, BOI participated in the Mines & Money London Conference, held from 1 to 5 of December 2014. BOI had a speaking slot to present Mauritius as a mining and capital raising platform and also had a booth to disseminate information on its jurisdiction. This leading mining event allowed BOI to capitalize on the rich presence of a wide spectrum of investors and mining developers. • In order to give a boost to the education sector thereby attracting UK institutions in Mauritius, BOI organized with the Foreign and Commonwealth Office (FCO) the 3rd edition of the Mauritius International Knowledge Investment Forum (MIKIF) on 4th of March 2014 in London. The event attracted around 100 participants and saw the participation of 20 speakers from UK, France, South Africa and Mauritius. Switzerland has sustained its investments in Mauritius, especially in the Financial Services sector. FDI in 2014 amounted to MUR 571 million. An increasing interest for Africa was noted. Thus, to consolidate its presence, BOI, together with a delegation of private sector, participated in one the most important events held in Switzerland, the Africa CEO Forum, organized by Groupe Jeune Afrique in partnership with the African Development Bank. This high-level international event, which regrouped more than 650 African and international CEOs, financiers and business leaders allowed for fruitful interaction with delegates and officials from other African countries and interest was recorded in the Financial Services, Life Sciences and Education sectors. Several requests for setting up of global structures were also registered. 28 Switzerland Other European markets Over the last years, Mauritius registered new sources of FDI from European countries such as Luxembourg, Germany and Belgium while interest was also received from Russia, Austria and Turkey. In view of creating awareness, building relations and generating leads and contact from those potential countries, BOI targeted those new markets and conducted missions in Germany, Belgium, Turkey and Austria. • A Pre-Mission was conducted in Russia to assess the potential of the country and identify areas where collaboration could be sought. • Mauritius participated as the ’Partner Country’ to the Izmir International Fair which was held from 29 August to 2 September 2014 in Izmir, Turkey. The Ministry of Industry, Commerce and Consumer Protection, accompanied by the Board of Investment, Enterprise Mauritius, the Mauritius Tourism Promotion Authority and the Mauritius Chamber of Commerce & Industry led a business delegation of more than 40 people. The Mauritian participation aimed at showcasing the “savoir-faire” of the Mauritian industry, promoting Mauritius as a pro-business investment destination as well as as an International Financial Centre of substance and a platform to do business in Africa, as well as an attractive tourist destination. On the sideline of the event BOI organised two workshops to promote the country as an investment destination and financial services centre. • In view of targeting companies in the area of medical devices and biotechnology, BOI participated in the European MedTech Forum, the largest health and medical technology industry conference in Europe, held from 15 to 17 October 2014 in Brussels. Interesting contacts were established and interests expressed by research companies. BOI also organised with the support of Agence wallonne à l’Exportation et aux Investissements Etrangers (AWEX) a series of targeted meetings with companies in various sectors to promote the Mauritius offering. AWEX confirmed its intention to bring a delegation of business people to Mauritius in 2015. • BOI also participated in the “Forum Emerging Markets 2014’’, held in Vienna on 4th September 2014 organised by the Federal Ministry of Economy of Austria and the Austrian Federal Economic Chamber. • A targeted investment promotion mission was also conducted in Germany in view of maintaining our presence. The objective was mainly to target manufacturing and biotech companies. Two companies in the area of manufacturing of high precision mechanics have expressed interest to invest in Mauritius and will be conducting inward visits in 2015. 29 ASIA PACIFIC Asia remains important for our investment strategy and countries like China and India are creating new opportunities for Mauritian developers to tap into. 2014 was especially marked by the visit of the Minister of Commerce and International Trade of Malaysia, Dato’ Sri Mustapa Mohamed in March 2014 and the Indian External Affairs Minister Sushma Swaraj in November 2014 FDI from Asia Pacific countries amounted to more than MUR 2 billion in 2014, sustaining its investment as in the preceding years. The increase from Asia positions the region as the second largest FDI contributor after Europe. Given the significant level of interest from the Asian market, BOI maintained its presence on this market and presented a range of high-potential investment opportunities in key markets like China and India while at the same time targeting new markets like Japan, South Korea, Malaysia and Hong Kong. The Board of Investment engaged intensively with chambers of commerce and industry associations of this region and strong ties and collaboration have been developed. The associations have generally been very cooperative in disseminating information and referring Mauritius to their members while others have been helpful in securing meetings. Furthermore, BOI also extended its network through interaction with key economic stakeholders in Sri Lanka and Pakistan. The economic relations between Mauritius and India date back to 1948.There is also an important Indian diaspora in Mauritius and under the Occupation Permit Scheme more than 650 Indian nationals are residing, working or have invested in Mauritius. During the official visit of the Indian External Affairs Minister Sushma Swaraj in November 2014, BOI organized a business meet on 3rd November 2014. The Indian Foreign Minister highlighted that Mauritius is a vital platform and acts as a gateway to Africa. She invited Indian Corporates going to Africa to use Mauritius as a platform given the fact that the cooperation and partnership with Africa is an integral component of India’s foreign policy. Attracting investment from India has proved to be quite challenging over the last 2 years, especially in 2014 with the launching of the “Make in India” campaign. FDI dropped to MUR 75 million in 2013 but picked up slightly to MUR 145 million in 2014. In order to boost up investment from India, BOI adopted a niche strategy to (1) promote Mauritius Freeport with manufacturing companies (pharmaceuticals, agro, high-precision engineering) for them to consider setting up manufacturing and trading units to target the African market, (2) market extensively the Film Rebate Scheme and (3) extend our reach to other cities such as Bangalore, Hyderabad and Chennai. • BOI in collaboration with CII Andhra Pradesh and Tamil Nadu organised an investment forum on 30 January 2014 in Hyderabad and one in Chennai on 4 February 2014. The forums saw the participation of some 100 delegates each and many potential leads have been identified. • BOI has been actively promoting the Film Rebate Scheme to the film industry in India. A delegation from the Ministry of Arts & Culture, the Board of Investment, the Mauritius Film Development Corporation and the Mauritius Tourism Promotion Agency participated in the India International Film Tourism Conclave held from 18 to 22 in February in Chennai, Hyderabad and Mumbai. The intensive promotion campaign has resulted in the approval of more than 10 Indian movies. • BOI participated in the 5th edition of the CII Food and Bev Tech Conference from 22 to 24 August 2014 to create awareness about the Mauritius Freeport and promote Mauritius as a regional base for companies to invest in agricultural projects in Africa. Furthermore, in order to sustain our presence in India and dispel the wrong perception of Mauritius as a tax haven, BOI renewed its contract with the PR firm, Ogilvy. Ogilvy assisted BOI in the media campaign and more than 18 positive articles on Mauritius were coordinated by Ogilvy. 