Report of the Auditors Pursuant to Section 44 of the Bank of Mauritius Act 1966

We have audited the financial statements of the Bank of Mauritius for the year ended 30 June 2000.

Respective Responsibilities of Management and Auditors

The Board of Directors and management of the Bank of Mauritius are responsible for the preparation of financial statements. It is our responsibility to form an independent opinion, based on our audit, on those statements and to report our opinion.

Basis of Opinion

We conducted our audit in accordance with International Auditing Standards and Mauritius Guidelines on Auditing. An audit includes an examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by management in the preparation of the financial statements, and of whether the accounting policies are appropriate to the bank’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatements. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Opinion

The profit for the year ended 30 June 2000 has been ascertained in accordance with Section 11 of the Bank of Mauritius Act 1966, and on this basis the accounts give, in our opinion, a true and fair view of the state of affairs of the Bank at 30 June 2000 and of the results of its operations for the year then ended.

Date: KPMG

Port Louis Public Accountant

Bank of Mauritius Balance Sheet at 30 June 2000

	2000	1999
	Rs	Rs
CAPITAL AND RESERVES
Authorised Capital	10,000,000	10,000,000
	===========	===========
Issued and Paid up Capital	10,000,000	10,000,000
General Reserve Fund	23,000,000	23,000,000
	-------------------	------------------
	33,000,000	33,000,000
Other Reserves	10,881,622,150	10,336,907,623
	-------------------	-------------------
	10,914,622,150	10,369,907,623
	===========	===========
ASSETS
External Assets:
Gold and Foreign Assets	6,390,472,496	4,695,353,173
Special Drawing Rights	566,353,870	537,215,154
Foreign Investments	10,380,815,393	10,063,072,714
Interest Receivable	117,161,714	19,233,477
	17,454,803,473	15,314,874,518
Discounts and Advances	2,279,881,084	4,960,726,505
Government Securities (At valuation)	1,899,108,042	1,322,424,878
Fixed Assets	191,440,365	167,320,928
Other Assets	155,446,382	161,801,614
	-------------------	-------------------
	21,980,679,346	21,927,148,443
Less: Liabilities
Notes in Circulation	6,431,939,805	6,615,336,230
Coins in Circulation	296,963,190	260,677,304
	6,728,902,995	6,876,013,534
Demand Deposits:
Government	43,043,741	41,279,522
Commercial Banks	3,024,210,243	3,447,771,728
Other Financial Institutions	21,486,121	29,269,915
Others	10,896,081	19,676,765
	3,099,636,186	3,537,997,930
Bank of Mauritius Instruments	258,133,400	287,101,400
Provisions and Other Liabilities	979,384,615	856,127,956
	-------------------	-------------------
	11,066,057,196	11,557,240,820
	-------------------	-------------------
	10,914,622,150	10,369,907,623
	===========	===========

Income and Expenditure Account (Abridged) for the year ended 30 June 2000

	2000	1999
	Rs	Rs
Income	1,258,404,465	1,426,191,432
Expenditure	(291,069,673)	(305,183,333)
	------------------	------------------
Surplus Income	967,334,792	1,121,008,099
Transfer to Reserve for Contingencies	(167,334,792)	(296,008,099)
	------------------	------------------
Profit available to Government of Mauritius in accordance with Section 11(2) (c)
of the Bank of Mauritius Act 1966	800,000,000	825,000,000
	==============	==============

(sd) R. Basant Roi (sd) B.R. Gujadhur (sd) Y. Googoolye

Governor Managing Director Director-Operations

Date:

Accounting Policies

Basis of preparation

The financial statements have been prepared under the historical cost convention as modified by the valuation of certain investments and in accordance with International Accounting Standards. A summary of the significant accounting policies adopted are given below.

Income recognition

Interest income is recognised in the profit and loss account on an accrual basis.

Depreciation

Depreciation is calculated so as to write off the cost of fixed assets on a straight line basis over their estimated useful economic lives.

The annual depreciation rates are as follows:

Premises	-	2%
Other properties	-	2%
Furniture, equipment, fixtures and fittings	-	10%
Motor vehicles	-	33.33%
Computer	-	25%

No depreciation is charged on freehold land.

Foreign currency translation

Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transactions. Differences arising from foreign currency transactions are included in the Income and Expenditure account.

External assets are translated at the rates of exchange ruling at the balance sheet date. Exchange differences arising on translation are taken to reserves.

Pensions

The Bank operates a non-contributory defined benefit scheme for the benefit of its employees which is managed by an independent insurance company. This pension scheme is actuarially valued from time to time as required and contribution rates adjusted accordingly. The pension cost charge is recognised in the period in which it is incurred.

Taxation

The Bank is exempt from Income Tax under Section 3 (3) of The Bank of Mauritius Act 1966.

Government securities

Mauritius Government Securities and Government of Mauritius Treasury Bills are valued in the accounts at market value. Any profit/loss on revaluation is accounted for in the Income and Expenditure account.