THE BEE EQUITY P ARTNERS L

Transcription

1 ANNUAL REPORT

2 Dear Shareholder, The Board of Directors is pleased to present the Annual Report of The Bee Equity Partners Ltd ( The Bee ) for the year ended 30 June This report was approved by the Board on 1 September On behalf of The Bee s Board of Directors, we cordially invite you to attend the Annual Meeting of the Company which will be held: Date: Friday 8 December 2017 Time: Place: hours 6 th Floor, IBL House Caudan Waterfront Port Louis The Notice for the meeting, containing the business to be transacted, is set out at pages 2 and 3. We look forward to seeing you. Sincerely, Jean-Claude Béga Chairman Olivier Fayolle Director

3 TABLE OF CONTENTS 1 02 Notice of Annual Meeting 04 Directorate and Administration 05 Overview 07 Directors Profiles 10 Investment Committee Members Profiles 12 Chairman s Message 14 CEO s Report 18 Corporate Governance Report 32 Statement of Compliance 34 Statement of Directors Responsibilities 35 Statutory Disclosures 40 Company Secretary s Certificate 41 Independent Auditor s Report 46 Statements of Financial Position 47 Statements of Profit or Loss and Other Comprehensive Income 48 Statements of Changes in Equity 49 Statements of Cash Flows 50 Notes to the Financial Statements 83 Proxy Form

4 2 NOTICE OF ANNUAL MEETING Notice is hereby given that the Annual Meeting of the Shareholders of The Bee Equity Partners Ltd will be held at 6 th Floor, IBL House, Caudan Waterfront, Port Louis on Friday, 8 December 2017 at hours to transact the following business in the manner required for the passing of the following RESOLUTIONS: AS ORDINARY RESOLUTIONS: 1. To consider the Annual Report. 2. To receive the report of the Auditors. 3. To consider and adopt the Group s and Company s audited financial statements for the year ended 30 June To elect, as Director of the Company, Mr. Jean-Claude Béga 1 who has been nominated by the Board and who offers himself for election. 5. To elect, as Director of the Company, Mr. Yann Duchesne 1 who has been nominated by the Board and who offers himself for election. 6. To re-elect as Director of the Company until the next Annual Meeting, in accordance with Section 138(6) of the Companies Act 2001, Mr. Dayanidhi Gujadhur 1, who offers himself for re-election. 7. To fix the remuneration of the Directors for the financial year ending 30 June 2018 and to ratify the emoluments paid to the Directors for the financial year ended 30 June To reappoint Messrs. Deloitte as Auditors for the ensuing year and to authorise the Board of Directors to fix their remuneration. 9. To ratify the emoluments paid to Messrs. Deloitte for the financial year ended 30 June AS SPECIAL RESOLUTION: 1. That Clause 23 of the Constitution of the Company under the heading APPOINTMENT AND REMOVAL OF DIRECTORS be amended by the addition thereto of the following New Sub Paragraph 23.7 and that the actual Sub Paragraphs 23.7 and 23.8 be renumbered accordingly: «23.7 Retirement of Directors by rotation. At the next Annual General Meeting of the Company and at each subsequent Annual General Meeting, two (2) Directors for the time being appointed by the General Meeting, shall retire from office but shall be re-eligible Any retiring Director shall retain office until the dissolution or adjournment of the meeting at which he is due to retire The Directors to retire in every year shall be those who have been longest in office since their last election, but as between persons who became Directors on the same day, those to retire shall, unless they otherwise agree among themselves, be determined by lot.

5 The Company at the Annual General Meeting at which a Director so retires may fill the vacated office by electing a person thereto but no person other than a retiring Director shall unless recommended by the Directors be eligible for election to the office of Director unless not less than twenty eight days before the last day on which notice of the Annual General Meeting of the Company is required to be given by the Board, there shall have been left at the registered office of the Company notice in writing, signed by a member duly qualified to attend and vote at the meeting for which such notice is given, of his intention to propose for consideration by the Board such person for election and also notice in writing signed by that person of his willingness to be elected. The decision of the Board shall be final.» By order of the Board Doris Dardanne Per IBL Management Ltd Company Secretary 1 September 2017 NOTES: 1. A shareholder of the Company entitled to attend and vote at this meeting may appoint a proxy of his/her own choice (whether a shareholder or not) to attend and vote on his/her behalf. The instrument appointing a proxy or any general power of attorney shall be deposited at the Share Registry and Transfer Office, Abax Corporate Administrators Ltd, 6 th Floor, Tower A, 1 CyberCity, Ebène not less than twenty four hours before the time appointed for the holding of the meeting or adjourned meeting at which the person named on such instrument proposes to vote, and in default, the instrument of proxy shall not be treated as valid. 2. A proxy form is included in this Annual Report and is also available at the Share Registry and Transfer Office of the Company. 3. For the purpose of this Annual Meeting, the Directors have resolved, in compliance with Section 120(3) of the Companies Act 2001, that the shareholders who are entitled to receive notice of the meeting shall be those shareholders whose names are registered in the share register of the Company as at 13 November The minutes of the Annual Meeting to be held on 8 December 2017 will be available for consultation and comments during office hours at the registered office of the Company, 4 th Floor, IBL House, Caudan Waterfront, Port-Louis from 2 February to 12 February Footnote 1 : The Directors profiles are set out on pages 7 to 9