30 India Mauritius registered important FDI inflows during 2012 & 2013 from China partly due to G2G initiatives. The year under review saw a drop to MUR 408 million. However, with the improvement in terms of connectivity to China and also with the review of the Jinfei project, it is expected that China will pick up in 2015 and therefore maintaining presence in China is strategic. Chinese companies seemed more attracted to Mauritius as an ideal business platform to access countries of the region. China As part of its investment promotion strategy, BOI accompanied by a delegation of 12 Financial Services firms, participated in the China Offshore Beijing Summit, held on 28 and 29 of May 2014 to showcase Mauritius as a thriving business destination. New contacts were established and more than 50 expressions of interests received. The mission was coupled with highly targeted meetings with Chinese companies from various sectors, especially Film, Manufacturing and HPD. In view of boosting connectivity between Asia and Africa, Chinese shipping companies were invited to use Mauritius as a port of call on the way to Africa. BOI also established new contacts and intensified its relations with key economic stakeholders, especially the China Council for the Promotion of International Trade (CCPIT). Following actions undertaken in 2013 and 2014, BOI welcomed several inward delegations, including, inter alia: • 14 inward delegations from Chinese companies involved in the Seafood, Financial Services, Real Estate, Freeport and Manufacturing sectors with interest to invest in Mauritius; • 9 group delegations respectively from Shanxi, Qingdao, Fujian, Zhejiang and Beijing, amongst others In March 2014, BOI welcomed an important delegation of officials and economic operators from Qingdao. During the visit, BOI signed a memorandum of understanding with the Bureau of Commerce of Qingdao Municipal Government to consolidate the partnership and enhance collaboration. Furthermore, the Board of Investment and the Representative Office of China-Africa Development Fund in South Africa jointly organized a one-day workshop at Le Meridien Hotel on 24th September 2014. The objectives of the workshop were to showcase the investment opportunities and business environment in Mauritius as well as promoting Mauritius as a gateway to invest into Africa. A delegation of 34 people comprising 14 China State-owned companies was in Mauritius to attend the workshop, which also saw the participation of more than 50 local businessmen. A memorandum of understanding was signed between BOI and CADF during the visit. Malaysia’s economic performance has been remarkable since its independence in 1957. It is today the world’s third largest manufacturer of solar heaters, with complete solar ecosystems, while leading South-East Asia’s fastest growing oil and gas industry. With the focus on the development of the ocean economy and the regional bunkering hub, Malaysia is a market not to be neglected, especially with the interest shown by Malaysian investors following the visit of the Malaysian Minister of Commerce. Malaysia also holds much potential for the Financial Services industry. BOI participated in the Global Islamic Finance Conference from 2 to 4 September 2014. The event provided BOI with the right platform to showcase Mauritius as a trusted jurisdiction for Islamic Finance connecting investors to Africa and Asia based on Shariah principles. The mission was coupled with a series of targeted meetings and generated significant interest in Freeport & Logistics, Education and Manufacturing sectors. More than 5 projects have been generated with project value exceeding MUR 300 million. Malaysia 31 Other Asia Pacific markets Asia is intensifying its focus on Africa. To tap the growing interest of Far-Eastern companies in Africa, BOI embarked on a promotional campaign in the promising markets such as Japan and South Korea in June 2014. To this end, BOI participated in the Japan Africa Business Forum. On the sideline of the forum, BOI organised a dedicated seminar on Mauritius, which saw the participation of more than 50 Japanese companies with a business interest in Mauritius and more closely in Africa. During its visit to Japan, BOI signed a memorandum of understanding with Nomura Research Institute to promote business opportunities, technology transfer and job creation. The relations with JETRO were also further intensified. South Korea’s partnership with Africa is going from strength to strength and the country’s famous technology companies are leading the way. South Korea’s foreign direct investment in Africa has increased considerably to reach an average of USD 1.125 billion over the last five years. In this respect, capitalizing on its presence in this part of the world, BOI undertook a targeted mission to South Korea to build up its relationship with key industry associations and target manufacturing companies that are exporting to Africa and inviting them to explore the possibilities of setting up units in the Freeport to target the African market and tap the market access that we have with Africa. Furthermore, in view of increasing the visibility of the Mauritius IFC and engaging with some of the world’s largest natural fund managers and investment advisors, BOI participated in Mines & Money conference in Hong Kong from 25 to 26 March 2014. US The U.S.-Africa Leaders Summit convened by President Barack Obama on 4th & 5th August 2014, which was attended by some 45 Head of States, is an evidence of the growing importance of Africa in the global stage. An increasing interest was also noted from US companies to consider Africa as an investment location. Leveraging the summit, BOI conducted a mission to Washington D.C. and was successful in engaging with key US officials, major US & African companies, key institutions such as OPIC, USTDA and US Department of State as well as some key economic actors. BOI also worked closely with key stakeholders and the PR firm, Mercury LLC in US to identify leads and create awareness about Mauritius as an investment destination and a gateway to Africa. 32 MIDDLE EAST A number of Middle East companies have already established presence in Mauritius, especially in the real estate and manufacturing sectors. In 2014, the country witnessed investment, especially from UAE and Oman mainly in the manufacturing sector. Interest has been noted from several manufacturing companies to use Mauritius as a base to target the Southern and Eastern African countries where they believe that Mauritius has key advantages. The amount of FDI from UAE has known a two-fold increase in 2014 compared to 2013. FDI from UAE reached MUR 621 million. BOI facilitated major projects in the Freeport, real estate and manufacturing sectors and projects in the pipeline amount to more than MUR 300 million. South Africa is a major trade and economic partner for Mauritius. South African FDI into Mauritius over the past six years have grown significantly to reach a peak of MUR 5.3 billion in 2012 and making it one of the biggest investors. However, since 2013, a decreasing trend is recorded due to factors such as the current economic situation and the weak rand, amongst others. Yet FDI amount remains important in 2014, investments from South Africa stood at MUR 1.097 billion. REPUBLIC OF SOUTH AFRICA Given the strategic importance that the South African market holds for Mauritius as a regional partner, the Board of investment implemented a strategy for a sustained presence on this market. A roadshow was organized from 20 to 24 January 2014 targeting Durban, Johannesburg and Cape Town to affirm its conviction regarding the potential of the South African market. While anchor events in the respective cities saw the participation of over a hundred business representatives, BOI also had several targeted meetings with some of the top companies of South Africa, established key contacts and reinforced relations with key economic actors. Through this roadshow and other targeted actions, BOI was successful in generating leads in the financial services, hospitality, property development, renewable energy and aircraft maintenance. Furthermore, in view of promoting the Financial Services sector, BOI participated in the most important events, namely the Mining Indaba 2014 and the Super Return Africa 2014. • The 20th Annual Investing in Mining Indaba Conference, which took place from 3 to 6 February 2014 proved to be a convenient platform for BOI to showcase Mauritius as the ideal structuring and capital-raising platform for mining companies targeting Africa. • The 5th Annual SuperReturn Africa conference, one of Africa’s leading private equity event series, which took place from the 2 to 5 December in Cape Town provided a platform for BOI to explore and generate leads in South Africa while showcasing the position of Mauritius as a trade and investment platform for Africa. Business Success in Africa – Partnering with Mauritius for African growth (BSIA) In collaboration with ‘This is Africa’ and Financial Times, BOI organised a business conference under the theme, “Business Success in Africa- Partnering with Mauritius for African growth” (BSIA) on 9 December 2014. BSIA was one of the measures that was spelt out during the National Budget 2014 of the Government of Mauritius where the BOI was mandated to organise a number of conferences in Africa. BSIA was conceptualised with an aim of presenting an exclusive platform for African decision makers to discuss strategic partnerships for business growth across the continent. This exclusive event saw the participation of some 170 delegates, consisting mainly of senior representatives from the Financial Services Sector. Major conglomerates and corporates from various industries were also present at that event. Seychelles-Mauritius Business Forum The Ministry of Industry and Commerce, the Board of Investment, Enterprise Mauritius and the Mauritius SEYCHELLES Chamber of Commerce and Industry in collaboration with Seychelles Investment Bureau and the Seychelles Ministry of Commerce and Industry organised the Seychelles-Mauritius business forum on 24th April 2014 in Mahe, Seychelles. Twenty private sector representatives in agro-industry, construction, media and communication, healthcare, education and financial services formed part of the delegation. The business forum enabled private sector players as well as the trade and investment agencies of both countries to interact and discuss ways of accelerating joint venture collaborations and trade between the two countries. Significant opportunities for joint ventures were identified in the Seychelles agro-industry, seafood, port-related activities, financial services and education services sectors. Some 40 B2B meetings were held during the business forum for all the above sectors. 