6 4 DIRECTORATE AND ADMINISTRATION DIRECTORS Jean-Claude Béga - Chairman - Appointed Director on 16 January 2017 and Chairman on 13 February 2017 REGISTERED OFFICE 4 th Floor, IBL House Caudan Waterfront Port Louis Jan Boullé Yann Duchesne - Appointed Director on 16 January 2017 Olivier Fayolle AUDITORS Deloitte Dayanidhi Gujadhur Thierry Lagesse ALTERNATE DIRECTORS BANKERS The Mauritius Commercial Bank Limited AfrAsia Bank Limited Jean-Claude Béga - Appointed Alternate Director to Thierry Lagesse on 7 July 2017 Madhukar Gujadhur - Appointed Alternate Director to Dayanidhi Gujadhur on 13 July 2017 COMPANY SECRETARY IBL Management Ltd SHARE REGISTRY AND TRANSFER OFFICE Abax Corporate Administrators Ltd 6 th Floor, Tower A, 1 CyberCity Ebène

7 OVERVIEW 5 ABOUT US Founded in 1974, The Bee Equity Partners Ltd ( The Bee ) is an investment holding company specializing in providing alternative forms of financing to Mauritian entrepreneurs. Listed on the Development and Enterprise Market of the Stock Exchange of Mauritius, The Bee is a subsidiary of IBL Ltd, the leading conglomerate in Mauritius. Our strategy is to gradually redeploy our current investment portfolio into new attractive investment projects based on the private equity investment philosophy. Our mission is not only to achieve superior and consistent riskadjusted returns but also to invest with impact through fostering entrepreneurship in the local economy. We strive to differentiate ourselves through the support, guidance and access to network we extend to our investee companies. Our ambition is to become a partner of choice for bold entrepreneurs aspiring to establish, scale up or revamp their enterprises. FINANCIAL HIGHLIGHTS GROUP COMPANY Amounts in Rs * * Revenue 97, ,466 27,285 20,695 Profit attributable to the parent 44, ,305 46, ,835 Total comprehensive income/(loss) 3,663 (63,671) 8,064 (78,790) Total assets 550, , , ,308 Total equity 523, , , ,926 Dividends 2, , ,273 * In the year ended 30 June 2016, the Company distributed part of its portfolio of investments to its shareholders by way of a dividend in specie. The fair value of the shares distributed was Rs. 887 million on the date of distribution. As a result, the profit for the year was impacted positively by a Rs. 450 million gain on disposal - dividend in specie. KEY FINANCIAL INDICATORS COMPANY NAV per share (Rs) NAV total return* (%) +1.5% -5.3% Share price at year end (Rs) * Change in NAV plus dividends declared in rupee terms, as a percentage of the NAV at the beginning of the financial year. 26% 7% 9% Securities Portfolio - Sector mix 6% 5% 3% 1% 33% Total assets - Company % Financial Services Industry 7% Property Development % Securities Portfolio - Asset mix 10% 41% % Securities portfolio Investment property Receivables & Other Cash & Cash equivalents Local listed shares Local unlisted shares Bonds & Notes Hotel & Leisure Commerce Conglomerates Others