33 PR & Communication Initiatives In 2014, the main focus of our communication strategy aimed at reaching out to the global investor community while promoting the Work & Live Concept in Mauritius. In view of enhancing our visibility, BOI equally engaged with local and international media through regular interviews and adverts, totaling more than 25 for the year. BOI used an exhaustive range of media to promote the destination which included, inter alia: • The development of a high level “Coffee Book” • Brand new films in English, French and Turkish • Revamping of the BOI website • Reviewed materials: handy CDs, event tailor-made flyers and monthly newsletter • Targeted advertising campaigns in selected press overseas as well as in the local press. • Features & Advertising for Work & Live Country reports Communication & Messaging Strategy for Financial Services Ogilvy BOI participated in a number of country reports in international magazines such as New York Times (US), Der Speigel (Germany), L’Express France (France), Moniteur du Commerce International (France) and Financial Express (India). A country report was also featured in the African Development Bank Golden Book, issued for its 50th anniversary. Following the 2014 budget, BOI was entrusted with the task of setting up of a joint public-private sector Financial Services Promotion Committee to reinforce the reputation of Mauritius as an International Financial Centre. A Special Fund of MUR 50 million was provided for this purpose and the committee appointed Newgate Communications to devise the communication and messaging strategy for the Mauritius Financial Centre. The phase I of the project has been completed and the phase II action plan will be implemented in 2015. An important component of the plan for the sector also includes a sustained PR and Image Building campaign but also engagement with key influencers and stakeholders. It is also proposed that a brand identity for the jurisdiction be promoted and in this respect a series of actions have been proposed by Newgate. The Indian market remains important for Mauritius. In order to sustain visibility, BOI renewed its work contract with Ogilvy. During the reporting year, Ogilvy has undertaken a number of initiatives in terms of lead generation, image building and press scanning. PR & Assistance in the US The work of Ogilvy was also key in terms of dispelling the erroneous perception of Mauritius as a tax haven through the publication of positive articles and clarification letters. Ogilvy also shared daily updates on the economic and political situations in India. A media trip was organized in September 2014 to coincide with the Private Equity Conference and aimed at positioning Mauritius as a trusted and transparent International Financial Centre and a gateway to Africa. The country reports targeted between 15,000 and 300,000 readers. Along with creating visibility of Mauritius on the specific markets, the country reports have also contributed in showcasing the multiple investment opportunities that the country offers. In addition, to address the negative perception of Mauritius as an investment destination and financial centre, the services of international PR agencies including Ogilvy (India), Mercury LLC (USA) and Newgate (Global for Financial Services) were equally retained. Mercury LLC which was appointed as our PR agency in February 2014 and assisted BOI with lead development and contacts with key industry associations. The PR Firm has also worked closely with BOI to produce a set of public relations materials, including key messages, fact sheet, and FAQs and facilitated a number of interviews. Furthermore, Mercury also monitored, reported on and provided some analysis of the growing controversy about Mauritius as a tax haven. 34 In terms of PR, more than 18 stories were published to highlight Mauritius as a trusted and well-regulated jurisdiction and as a springboard for investments in Africa. Other features that appeared promoted the Film Rebate Scheme, the opportunities for development within the ocean economy, the health care sector and the manufacturing and Freeport. Several media meetings were also organized during the visits of Government officials and BOI representatives in India. These provided for opportunity to promote the business environment as well as ease of doing business. Local Initiatives On the local front, BOI organized three major conferences to promote: 1.Mauritius as the ideal platform for Private Equities to structure their investment through the organization of the 4th edition of Private Equity Mauritius 2.The biotech industry through the organization of the 2nd edition of BioAfrica 3.Mauritius as the ideal platform for Africa through the organization of the 1st edition of the Mauritius Africa Partnership Conference Private Equity Conference 2014 Mauritius continues to play an important role in driving quality investments across the African continent. According to FDI Intelligence, it is estimated that total cumulative investments from Mauritius to Africa for 2012 and 2013 were approximately USD 3.47 billion. As a result, Mauritius was the 10th largest FDI source country for Africa in terms of project value for that period. This represented around 3.5% of total investment value made in Africa during this period. With the aim of reaffirming the position of Mauritius as a leading financial and investment centre for Africa, BOI organized the 4th annual Private Equity Mauritius conference from 25 to 26 September 2014. Themed ‘Capitalising Africa’s Growth’, the conference had a special focus on the evolving nature of investment needs of Africa, implications for its development and how best, as a regional financial centre of substance, Mauritius could act as a catalyst in this process. The conference witnessed the participation of some 300 professionals, including more than 100 foreigners from 20 different countries. It regrouped some of the most respected speakers in the African private equity and investment sphere, including Dr Martyn Davies from Frontier Advisory, Terry Smith from Fundsmith, Anne-Marie Chidzero from Africap Microfinance and Gail Mwamba from Private Equity Africa, amongst others. as well as upcoming Private Equity funds in the process of fund raising to connect with potential investors from the Development Finance Instiution, Sovereign Wealth Fund and PE investors’ community. Moreover, it turned out to be an excellent platform for some of the most active funds in Africa and other emerging regions to share their views on why they have chosen Mauritius to set up their full-fledged front and back offices. Establishing itself as a leading deal-making platform, the conference has allowed many African companies 35 BioAfrica Over the years, Mauritius had made significant strides towards the development of biotech applications and this has led to the emergence of a biotech industry with four main areas of focus, namely red biotech (healthcare), white biotech (industrial), green biotech (agri) and blue biotech (marine). The Board of Investment has been actively involved in supporting the development of the industry and has facilitated investment projects in various areas of biotech. To give further impetus to the development of the sector, BOI organised a two-day conference focusing on biotech opportunities in Mauritius and Africa on 23 and 24 April. The conference themed “Bio Africa 2014” featured eminent speakers from around the globe. The event witnessed the intervention of delegates from France, UK, South Africa, Malaysia, Reunion, India, and Canada as well as Mauritian stakeholders. BioAfrica 2014 was the ideal platform for creating awareness, opening up new avenues of collaboration and showcasing the opportunities in Mauritius and Africa. The organization of the BioAfrica 2014 was also instrumental for the materialisation of a number of projects mostly in the medical biotech and medical devices sectors. The conference also met its objectives of creating awareness about the sector and promoting Mauritius as a destination for Research and Development. Mauritius Africa Partnership Conference Announced in the 2014 National Budget as part of BOI’s actions to spearhead the Expanded Africa Strategy, the Mauritius Africa Partnership Conference was organised on 25 and 26 June 2014 with a view to establishing greater cooperation at the institutional level while providing a platform for regional Investment Promotion Agencies (IPAs) to share experiences, encourage best practices and increase networking. Master-classes covering country marketing and entrepreneurship, digital government, and transformational leadership were some of the main features. Planned country presentations showcased investment opportunities in various emerging African economies represented. Among the speakers were renowned Larry Farrell, the entrepreneurship guru; Professor Srikumar Rao, one of the world’s leadership coaches; Honourable Dato Sri Idris Jala, the main architect of the Transformation Programme of the Government of Malaysia; and Mr. Lim Siong Guan, former Chairman of Singapore Economic Development Board and the Singapore Civil Service. Mr Lim has been instrumental in instructing leadership and change management in Singaporean public sector. More than three hundred participants comprising CEOs and representatives of 28 IPAs and other regional organisations, local and foreign entrepreneurs and leaders of financial institutions were in attendance. 36 The leading role of Mauritius in the renewal of this relationship was effectively illustrated by the presentation of success stories, innovative ideas and priorities for the future. The holding of the Mauritius Africa Partnership Conference is a key piece in the Mauritius-Africa strategy for cross-border investment and trade within Africa. The successful outcome of the forum and the positive feedback received from all major stakeholders and participants call for a larger-scale edition next year with a wider participation of African and global enterprises. BOI representatives During the various marketing trips that were conducted, the importance of having a presence on the ground or to have the right network of contacts was noted. In this respect, BOI decided to appoint a number of representatives in key markets that would either be well connected or have access to the appropriate network to assist BOI in its marketing and help open the door to these markets. BOI therefore appointed 4 Honorary Representatives in India, South Africa, France and Australia, respectively, in 2014. The role of the representatives involved, inter alia, to advise the respective country desks officers about targets as well as events and forums where BOI needs to be present. They also provided BOI with updates on the market and introduced key businesses with interest for Mauritius as an investment destination or as a jurisdiction. The Honorary Representatives have helped to generate interest from potential investors, recommended participation in important events, coordinated inward visits of investors and high net-worth individuals. 37 3.4 a. Reinforced Africa Strategy Investment from Africa to Mauritius During the period 2008-2013, the cumulative FDI from Africa to Mauritius stood at MUR 16.834 billion, making up 20.7% of the total Mauritian FDI portfolio. With 76.3% (MUR 1.097 billion) of total FDI generated from Africa (MUR 1.437 billion in 2014), South Africa remains the main source country for Mauritius. Investment from Africa to Mauritius (MUR Million) 5,852 3,523 2,454 2,019 1,929 1,437 1,056 2008 b. 2009 2010 2011 2012 2013 2014 Investment from Mauritius to Africa Cumulative investment from Mauritius to Africa stood at MUR 15,699 billion for the period 2008-2014. With the outbreak of the Ebola disease in 2014 and a subsequent slowdown of investment towards Africa, the Mauritian investment flows to the continent amounted to only Rs 950 Million as at 2014. Mauritian Investment into Africa 5,000 4,503 4,444 4,500 AMOUNT (MUR MILLIONS) 4,000 3,500 3,000 3,255 2,500 2,000 1,500 1,000 500 0 1,288 590 950 669 2007 2008 2009 2010 2011 2012 Africa 38 2013 2014 c. Networking with various organisations During the year, the Board of Investment extended its network in Africa by signing an additional five Memorandums of Understanding (MoUs) with its African counterparts. This brings the total number of agreements with African Investment Promotion Agencies to 26. In addition, BOI works in close collaboration with resource persons in Africa, Chambers of Commerce of African countries as well as African business associations. Considered as a benchmark among the Investment Promotion Agencies in Africa, BOI also advises the Government of Mauritius on ways and means to achieve its strategy of building a new economic partnership with Africa. In this respect, BOI conducted several consultancy projects in Africa to assist the IPAs in their setting up or improvement of their performance. d. Mauritius Africa Partnership Conference The Mauritius Africa Partnership Conference (MAPC) was a key milestone achieved by BOI. For the first time ever, representatives of Investment Promotion Agencies from 25 African countries were regrouped on one common platform to seek areas of collaboration aimed at making Africa prosperous. This event gathered some 300 C-level delegates, who leveraged this networking opportunity to acquire a better understanding of the economic dynamics of the respective African countries During MAPC, the following bilateral agreements have been concluded: -Four MoUs signed with Cameroon, Ethiopia, Burundi and Burkina Faso Investment Promotion Agency, respectively - Investment Promotion and Protection Agreement (IPPA) signed with Egypt Another outcome of this event has been the setting-up of an interactive online platform to enable African Investment Promotion Agencies to work closely together in order to contribute towards promoting the growth of the continent. e. Implementation of 2014 Budgetary Measures The Government has created the Mauritius Africa Fund, with a financial commitment of MUR 500 million spanning a five-year peroid. It will contribute as an equity shareholder to a maximum of 10% of the seed capital of viable projects. With such government support, this initiative undoubtedly gives further visibility and comfort to African authorities on the credibility and viability of the projects presented to them by Mauritian companies. Other major measures were also announced as part of the Expanded Africa Strategy. For instance, an additional thrust has been given to Africa-oriented exports through the introduction of 25% subsidy on freight cost up to a maximum of USD 300 per container to any African country excluding South Africa and Madagascar. This subsidy also has a ripple effect by developing further the Freeport as well as encouraging investors to set up their manufacturing base in Mauritius. Addressing the risk and security concerns while exporting to non-traditional African regions is one of the main priorities of the Government of Mauritius and a 50% subsidy on credit guarantee insurance henceforth acts as a cushion for businessmen actively trading in Africa. 39 f. Africa Centre of Excellence Since its inception, the Africa Centre of Excellence (ACE) has been successful in not only establishing its footprint in Mauritius but extending its outreach to key African markets. Moreover, ACE is also considered as a major point of reference for information and business facilitation. In 2014, ACE reached a target of 2,500 registered users on its online portal (www.boiafrica.com) and responded to some 150 queries on a monthly basis. ACE also supports the Government of Mauritius by making recommendations for the National Budget with respect to concrete measures to intensify the level of G-to-G collaboration between selected African and Mauritian public institutions, strengthen the level of technical cooperation, enable the transfer of technology and accelerate the pace of partnerships in sectors of key importance for African countries. To this effect, ACE plays a pivotal role in reinforcing bilateral collaboration among several African countries and Mauritius. Amongst the earmarked countries are Ghana, Madagascar, the Republic of Congo and Senegal. ACE is working on a paper relating to the conceptualisation, design and even development of the special economic zones in these African countries. As part of its promotional events, one of the main initiatives undertaken by ACE was the hosting of Country Weeks. The aim of this event is to synergise efforts and reinforce our collaboration with African Investment Promotion Agencies. This event is in line with the strategic objectives of BOI with regard to providing enhanced services to investors and showcasing business opportunities in Africa. In 2014, ACE conducted two country weeks focusing on Mozambique and Nigeria as target markets. These events have met with an overwhelmingly positive response from the Mauritian business community. The IPA representatives were successful in building strong working relationships with the local business community that were present during the country weeks. g. Key projects facilitated in Africa With a general awareness of the considerable growth and opportunities that African countries offer, the number of business ventures facilitated by ACE on the continent has been rising in number and importance. Amongst these projects were the following: - Setting-up of an insurance business in Botswana which was launched in June 2014 - Setting-up of a 20MW solar project in multiple phases in Burundi - Setting-up of a branch office in Zimbabwe by a company providing an E2E enterprise technology solutions - Expansion of a poultry production in Kenya - Setting-up of a data centre in Ethiopia There are in the pipeline an additional 20 Africa-focused projects which are being closely monitored by ACE officers. 