8 LEADERSHIP

9 7 DIRECTORS PROFILES 1 2 JEAN-CLAUDE BÉGA (Mr) Non-Executive Chairman First appointed to the Board on 16 January 2017 and as Chairman on 13 February 2017 Also appointed Member of the Investment Committee of the Company on 10 February 2017 and as Alternate Director to Mr. Thierry Lagesse on 7 July 2017 EDUCATION Born in 1963, Jean-Claude Béga is a Fellow of the Association of Chartered Certified Accountants. EMPLOYMENT HISTORY He started his career in 1980 by spending 7 years as external auditor and then moved to a sugar group to perform various functions within accounting and finance before joining GML in He has been nominated as Group Head of Financial Services and Business Development of IBL Ltd on 1 July 2016 following the amalgamation between Ireland Blyth Limited and GML Investissement Ltée. He currently heads IBL Group s financial services and business development including M&A, Strategic Initiatives and integration. In this context, he has been nominated as Chairman of The Bee Equity Partners Ltd, Mauritian Eagle Insurance Co. Ltd and DTOS Ltd. He is also Chairman of Anahita Estates Limited and Anglo African Investments Ltd and Director of Alteo Limited, Phoenix Beverages Limited, Lux Island Resorts Ltd, Afrasia Bank Limited and some other companies within the IBL Group. JAN BOULLÉ (Mr) Non-Executive Director Appointed in 2001 EDUCATION Jan Boullé is qualified as an «Ingénieur Statisticien Economiste» (France) and holds a «Diplôme de 3 ème Cycle en Sciences Economiques» from Université Laval (Canada). EMPLOYMENT HISTORY He has been employed by the Constance Group from 1984 to 2016 and occupied various executive positions and directorships. His latest position at Constance being Group Head of Projects and Development. He has been appointed as the Non-Executive Chairman of IBL Ltd on the 1 July 2016, the ultimate holding company of The Bee Equity Partners Ltd. BOARD MEMBERSHIPS AND AFFILIATIONS - Alteo Limited - IBL Ltd - Phoenix Beverages Limited - Phoenix Investment Company Limited - The Bee Equity Partners Ltd 1 2 BOARD MEMBERSHIPS AND AFFILIATIONS - Alteo Limited - Phoenix Beverages Limited - Phoenix Investment Company Limited - Lux Island Resorts Ltd - The Bee Equity Partners Ltd - Mauritian Eagle Insurance Co Ltd

10 8 DIRECTORS PROFILES YANN DUCHESNE (Mr) Non-Executive Director Appointed on 16 January 2017 OLIVIER FAYOLLE (Mr) Executive Director Appointed on 9 May 2016 DAYANIDHI GUJADHUR (Mr) Independent Non-Executive Director 3 4 EDUCATION Born in 1956, Yann Duchesne is graduated from Ecole Polytechnique, Ecole des Mines de Paris and Institut d Etudes Politiques de Paris. EMPLOYMENT HISTORY He has spent 12 years as Senior Partner at Private Equity firm Doughty Hanson in London. Prior to that, he has worked for 20 years at McKinsey where he was the Managing partner for France he has also extensively worked in the US, Japan and various European countries. He has wide experience in the Financial Institutions sector, Pharmaceuticals, Industrial sectors, and Luxury. Yann Duchesne is also the author of a socio-economic book (France S.A.) and is a Knight in the French national order of the Légion d Honneur. EDUCATION Born in 1979, he holds a MSc in International Financial Analysis from the University of Lille II, France. EMPLOYMENT HISTORY Before joining The Bee Equity Partners Ltd in April 2016, he worked as a Senior Financial Analyst at Octo Finances, a fixed-income securities brokerage firm based in Paris, France. BOARD MEMBERSHIPS AND AFFILIATIONS Is a member of the Board of Directors of Flacq Associated Stonemasters Ltd, Haute Rive Azuri Hotel Ltd, PL Resort Ltd, Mechanization Investment Ltd and The Ground Collaborative Space Ltd. Appointed in 2001 EDUCATION Born in 1937 obtained a distinction in Accounting at the higher stage of London Chamber of Commerce. EMPLOYMENT HISTORY Joined Roger Fayd herbe Co Ltd as Clerk in July After gaining extensive experience in the key departments of the company, he was promoted to the post of Accountant in 1978 and subsequently as Finance and Administrative Manager. BOARD MEMBERSHIPS AND AFFILIATIONS Was invited to join the Board of Directors of Roger Fayd herbe Co Ltd In 1988 until his retirement from the company in December BOARD MEMBERSHIPS AND AFFILIATIONS 5 - IBL Ltd - The Bee Equity Partners Ltd

11 9 6 THIERRY LAGESSE (Mr) Non-Executive Director Appointed in 1992 and Chairman up to 12 August ALTERNATE DIRECTOR MADHUKAR GUJADHUR (Mr) Alternate Director to Mr. Dayanidhi Gujadhur Appointed on 13 July 2017 EDUCATION Born in 1953, he holds a Maîtrise des Sciences de Gestion from the University of Paris Dauphine. EMPLOYMENT HISTORY He was the Non-Executive Chairman of IBL Ltd (previously known as GML Investissement Ltée), Alteo Limited, Phoenix Beverages Limited and The United Basalt Products Ltd up to 13 August 2013 and a Director of several other companies quoted on the Stock Exchange of Mauritius Ltd. He is also the Executive Chairman and founder of Palmar Group of Companies and Executive Chairman of Parabole Réunion SA. BOARD MEMBERSHIPS AND AFFILIATIONS - Alteo Limited - IBL Ltd - Lux Island Resorts Limited - Phoenix Beverages Limited - Phoenix Investment Company Limited - The United Basalt Products Ltd EDUCATION Born in March 1954, Mr. Gujadhur was admitted as Member of ACCA in EMPLOYMENT HISTORY From September 1988 to March 2006 Mr. Madhukar Gujadhur was the Financial Controller of Sun Resorts Ltd. From April 2006 to March 2014 he was the Director of Finance - O&O Royal Mirage Hotel (Dubai) owned by Ruler of Dubai. Since April 2014 to now, Mr. Gujadhur is the Financial Controller of CH Management Ltd (Currimjee Group). BOARD MEMBERSHIPS AND AFFILIATIONS None 6 7