40 3.5 Doing Business in Mauritius Business Climate In our quest to continuously improve the business climate, the Board of Investment worked together with both the private sector and the regulators to further facilitate doing business in the country. The use of information technology remained the leading factor which drove the reform programmes. Key institutions such as the Corporate and Business Registration Department, Local Authorities and the Registrar General Department are geared towards providing their clients with a fully computerised interface. The following key intiatives were undertaken: Online incorporation of companies With the implementation of a fully integrated business registration and incorporation platform, a company can be incorporated online and the incorporation certificate issued within 2 hours. E-registry project The Registrar General Department (RGD) has launched the Mauritius eRegistry Project (MeRP) which includes the following online services: eSubmission, eTaxation, ePayment, eDelivery for movable and immovable property as well as the provision of information to stakeholders and government agencies online. Online application for Building and Land Use permit The e-local government platform has been upgraded to allow online submission of applications for Building and Land Use Permit (BLP). The new platform allows the submission of required plans, tracking and monitoring of the application by both the applicants and the management of the Local Authority. An e-payment module has also been integrated in the BLP online system. Moreover, through these collective efforts, Mauritius moved up to the 29th position in the Ease of Doing Business report published in October 2014. A number of improvements have been noted across several indicators including Dealing with Construction Permit, Getting Electricity, Registering Property, Getting Credit, Paying Taxes, Trading across borders, Enforcing Contract and Resolving Insolvency. 41 International Benchmarks No 42 Index Global Rank Africa Rank 1 World Bank Doing Business 2014 29 out of 189 countries 1st out of 47 countries 2 Logistics Performance Index 2014 115 out of 160 countries 18th 3 Global Competitiveness Index 2014-2015 39 out of 144 countries 1st (2nd consecutive year) 4 Corruption Perceptions Index 2014 (Transparency International) 47 out of 174 countries 4th 5 Mo Ibrahim Index of African Governance 2014 - 1st out of 52 countries 6 The A.T. Kearney Global Services Location Index, 2014 36 out of 50 countries 7 2015 Index of Economic Freedom 10 out of 178 countries 8 Economic Freedom of the World 2014 (Fraser Institute) 5 out of 152 countries 1st 9 Human Development Index 2014 63 out 187 countries 2nd after Libya 10 Democracy Index 2014 Full Democracy 1st 11 Environmental Performance Index 2014 56 out 178 countries 1st 12 Mercer’s 2014 Quality of Living Survey 82nd 1st 13 Global Information Technology Report 2014 48 out of 148 countries 1st 14 Forbes Survey of Best Countries for Business 2014 34 out of 145 countries 1st 15 Social Progress Index 2014 34 out of 132 countries 1st 4th after Egypt, Tunisia and Ghana 1st out of 46 in the Sub-Saharan African Region Reform-Online OP System The Board of Investment has implemented a user-friendly electronic platform that allows non-citizens willing to invest, work or retire in Mauritius to submit their application for an Occupation/Residence Permit online. The platform allows non-citizens to submit their application online, effect payment and obtain an e-version of the registration certificate. The system comprises interactive e-forms for the application while a scanned version of all supporting documents is uploaded on the system. An online appointment module and an e-payment system have also been incorporated. With the introduction of the new computerized system, the Board of Investment has been able to give a better service to the business community, reduce paperwork and improve turnaround time. 43 CORPORATE GOVERNANCE REPORT 4. 44 45 BOI views good Corporate Governance practices as an integral component of good performance. As a parastatal body wholly owned by Government, the organisation is committed to fulfilling its mandate in a manner which is consistent with good governance practices, particularly accountability, transparency, responsibility and ethics. Governing Bodies The direction, control and accountability of the business of BOI are vested in the Board. Business is conducted in accordance with the Investment Promotion Act, other relevant statutory provisions and the principles of good governance. All functions are exercised in good faith with due care and diligence, and in the best interest of BOI and its stakeholders. The Board The Board is responsible and accountable for the performance and affairs of the organisation. It subscribes to sound Corporate Governance Principles and ensures that the highest standard of business ethics and integrity are maintained. The Board was composed of the following members: Name of Board Members Mr. Maurice Lam Mr. Radhakrishna Chellapermal Mr. Raj Makoond Mr. François Woo, G.O.S.K Mr. Yusuf Sooklall Mr. Kreetee Coomar Ruhee Mr. Abdool Nooranee Oozeer Mr. Jairaj Sonoo Mr. Gilbert Gnany Mr. Ben Lim Function Date of Assumption of office Chairman – Board of Investment Chairman as from 19th November 2005 to 11th Founding Partner Stewardship Consulting December 2014 Ag. Deputy Financial Secretary Business Development Directorate Ministry of Finance and Economic Development Board Member, as from 19th January 2006 to March 2015 Executive Director Board Member, as from 8th November 2000 to Joint Economic Council March 2015 Managing Director Board Member, as from 19th January 2006 to March Compagnie Mauricienne de Textile Ltée 2015 Trade Unionist & Consultant in Industrial Board Member, as from 8th November 2000 to Relations and Labour Law March 2015 Chief of Staff Board Member, as from February 2009 to 11th Prime Minister’s Office December 2014 Permanent Secretary Board Member, as from 24th June 2009 to March Ministry of Housing & Land 2015 Chief Executive Officer Board Member, as from 13th July 2010 to March State Bank of Mauritius 2015 Chief Strategy Officer Board Member, as from 2nd February 2012 to March Mauritius Commercial Bank Group 2015 Chief Executive Officer Board Member, as from 2nd February 2012 to March Intercontinental Trust 2015 Board Committees The Nomination and Remuneration Committee For the year under review, the Nomination and Remuneration Committee, a sub-committee of the Board, was still active with the mandate to: I. approve recommendations for nominations, salary reviews and promotion exercise II. approve the recommendations of Management with respect to decisions pertaining to the Managing Director’s reports III.approve recruitment of high-calibre professionals who report directly to the Managing Director. The following Board Members constitute the committee: 1.Mr. Maurice Lam (Chairman) 2.Mr. Yusuf Sooklall 3.Mr. Gilbert Gnany 4.Mr. Raj Makoond 5.Mr. Radhakrishna Chellapermal 46 Board Committees (cont.) The Strategy Committee The objective of the Strategy Committee is: I. To oversee the implementation of the strategic plan for the Board of Investment II. To monitor implementation of the strategies and key performance indicators III.To provide strategic directions to ensure set objectives are attained. The following Board Members constitute the Strategy Committee: 1.Mr. Maurice Lam- Chairperson 2.Mr. Kreetee Coomar Ruhee 3.Mr. Radhakrishna Chellapermal 4.Mr. Ben Lim 5.Mr. Yusuf Sooklall 6.Mr. Gilbert Gnany The committee meets as and when required. Members of the sub-committee are not remunerated. The Risk Management & Audit Committee The Risk Management and Audit Committee has been mandated to assist the Board in adhering to its corporate governance principles and oversee the risk management and audit function of the Board of Investment. The detailed objectives are to: I.To oversee matters relating to financial reporting, internal control systems, risk management systems and the internal and external audit function. II. To assess the controls and best practices put in place by BOI to mitigate any operational and reputational risks III.To report on the Internal Audit as and when internal audits are completed. The following Board Members constitute the Risk Management and Audit Committee: 1.Mr. Raj Makoond – Chairperson 2.Mr. Jairaj Sonoo 3.Mr. Abdool Nooranee Oozeer 4.Mr. Ben Lim The committee meets as and when required. Members of the sub-committee are not remunerated. Board Member Attendance to Meetings Board Members’ Remuneration for the period January 2014 to December 2014 Director’s Fees Board Attendance (4 Meetings held in 2014) Mr. Maurice Lam No Fees Attended 4 Meetings Mr. Radhakrishna Chellapermal 240,000 Attended 4 Meetings Mr. Raj Makoond 240,000 Attended 3 Meetings Mr. François Woo No Fees Attended 1 Meetings Mr. Yusuf Sooklall 240,000 Attended 4 Meetings Mr. Kreetee Coomar Ruhee 220,000 Attended 4 Meetings Mr. Abdool Nooranee Oozeer 240,000 Attended 3 Meetings Mr. Jairaj Sonoo 240,000 Attended 2 Meetings Mr. Gilbert Gnany 240,000 Attended 3 Meetings Mr. Ben Lim 240,000 Attended 3 Meetings Name of Directors Management The remuneration of the Managing Director and 8 Directors amounts to MUR 21.7 million. 