12 10 INVESTMENT COMMITTEE MEMBERS PROFILES 1 2 MUSHTAQ OOSMAN (Mr) Member of the Investment Committee Appointed as Member on 15 April 2017 and as Chairman on 9 May 2017 EDUCATION Born in Mauritius, Mr Oosman is a fellow of the Institute of Chartered Accountants in England and Wales. EMPLOYMENT HISTORY After completing his studies in the UK, Mr. Oosman joined De Chazal Du Mee in In 1985 he joined Roger de Chazal and Partners now PwC. Over the years together with other Partners PwC grew to become one of the largest firm on the island. JEAN-CLAU DE BÉGA (Mr) Member of the Investment Committee Appointed as Member of the Investment Committee of the Company on 10 February 2017 First appointed to the Board of Directors of the Company on 16 January 2017 and as Non-Executive Chairman on 13 February Also appointed as Alternate Director to Mr. Thierry Lagesse on 7 July EDUCATION Born in 1963, Jean-Claude Béga is a Fellow of the Association of Chartered Certified Accountants. EMPLOYMENT HISTORY He started his career in 1980 by spending 7 years as external auditor and then moved to a sugar group to perform various functions within accounting and finance before joining GML in He has been nominated as Group Head of Financial Services and Business Development of IBL Ltd on 1 July 2016 following the amalgamation between Ireland Blyth Limited and GML Investissement Ltée. He currently heads IBL Group s financial services and business development including M&A, Strategic Initiatives and integration. In this context, he has been nominated as Chairman of The Bee Equity Partners Ltd, Mauritian Eagle Insurance Co. Ltd and DTOS Ltd. He is also Chairman of Anahita Estates Limited and Anglo African Investments Ltd and Director of Alteo Limited, Phoenix Beverages Limited, Lux Island Resorts Ltd, Afrasia Bank Limited and some other companies within the IBL Group.

13 CATHERINE GRIS (Mrs) Member of the Investment Committee Appointed on 15 April 2017 NICOLAS WEISS (Mr) Member of the Investment Committee Appointed on 15 April 2017 EDUCATION Born in Mauritius in 1958, Mrs. Catherine Gris obtained her Baccalaureat in 1976 and is since 1980 a Graduate of the Institute of Political Studies (Paris). In 2004 she completed a Cycle of Higher Studies of Economic Development Ministry of Finance & Economy ( Bercy) Paris. EMPLOYMENT HISTORY Between Reunion Island and Mauritius since 2009, Mrs. Gris is the CEO of Association of Mauritian Manufacturers. She was involved in the creation in 2013 of the Mauritian Umbrella Brand of local products «Made in Moris». Mrs. Gris is Member of the Mauritius section of the French CCEF- The French Foreign Trade Advisors (CCEF) since 2007 and between 1998 and 2006 she acted as Secretary General ADIR (Association pour le développement industriel de la Réunion). EDUCATION Ingenieur des Télécoms ESSEC Business School - MBA Degree, Cranfield University (UK) EMPLOYMENT HISTORY Nicolas Weiss is a Telecommunications engineer. He started his career in 1988 at Deltabanque, where he developed an interest rate risk management system. He later developed portfolio insurance and market arbitrage models. In 1991, he joined Mr. Philippe Oddo and helped raise the clientele of Institutional Investors for mutual funds actions, bonds and derivatives. In 1993, he joined Mr. Le Baron Edmond de Rothschild and was General Manager and Shareholder to the creation of AssMgt subsidiaries of the Rothschild Group in Europe Rothschild Asset Management (EUR20bn), E.de AssMgt Rothschild Investment Services (USD4bn), and Rothschild Multi Management (EUR5bn). Nicolas Weiss was also director and treasurer for Rothschild Fundations since He left the Rothschild Group in 2010 to settle in Mauritius. Nicolas Weiss has been teaching finance at ESSEC, at Paris Dauphine and at Arts et Métiers. He is a jury member at ESSEC since 1987.