47 Our Employees The Board acknowledges that organizational objectives can be achieved only through its employees. Accordingly, a lot of emphasis is placed upon the human capital by providing a healthy and safe working environment and adopting an equitable and fair approach towards employee’s remuneration benefits. During the year 2014, BOI recruited 1 officer on contract basis and 2 officers left the organization. Remuneration Policy We are an equal opportunity employer and we are committed to attracting and retaining the best people. We believe that our people are the source of our success. We aim at motivating and compensating them by providing a competitive salary package along with related benefits. Priority in promotion is given to employees within the organisation and selection is based on the principle of meritocracy. We also welcome external candidates for job openings at all levels of the organisation, especially when and where specific skills and expertise are being sought. The individual performance is regularly and objectively measured in line with agreed objectives with the aim of promoting a performance culture while ensuring individual growth and development. Statement of Director’s Responsibility The Directors of the Board of Investment acknowledge their responsibilities for: 1. Adequate accounting records and maintenance of effective control systems; 2.The preparation of financial statements which fairly illustrate the state of affairs of BOI as at the end of financial year and the results of its operations and cash flows for that period and which comply with International Public Sector Accounting Standards (IPSASs); and 3. The selection of appropriate accounting policies supported by reasonable and prudent judgments The external auditor (i.e. the Director of Audit, National Audit Office) is responsible for reporting on whether the financial statements are fairly presented. The Directors report that: 1. Adequate accounting records and an effective system of internal controls have been maintained; 2. Appropriate accounting policies supported by reasonable and prudent judgments and estimates have been used consistently; 3. Applicable accounting standards have been adhered to; and 4. The Code of Corporate Governance as applicable to State-Owned Enterprises has been adhered to. Our Board of Directors The Board is responsible for the overall direction, strategy, performance and management of the organisation. Authority for implementing the Board’s policies is delegated to the Managing Director within certain limits as authorised by the Board. Operation of the Board Meetings of the Board are scheduled in advance and Board papers are circulated before the meeting. In order to ensure a synergy between Management and the Board, the Investment Promotion Act provides that the Managing Director is entitled to attend every meeting of the Board. This facilitates the implementation of policy decisions taken by the Board. Ethics BOI honours its responsibility in providing an ethical and safe working environment for its personnel. BOI has issued a handbook detailing all its policies and procedures. BOI has subscribed to a medical insurance cover for its entire staff as well as 24-hour insurance cover for accident for its entire staff. BOI has developed a Human Resource Policy Manual that establishes the standard of conduct and ethics for its employees and provides guidance on employees’ professional obligations. BOI has developed and implemented a Gift Policy which details the procedures to be followed in the event corporate gifts are sent to BOI. Environment BOI is committed to promoting work practices that preserve the environment. Sustainability can only be achieved through a concerted effort to minimize impact on the environment. BOI promotes a work environment with minimal paper utilization. 48 Corporate Social Responsibility BOI’s Welfare Committee has established a programme of activities for the welfare of its employees as well as for the community at large. Health and Safety BOI is committed to providing and maintaining a healthy, safe and secure working environment. It believes in raising awareness of health and safety issues, that are imperative in the prevention of accidents and improving the well-being of its staff. Operational Risk Management Internal Risk Management Information Technology BOI ensures that IT resources are optimally used to provide the organisation with the information that it needs to achieve its business objectives while minimizing the risk of fraud, corruption and misuse of resources. Appropriate safeguards and firewalls are in place to protect the intellectual property of BOI as well as against attacks. While providing its employees with up-to-date IT facilities and tools to enable them to operate more efficiently and effectively, BOI has adopted a number of policies and implemented measures to ensure an ethical and lawful use of its infrastructure. ISO Standards and Certification BOI has been ISO certified since 2013 and after the ISO Audit Surveillance by SGS in 2014, BOI is maintaining its ISO Certification for 2014 – 2015. External Risk Management Risk Monitoring Committee A Risk Monitoring Committee has been set up within BOI under the aegis of the Risk Management & Audit Committee, which is a sub-committee of the Board, to assess and mitigate external risks faced by BOI. A Risk Assessment Exercise is undertaken once every quarter to assess the potential risks that could impact BOI and the Risk Monitoring Committee has the mandate to identify remedial actions to mitigate such risks. Adopting an Anti-Corruption Policy As part of its commitment to promote good governance, the Board of Investment has established the Public Sector Anti-Corruption Framework on the advice of the Independent Commission Against Corruption (ICAC). The Anti-Corruption Framework is considered as the basic tool to entrench the principles of integrity, transparency and accountability and it has been designed to maintain our efforts in the fight against corruption. The Anti-Corruption Policy sets the tone at the highest level of the organisation on BOI leadership’s full commitment to a culture of integrity. The Anti-Corruption Committee is responsible for developing and coordinating the implementation of the anti-corruption initiatives and programmes within the organisation. Corruption Risk Management activities have also been carried out in order to recognise and analyse any perception of corruption and develop remedial actions to minimise and manage those risks. These initiatives of the Board of Investment further emphasize our commitment for a zero-tolerance culture against corruption. NOTES Related Party Transactions There has not been any related party transaction during the year. 49 FINANCIAL STATEMENT 5. 50 51 REPORT OF THE DIRECTOR OF AUDIT TO THE BOARD OF THE BOARD OF INVESTMENT Report on the Financial Statements I have audited the accompanying financial statements of the Board of Investment, which comprise the statement of financial position as at 31 December 2014, the statement of financial performance, statement of changes in net assets/equity, statement of cash flows and statement of comparison of budget and actual amount for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Public Sector Accounting Standards and in compliance with the Statutory Bodies (Accounts and Audit) Act, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with International Standards of Supreme Audit Institutions. Those Standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements , whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. 52 Opinion In my opinion, the financial statements give a true and fair view of the financial position of the Board of Investment as at 31 December 2014, and of its financial performance, cash flows and budget performance for the year then ended in accordance with International Public Sector Accounting Standards Report on Other Legal and Regulatory Requirements Management’s Responsibility In addition to the responsibility for the preparation and presentation of the financial statements described above, management is also responsible for ensuring that the activities, financial transactions and information reflected in the financial statements are in compliance with the laws and authorities which govern them. Auditor’s Responsibility In addition to the responsibility to express an opinion on the financial statements described above, my responsibility includes expressing an opinion on whether the activities, financial transactions and information reflected in the financial statements are, in all material respects, in compliance with the laws and authorities which govern them. This responsibility includes performing procedures to obtain audit evidence about whether the agency’s expenditure and income have been applied to the purposes intended by the legislature. Such procedures include the assessment of the risks of material non-compliance. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Opinion on Compliance Statutory Bodies (Accounts and Audit) Act I have obtained all information and explanations I have required for the purpose of my audit. In my opinion, in all material respects, the activities, financial transactions and information reflected in the financial statements are in compliance with the Statutory Bodies (Accounts and Audit) Act. Public Procurement Act The Board of Investment is responsible for the planning and conduct of its procurement. It is also responsible for defining and choosing the appropriate method of procurement and contract type in accordance with the provisions of the Act and relevant Regulations. My responsibility is to report on whether the provisions of Part V of the Act regarding the Bidding Process have been complied with. In my opinion, the provisions of Part V of the Act have been complied with as far as it appears from my examination of the relevant records. Financial Reporting Act The Directors are responsible for preparing the Corporate Governance Report and making the disclosures required by Section 8.4 of the Code of Corporate Governance of Mauritius (“Code”) . My responsibility is to report on these disclosures. In my opinion, the disclosures in the Corporate Governance Report are consistent with the requirements of the “Code” K.C TSE YUET CHEONG (MRS) Director of Audit National Audit Office Level 14 , Air Mauritius Centre Port Louis 23 September 2015 53 STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2014 Notes 31 December 2014 31 December 2013 (Restated) MUR MUR ASSETS Current assets Cash and cash equivalents 41,814,300 Receivables 3 Prepayments 52,785,793 5,428,195 3,855,726 1,471,459 1,928,904 48,713,954 58,570,423 2,949,869 4,263,860 10,000 10,000 12,369,422 16,312,925 15,329,291 20,586,785 64,043,245 79,157,208 36,130,389 50,087,718 Non-current assets Receivables Investment Property, plant and equipment 4 Total Assets LIABILITIES Current liabilities Payables Short-term car loan 2,539,241 2,210,228 Employee benefits 1,978,285 2,781,223 3,722,823 4,614,087 44,370,738 59,693,256 13,403,318 13,292,427 Government Grant 5 Non-current liabilities Long term loan 6 Employee benefits Car loan 133,840 2,948,369 4,258,360 Retirement benefits obligations 7 9,623,168 7,516,417 Government Grant 5 11,061,712 13,543,951 37,036,567 38,744,995 81,407,305 98,438,251 (17,364,060) (19,281,043) (17,364,060) (19,281,043) (17,364,060) (19,281,043) Total Liabilities Net Assets NET ASSETS/EQUITY Accumulated deficit 8 Total Net Equity 54 ............................................................ ............................................................ ............................................................ Chairperson Board Member Managing Director STATEMENT OF FINANCIAL PERFORMANCE FOR YEAR ENDED 31 DECEMBER 2014 Notes Year ended Year ended 31 December 2014 31 December 2013 (Restated) MUR MUR Revenue Government grant 9 181,691,697 151,340,632 Deferred income 4,909,607 5,813,044 Revenue from exchange transactions 5,202,298 4,053,000 742,500 558,000 Revenue from non-exchange transactions 10 Other revenue 11 Total revenue 66,868,897 29,393,095 259,414,999 191,157,771 91,947,625 77,929,710 Expenses Salaries and employee benefits 12 Other expenses 13 46,986,897 42,240,982 Investment promotion 14 113,083,887 70,612,821 5,479,607 6,383,044 257,498,016 197,166,557 1,916,983 (6,008,786) Depreciation Total expenses Surplus/(Deficit) for the year 55 STATEMENT OF CHANGES IN NET ASSETS/EQUITY FOR YEAR ENDED 31 DECEMBER 2014 Accumulated Surpluses/ (Deficits) Balance at 1 January 2013 Deficit for the year ended 31 December 2013 Balance as at 1 January 2014 Surplus for the year ended 31 December 2014 Balance as at 31 December 2014 56 (13,272,257) (6,008,786) (19,281,043) 1,916,983 (17,364,060) CASH FLOW STATEMENT FOR YEAR ENDED 31 DECEMBER 2014 Surplus/(Deficit) Year ended Year ended 31 December 2014 31 December 2013 (Restated) MUR MUR 1,916,983 (6,008,786) 5,479,607 6,383,044 (4,909,607) (5,813,044) Non-cash movements Depreciation Deferred income Increase/(Decrease) in payables (13,681,280) 39,626,835 Increase/(Decrease) in provisions relating to employee costs 1,414,702 1,373,096 (Gain)/loss on sale of property, plant and equipment (140,500) 55,000 (7,339) (25,162) (818,667) 2,735,482 (10,746,111) 38,326,465 (1,536,104) (11,056,368) Interest received on car loan (Increase)/Decrease in receivables Net cash flows from operating activities Cash flow from investing activities Payments for plant and equipment Proceeds from disposal of plant and equipment Interest received on car loan Net cash flows from investing activities 140,500 7,339 25,162 (1,388,265) (11,031,206) 1,536,104 11,056,368 Cash flow from financing activities Capital grants received Repayment of long term loan (409,888) (369,201) Car Loan received from MOF 1,200,000 3,342,500 (1,200,000) (3,342,500) Car Loan paid to Staff Car Loan reimbursed by Staff Car Loan refunded to MOF 2,180,979 2,220,039 (2,180,979) (2,220,039) Staff Loan disbursed (95,000) (20,000) Loan reimbursed by Staff 131,667 165,167 1,162,883 10,832,334 (10,971,493) 38,127,593 Cash and cash equivalents at beginning of year 52,785,793 14,658,200 Cash and cash equivalents at end of year 41,814,300 52,785,793 Net cash flow from financing activities Net increase in cash and cash equivalents 57 STATEMENT OF COMPARISION OF BUDGET AND ACTUAL AMOUNT FOR THE YEAR ENDED 31 DECEMBER 2014 Budgeted Actual Difference Amounts Amounts Final Budget Original Remarks and Actual RECEIPTS Government Grant 185,000,000 183,227,800 (1,772,200) 5,202,600 5,202,600 185,000,000 188,430,400 3,430,400 Other receipts Total receipts PAYMENTS Compensation of Emoluments - Personal Emoluments 56,800,000 55,359,222 (1,440,778) Other staff Costs 22,555,000 24,150,130 (1,595,130) Goods & Services Cost of Utilities 6,382,507 (187,493) 750,000 1,120,425 370,425 10,200,000 9,757,214 (442,786) 250,000 95,480 (154,520) Office Expenses 3,060,000 5,252,852 2,192,852 Maintenance 1,450,000 1,159,148 (290,852) Rent Office Equipment and Furniture Cleaning Services 200,000 281,879 81,879 Publication and Stationery 1,540,000 1,079,952 (460,048) Fees to Board Members 1,900,000 1,900,000 - Training 1,500,000 2,992,256 1,492,256 825,000 1,202,910 377,910 4,500,000 10,115,692 5,615,692 Missions & BOI Events 45,000,000 44,836,270 (163,730) Investment Promotion Tool 10,000,000 3,313,686 (6,686,314) International Advertising 4,900,000 790,672 (4,109,328) Foreign Office Representative 5,000,000 Other Goods and Services Professional Fees & Consultancy Acquisition of non-financial assets 58 6,570,000 Fuel & Oil Includes arrears for payment of sick leaves for 2013 not provided for in the budget. (5,000,000) 8,000,000 6,075,410 (1,924,590) 185,000,000 175,865,705 (9,134,295) Includes acquisition and renewal of software licences Includes training on General Management Program, Personal excellence & leadership not provided in the budget Fees paid for the provision of PR and assistance in the USA and for salary review were not provided in the budget NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 1. INCORPORATION AND ACTIVITIES The Board of Investment, a statutory body established under the Investment Promotion Act 2000, is the national investment promotion agency falling under the aegis of the Ministry of Finance and Economic Development. The Board of Investment (BOI) is responsible for the promotion and facilitation of inward investments. The objects of the Board of Investment are (a) to stimulate the development, expansion and growth of the economy by promoting Mauritius as an international investment, business and service centre; (b) to promote and facilitate the development of all forms of investment and business activities; (c) to formulate investment promotion policies and plans and marketing strategies and undertake promotion to attract foreign and local investments; and (d) to advise Government on strategies for investment policies, national investment marketing and investment after care, economic and industrial planning and country image building. 2. ACCOUNTING POLICIES The principal accounting policies adopted by the Board of Investment are listed below:- 2.1. Accounting convention The financial statements have been prepared in accordance with the International Public Sector Accounting Standards (IPSASs) issued by the International Public Sector Accounting Board (IPSASB) which is a Board of the International Federation of Accountants Committee (IFAC). 