14 12 CHAIRMAN S MESSAGE Dear Shareholders, It is my honour and privilege to address you for the very first time as Chairman of the Board of Directors of The Bee Equity Partners Ltd. At this turning point in the life of our Company, it is the Board s utmost priority to ensure that we successfully implement our revamped strategy based on the private equity investment philosophy. Our ultimate goal is not only to achieve superior and consistent risk-adjusted returns but also to invest with impact. By committing our capital and trust to Mauritian entrepreneurs, we will actively participate in fostering entrepreneurship in the local economy. JEAN-CLAUDE BÉGA CHAIRMAN «Our ultimate goal is not only to achieve superior and consistent risk-adjusted returns but also to invest with impact»

15 13 We are determined to accomplish our strategy smartly and in a systematic yet disciplined manner. We shall be committing our resources only in projects which we deem to show above average potential. We believe that, by being selective, we will optimise our chances of generating competitive risk adjusted returns whilst promoting the sound functioning of capital markets and the economy at large. One of the cornerstone of our investment methodology is our Investment Committee ( IC ). The IC is fully operational since April 2017 and comprises of carefully selected members with outstanding professional track records. Those individuals whilst operating as a unit, possess a wealth of experience and the complementary skills required to critically evaluate and assess projects brought forward by the Management. The Board of Directors will remain the final decision-making body and will use the IC s views and recommendations in that context. Whilst consolidating our deals pipeline and executing on our strategy, it is of crucial importance to ensure that the productivity of our capital remains constantly optimized. In that respect, our 2017 performance was below expectations with a minimal progression of 1.5% on our 2016 NAV. This subdued performance was mostly due to the poor performance of our hospitality holdings which have been counter balanced by our other portfolio holdings which recorded honourable performances. An important item on the agenda of the Board during the year was related to the voluntary Offer made by Equity Spectrum Ltd to acquire all the shares of the Company. In that matter, the Board advised on declining the offer in light of the recommendations of the independent valuer and the offer lapsed given that the condition set out in the offer had not been met. In the forthcoming financial year, we shall strive to rebalance our investment portfolio into a more diversified structure. In doing so, we aim to optimize our desired returns on our portfolio holdings whilst enabling us to realise the liquidity required for our private equity investment activities. «Whilst consolidating our deals pipeline and executing on our strategy, it is of crucial importance to ensure that the productivity of our capital remains constantly optimized.» Our roadmap is clear and the Board undertakes to oversee that the Management executes those strategic objectives efficiently. I would like to express my gratitude towards my fellow Directors for entrusting me with the role of Chairman of the Board and welcome our IC members who accepted to share their wisdom on the new journey of the Company. My thanks also go to our former Chairman, Mr. Arnaud Lagesse, who instilled a bold new vision and impetus to the Company that we shall endeavour to sustain for the benefit of all our stakeholders. Yours sincerely, Jean-Claude Béga Chairman

16 14 CEO S REPORT I am pleased to report on the performance and progress of the Company for the year ended 30 June Although most of our investments fared well during the year under review, our overall financial performance was hampered by sizeable impairment losses incurred on our two hospitality holdings. The Company NAV increased marginally to Rs per share, thereby generating a disappointing total return of 1.5% for our shareholders. Nonetheless, notable strategic realisations were achieved during the year. Through various transactions, we generated proceeds in excess of Rs 100 million from the disposal of mostly mature, illiquid investments. A significant transaction to the tune of Rs 80 million involving a pool of low-yielding, unlisted minority investments, was executed. Through those realisations, we crystallized capital gains totalling Rs 78.3 million while strengthening our capacity to participate in attractive new investment projects. We laid down the foundations of our revamped private equity-based investment strategy and devised our objectives accordingly. Human capital investments were effected and appropriate framework and processes were put in place to help mitigate risks associated with the new strategy. Our network and ecosystem of partners was reinforced. We are positioning The Bee as a credible and robust player on the Mauritian financial market landscape providing alternative forms of financing to entrepreneurs. We are confident that we are now properly geared to live up to the expectations of our stakeholders. OLIVIER FAYOLLE CEO

17 15 NAV PROGRESSION HAMPERED BY IM- PAIRMENT LOSSES Investment portfolio valuation Rs million The Net Asset Value of the Company increased by a minimal 1.5% over the year to Rs per share as at 30 June This subdued performance was essentially attributable to sizeable impairment losses incurred on our two hospitality associates. The operating and financial performance of the hotels materially improved as the year went through. Nonetheless, in accordance with prudential accounting practices, we had to impair our investments following years of recurring losses and debt accumulations. A provision was also booked on a proportion of the loans advanced to the entities. Those losses and provisions amounted to Rs 49.2 million in total, translating into a 9% unfavourable impact on our NAV As at 30 June Increase in fair value (46.3) Impairments (100.0) Disposals As at 30 June NAV (30 June 2016) 43.2 Fair value gains Change in Company NAV Rs million 27.3 Revenue 7.4 Interest income (11.1) (46.3) (11.8) (0.6) Administrative expenses Impairments Provisions Others NAV (30 June 2017) Following the disposal transactions executed during the year, the relative proportion of listed shares and bonds in the portfolio increased from 34% as at 30 June 2016 to 55% as at 30 June 2017, thereby improving the overall liquidity of our portfolio holdings. At year end, local unlisted shares accounted for 41% of the total portfolio, out of which 28% attributable to FAST. Investment Portfolio - Asset mix % 41% 7% REBALANCING OF THE INVESTMENT PORT- FOLIO The investment portfolio, constituting of listed and unlisted securities, delivered a total return of 4.9% over the year. Excluding the above mentioned underperforming assets, the portfolio generated a total return of 15% mainly on the back of the overall appreciation of our listed securities. The portfolio was valued at Rs million as at 30 June 2017 compared to Rs million as at 30 June 2016 with the decrease primarily attributable to disposals. The proceeds have been re-invested in short term money-market instruments pending subsequent re-deployment into our private equity activity % Local listed shares Local unlisted shares Bonds & Notes Rs60.88 NAV per share as at % 30%

18 16 CEO S REPORT Top 10 holdings Asset class Market Valuation At 30 June 2017 Rs '000 Weighting MCB Group Limited Ordinary shares SEM - Official 108,800 35% Flacq Associated Stonemasters Ltd Ordinary shares Unlisted 88,181 28% United Investments Ltd Bonds DEM 20,006 6% BlueLife Limited Ordinary shares SEM - Official 16,439 5% SBM Holdings Ltd Ordinary shares SEM - Official 12,851 4% Structured note - Capital protected (USD) Notes Unlisted 12,743 4% ACM High Yield Fund CIS* Unlisted 12,343 4% The Stock Exchange of Mauritius Ltd Ordinary shares Unlisted 9,470 3% Mauritius Oil Refineries Limited Ordinary shares SEM - Official 6,506 2% Vivo Energy Mauritius Limited Ordinary shares SEM - Official 5,171 2% * Collective Investment Scheme The portfolio s sector allocation was inclined towards financial services with a 46% weighting as at 30 June Our subsidiary FAST was the main constituent of the Industry sector allocation. 33% Investment Portfolio - Sector mix 46% 6% 5% Financial Services 3% 1% Industry 7% Property Development 2017 Hotel & Leisure Commerce Conglomerates Others PROFITS DRIVEN BY GAINS ON DISPOSALS At Company level, revenue increased by 32% to Rs 27.3 million due to a special dividend of Rs 8.5 million received from an investee company currently in the process of a voluntary winding up. The investment, carried at Rs 8.0 million in our books as at 30 June 2016, was consequently written off as at 30 June ,675 Company revenue Rs ,521 7,380 5,019 1,278 Dividends - Unlisted shares Interests - Listed bonds 640 Total: 20,695 8,467 Total: 27,285 Dividends - Listed shares One-off dividend Other operating income totalled Rs 89.8 million for the year, including interest income of Rs 7.4 million (2016: Rs 5.1 million) and gains on disposals of Rs 78.3 million (2016: Rs 450 million), of which Rs 77.9 million (2016: Rs 450 million) were recycled from fair value reserves. The increase in interest income resulted from higher cash & cash equivalents holdings in 2017 as compared to the previous year. In 2016, other operating income included Rs 450 million of gains reclassified from equity following the distribution of a substantial part of the investment portfolio to the shareholders of the Company by way of a dividend in specie. Total comprehensive income/(loss) amounted to Rs 8.1 million for the year compared to Rs (78.8) million in An appreciation of Rs 39.1 million in fair value of securities compensated impairment losses incurred during the year.