2.2. Property, plant and equipment Property, plant and equipment are stated at cost net of accumulated depreciation. Depreciation is calculated on the straight-line basis at annual rates estimated to write off the cost of the assets less their estimated residual values over their expected useful lives. The expected useful lives of Property, plant and equipment are as follows: Motor vehicles 5 years Office furniture 10 years Office equipment 7 years Computer system & equipment 5 years 2.3. Foreign currencies Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of transaction. Monetary assets denominated in foreign currencies are translated using the rate of exchange ruling at the statement of financial position date and gains or losses on translation are included in the statement of financial performance. 59 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (Continued) 2.4. Revenue recognition Government grants Government grants received as financial support to the Board of Investment are recognized as income and matched with the associated costs which the grant is intended to compensate. Grant used to finance the purchase of fixed assets is amortized over the useful lives of the assets acquired. 2.5 Employee benefits (i) Retirement benefits The present value of any funded or unfunded defined benefit obligations is recognized in the statement of financial position as a non-current liability after adjusting for the fair value of plan assets and any unrecognized items based on annual assessment by the actuaries. (ii) Other employee benefits The present value of any other employee benefits is recognized in the statement of financial position as a non-current liability. 2.6 Cash and cash equivalent Cash and cash equivalents comprise cash at bank and in hand. The details are as follows: 1. Cash at bank – Local Bank – MUR 41,246,879 2. Cash at bank – State Bank of Mauritius Ltd – Mumbai – MUR 486,499 (INR 1,018,419) 3. Cash in hand – MUR 80,922 2.7 Accumulated Deficit The Accumulated Deficit of MUR 17,364,060 as at 31 December 2014 is explained mainly by the recognition of provisions for the employee benefits, namely Provisions for Accumulated Sick Leave (MUR 6,263,524), Accumulated Unused Vacation Leave (MUR 7,596,072), Accumulated Passage Benefits (MUR 1,522,007) and Pension Obligations (MUR 9,623,167). 2.8 Restated figures for the year ended 31 December 2013 The figures for the year ended 31 December 2013 have been restated. Funds amounting to MUR 4,184,860 received from the National Resilience Fund (NRF) for refund under the SME Scheme for participation in International Fairs have been recognized both as revenue and expenditure. An amount of MUR 17,281,787 also received from NRF for other projects has been recognized as ‘Other Revenue’ instead of Government Grant. 2.9 Related Party transaction There has not been any related party transaction for the year ended 31 December 2014. 60 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (Continued) 3. Year ending Year ending 31 December 2014 31 December 2013 (Restated) MUR MUR RECEIVABLES Staff Loan 65,500 98,167 Deposits 1,047,855 989,287 Other receivables 1,775,599 558,044 Short term car loan 2,539,241 2,210,228 5,428,195 3,855,726 61 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (Continued) 4. Property, plant and equipment Computer Office Equipment Equipment Rs Rs Motor Vehicles Rs Furniture Computerisation and Fittings Rs Rs Total Rs Cost At 1 January 2014 26,754,221 1,712,450 6,537,749 18,433,878 1,402,954 37,670 95,480 1,536,104 Written-off (2,199,649) (171,179) (234,350) (2,605,178) At 31 December 2014 25,957,526 1,578,941 5,582,749 18,295,008 30,531,768 81,945,992 24,292,541 1,448,080 3,891,749 14,116,090 23,908,681 67,657,141 1,369,013 99,190 1,818,976 5,479,607 Additions Disposal 30,531,768 (955,000) 83,970,066 (955,000) Depreciation At 1 January 2014 Charge for the period Disposal 62 1,104,000 1,088,428 (955,000) (955,000) Written-off (2,199,649) (171,179) (234,350) At 31 December 2014 23,461,905 1,376,091 4,040,749 14,970,168 Carrying amount at 31 December 2014 2,495,621 202,850 1,542,000 Carrying amount at 31 December 2013 2,461,680 264,370 2,646,000 (2,605,178) 25,727,657 69,576,570 3,324,840 4,804,111 12,369,422 4,317,788 6,623,087 16,312,925 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (Continued) 5. Year ending 31 December 2014 31 December 2013 (Restated) MUR MUR 18,158,038 12,914,714 GOVERNMENT GRANT Balance at beginning of year Received during the year 63 Year ending 1,536,104 11,056,368 Transfer to income and expenditure account (4,909,607) (5,813,044) Balance at end of period 14,784,535 18,158,038 Government Grant Short-term 3,722,823 4,614,087 Government Grant Long-term 11,061,712 13,543,951 14,784,535 18,158,038 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (Continued) 6. FINANCE LEASE LIABILITIES Not later than one year Later than one year and not later than five years Later than five years Present value of Payments Minimum lease payments 31.12.14 31.12.13 31.12.14 31.12.13 Rs Rs Rs Rs 136,401 447,624 133,840 409,886 - 136,401 - 133,839 - - 136,401 Less future finance charges 584,025 - 543,725 - 133,840 (40,300) 136,401 64 Minimum Lease 543,725 - 133,840 543,725 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (Continued) 7. RETIREMENT BENEFIT OBLIGATIONS The staff pension fund is wholly funded by the Board of Investment and is administered by State Insurance Company of Mauritius Ltd. The amounts recognised in the statement of financial position at end of year are as follows: Year ending Year ending 31 December 2014 31 December 2013 (Restated) MUR MUR Amounts recognised in statement of financial position at end of year: Present value of funded obligation (Fair value of plan assets) Present value of unfunded obligation Unrecognised actuarial gain/(loss) 48,646,656 46,574,119 (20,728,575) (20,097,662) 27,918,081 26,476,457 - - (18,294,913) (18,960,040) 9,623,168 7,516,417 Current service cost 1,638,645 1,730,319 Employee's Contribution (918,596) (1,005,916) Liability recognised in statement of financial Liability recognised in statement of financial position at end of year Amounts recognised in statement of financial performance: Fund expenses Interest cost (Expected return on plan assets) Actuarial loss/(gain) recognised Past service cost recognised Total included in staff costs 49,984 50,269 3,725,930 3,108,397 (1,583,424) (1,539,093) 572,105 315,538 - - 3,484,644 2,659,514 At start of year 7,516,418 6,365,778 Total staff cost as above 3,484,644 2,659,514 (Actuarial reserves transferred in) - - (Contributions paid by employer) Movements in liability recognised in statement of financial position: (1,377,894) (1,508,875) At end of year 9,623,168 7,516,417 Actual return on plan assets: 1,240,644 2,020,024 65 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (Continued) Year ending Year ending 31 December 2014 31 December 2013 (Restated) MUR MUR 8 ACCUMULATED SURPLUS/(DEFICIT) Balance at beginning of year (Deficit)/Surplus for the period Balance at end of year (19,281,043) (13,272,257) 1,916,983 (6,008,786) (17,364,060) (19,281,043) 183,227,800 157,397,000 (1,536,103) (11,056,368) 9 RECURRENT GRANT Amount received during the year Less amount devoted to capital expenditure Amount received for ICT Investment Forum 10 REVENUE FROM NON-EXCHANGE TRANSACTIONS Processing fee - Storage Permit 5,000,000 181,691,697 151,340,632 742,500 558,000 742,500 558,000 11 OTHER REVENUE Gain on disposal Sundry receipts 140,500 9,699,908 7,926,448 Contribution from NRF - Participation in International Fairs - SME - Other Projects Film Incentive Framework 3,686 , 970 4,184,860 9,378,406 17,281,787 43,963,113 66,868,897 66 29,393,095 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 (Continued) Year ending 31 December 2014 MUR 11 SALARIES AND EMPLOYEE BENEFITS Basic salaries Overtime End of year bonus Performance bonus Gratuity Pension Travelling Refund of leaves Passage Benefits Allowances 13 OTHER EXPENSES Board fees Rent Office supplies Telephone, fax and internet Motor Vehicle expenses Cleaning charges Advertising Insurance General expenses Professional fees Electricity and water charges Newspaper and publications Postage Repairs and maintenance Receivables written-off Loss on exchange Loss on disposal Interest charges ICT Investment Forum International Advisory Board Expenses Training and seminars 14 INVESTMENT PROMOTION Missions Investment promotion tools Seminars Promotional advertising Hospitality Participation in International Fairs - SME Film Incentive Framework 49,221,985 1,311,924 4,031,389 10,563,473 6,612,399 5, 176,522 7,241,891 1,560,402 2,336,821 3,890,819 91,947,625 1,900,000 9,692,092 2,608,477 4,186,296 1,559,607 279,291 42,346 263,809 4,470,446 14,392,140 2,177,049 72,782 23,792 1,243,222 2,027,528 37,738 2,010,282 46,986,897 27,746,517 3,698,621 30,577,282 3,105,790 305,594 3,686,970 43,963,113 113,083,887 Year ending 31 December 2013 (Restated) MUR 47,997,400 1,305,883 3,967,889 5,569,233 3,987,452 6,925,157 1,516,049 2,466,728 4,193,919 77 , 929,710 1,917,000 10,655,523 3,245,164 4,105,445 1,505,012 208,999 174,840 305,285 2,283,242 5,825,663 2,345,113 86,615 40,283 1,376,910 550,599 47,135 55,000 78,425 5,000,000 1,052,469 1,382,260 42,240,982 37,091,816 5,348,594 19,075,518 4,762,592 149,441 4,184,860 70,612,821 67 10th Floor, One Cathedral Square Building, 16, Jules Koenig Street, Port Louis, Mauritius Tel: +230 203 3800 | Fax: +230 210 8560 contact@investmauritius.com www.investmauritius.com