19 17 7% Simplified Statement of Profit or Loss & Other Comprehensive Income The Company Amounts in Rs ' Revenue 27,285 20,695 Other operating income 89, ,074 Impairment losses (46,252) (58,042) Provisions (11,810) - Administrative expenses (11,133) (18,429) Tax expense (1,111) 537 Profit for the year 46, ,835 Other comprehensive loss (38,761) (478,625) Total comprehensive income / (loss) 8,064 (78,790) On a consolidated basis, the results of the Group also fell short of expectations. Revenues dropped by 12% to Rs 97.8 million due to challenging operating environment for FAST whose turnover dropped by 20% to Rs 79.6 million. Our subsidiary s volume of activity was dragged down by the downward trend in construction projects in the eastern region. Group profit amounted Rs 45.9 million for the year. IMPROVED LIQUIDITY OF THE ASSET BASE Although the Company s total assets quantum remained stable over the year, the asset mix incurred a major overhaul with cash & cash equivalents representing 26% of the total assets as at 30 June 2017 as compared to 6% as at 30 June The Company received in excess of Rs 100 million from disposal proceeds during the year. 26% 2017 % of total assets 8% 7% 6% 2016 The investment property consists in a plot of freehold land situated at Queen Victoria in the district of Flacq. REVISITING THE INVESTMENT STRATEGY During the last financial year, our primary focus was on conceiving, structuring and implementing the Company s new strategy and business model. The Board approved a five-year investment plan whereby a minimum of Rs 200 million shall be allocated to private equity and venture capital transactions. Our aim is to stimulate our investment portfolio returns over the long run whilst at the same time participating actively in fostering entrepreneurship in Mauritius. Our ambitions are to execute an average of 2 private equity transactions per financial year in the coming five years at an average ticket size ranging from Rs 10 million to Rs 40 million in significant yet non-controlling stakes. We target high potential projects/enterprises capable of generating remarkable returns over our holding period of around 5-7 years. For the forthcoming year, our focus will essentially be two-fold: - Rebalance our investment portfolio and re-deploy our cash holdings into liquid investments pending our progressive endeavours into the private equity landscape; and - Securing recurring quality deal flow and reinforcing our network of partners to accelerate the implementation of our private equity strategy. ACKNOWLEDGEMENTS I would like to seize the opportunity to express my thanks to my fellow directors for their support and trust, and in particular to Mr. Jean-Claude Béga who took over the chairmanship of the Board as from 13 February It is also my great privilege to express my appreciation to the former directors who ceased to hold office during the year, especially our former Chairman, Mr. Arnaud Lagesse who inspired and drove the new strategy of the Company. My thanks finally go to Ms. Catherine Gris, Mr. Nicolas Weiss and Mr. Mushtaq Oosman for their invaluable counsel on The Bee s Investment Committee. 9% 58% Investment portfolio Receivables & Other Investment property Cash & Cash Equivalents 79% Olivier Fayolle CEO

20 18 CORPORATE GOVERNANCE REPORT The Bee Equity Partners Ltd ( The Bee or the Company ) is a public company incorporated on 9 October 1974 and is listed on the Development & Enterprise Market ( DEM ) of the Stock Exchange of Mauritius Ltd. COMPLIANCE In view of constantly ensuring the protection of shareholders interests and enhancing ethical business conduct in the decision-making processes, the Board and the management of The Bee reiterate their commitment to maintaining high standards of corporate governance. The representatives of The Bee on the boards of the investee companies also ensure that sound governance practices are applied on these boards. In the light of its experience, of regulatory requirements and of shareholders expectations, the Board recognises the need to adapt and constantly improve the good governance principles and practices. As such, the Board and management of the Company expressed their willingness to take the necessary measures to adopt, as requested, by end of year 2018, the provisions of the new Code of Corporate Governance for Mauritius (2016), which is based on an apply and explain basis. Meanwhile, The Bee which is a Public Interest Entity applies the Code of Corporate Governance for Mauritius 2003 (the Code ) which is based on a comply or explain basis and presents its Corporate Governance Report 2017 in this section. GROUP SHAREHOLDING STRUCTURE IBL LTD 34.95% OTHER SHAREHOLDERS 65.05% THE BEE EQUITY PARTNERS LTD FLACQ ASSOCIATED STONEMASTERS LIMITED (FAST) 80.53% 20.97% HAUTE RIVE AZURI HOTEL LTD PL RESORT LTD 40% OTHER INVESTMENTS* * Note 9 of the Financial Statements

21 19 COMMON DIRECTORS The Directors of The Bee who also sit on the Board of its holding company at 30 June 2017 are as follows: THE BEE IBL LTD Jean-Claude Béga * Jan Boullé * Yann Duchesne Olivier Fayolle Dayanidhi Gujadhur Thierry Lagesse * Chairman MAIN SHAREHOLDERS The 10 largest shareholders of The Bee as at 30 June 2017 are set out below: Type of Shares Number of Shares Owned % of Total Issued Shares IBL Ltd Ordinary 3,083, The MCB Ltd (A/C The MDIT Co Ltd) Ordinary 341, The MCB Ltd (A/C Ste de Courcelles) Ordinary 314, P.O.L.I.C.Y LTD Ordinary 172, Mr. Robert John & Mrs J.M. Jacqueline Russel Ordinary 172, M. I. Kathrada & Sons Ltd Ordinary 118, Mr. Marie Joseph Robert Lagesse Ordinary 112, Sugar Insurance Fund Board Ordinary 84, The MCB Ltd (A/C Rogers Money Purchas Retir Fund) Ordinary 71, Mr. M J Alfred Lincoln Ordinary 66,

22 20 CORPORATE GOVERNANCE REPORT SHAREHOLDING PROFILE The share ownership and categories of shareholders at 30 June 2017 are set out below: Number of Shareholders Size of Shareholding Number of Shares Owned % of Total Issued Shares 1, shares 165, ,000 shares 184, ,001-5,000 shares 923, ,001-10,000 shares 538, ,001-50,000 shares 2,169, , ,000 shares 523, , ,000 shares 576, , ,000 shares 655, Over 500,000 shares 3,083, ,241 8,820, Number of Shareholders Category of Shareholders Number of Shares Owned % of Total Issued Shares 2,081 Individuals 3,879, Insurance and Assurance Companies 134, Pension and Provident Funds 433, Investment and Trust Companies 54, Other Corporate Bodies 4,318, ,241 8,820, Number of Shareholders Category of Shareholders Number of Shares Owned % of Total Issued Shares 2,206 Local 8,679, Foreign 141, ,241 8,820,

23 21 SHARE REGISTRY AND TRANSFER OFFICE Abax Corporate Administrators Ltd is the Share Registry and Transfer Office of The Bee and as such, is responsible for maintaining the Company s register of shareholders. For any enquiries on shareholding, such as updating personal details, checking the shareholding and dividend payments, they can be contacted by telephone on (230) or in writing at Abax Corporate Administrators, 6 th Floor, Tower A, 1 CyberCity, Ebène. COMMUNICATION WITH SHAREHOLDERS By regularly disseminating information to the market concerning the Company s performance and financial position throughout the year, the Board of The Bee ensures that a high degree of transparency is preserved. The calendar hereunder illustrates the important shareholders events: Financial Year End June Last Annual Meeting of Shareholders November 2016 Publication of half year results to 31 December 2016 Publication of third quarter results to 31 March 2017 Publication of full year results to 30 June 2017 Publication of first quarter results to 30 September 2017 February 2017 May 2017 September 2017 November 2017 Annual Report November 2017 Next Annual Meeting December 2017 As required by Law, The Bee produces and publishes quarterly, half-yearly and annual reports which are also submitted to the Stock Exchange of Mauritius Ltd and the Financial Services Commission. In addition to compliance with periodic reportorial requirements, the Board places great importance on an open and transparent communication with all the stakeholders of the Company and as such ensures that the Company promptly discloses to its stakeholders and the public at large, any market sensitive information. One of the most important shareholders related events is the Annual Meeting of the Company. This meeting, which is the principle forum for dialogue with shareholders, aims at providing to all shareholders up-to-date and comprehensive information in an efficient manner. The shareholders of the Company are encouraged to attend the Annual Meeting to discuss with the Directors and Chairman of the Company about various issues. The External Auditors of the Company namely Messrs. Deloitte are invited to attend the Annual Meeting and are available to shareholders to answer questions relevant to their scope of work. THE BEE S CONSTITUTION The Constitution of the Company which has been adopted on 19 December 2003, is in conformity with the provisions of the Companies Act 2001 and of the Development & Enterprise Market Rules. The main clauses of this Constitution are set hereunder: The Board shall consist of not less than 5 and not more than 8 Directors. The Board is actually composed of 6 Directors and the quorum is 4 Directors. The Directors shall have power at any time and from time to time, to appoint any person to be a Director, either to fill a casual vacancy or as an addition to the existing Directors but so that the total number of Directors shall not at any time exceed 8. The Company is authorized to purchase or otherwise acquire its shares in accordance with, and subject to, sections 68 to 74, 106 and 108 to 110 of the Act, and may hold the acquired shares in accordance with section 74 of the Act. There shall be a quorum for holding a General Meeting if 3 Shareholders are present or represented. A copy of the Constitution is available upon request in writing to the Company Secretary at the Registered Office of the Company, 4 th Floor, IBL House, Caudan Waterfront, Port Louis.

24 22 CORPORATE GOVERNANCE REPORT SHARE PRICE INFORMATION At the date of the approval of this Corporate Governance Report by the Board (on 1 September 2017), the share of The Bee is quoted at Rs on the Development & Enterprise Market of the Stock Exchange of Mauritius. Date Price (Rs) 30 June June June June * 30 June ** * In the year ended 30 June 2016, the Company transferred part of its investment portfolio to its shareholders by way of a dividend in specie valued at Rs per share at time of distribution. ** On 25 May 2017, the Company announced that it had received a letter from Equity Spectrum Ltd specifying the latter s firm intention to offer to acquire 100% of the shares of The Bee at a price of Rs per share, payable in cash. DIVIDEND POLICY The Company has no formal dividend policy. The dividend payout is subject to the performance of the Company and to the forthcoming funding needs. As required by the Companies Act 2001, for each declaration of dividend, the Directors ensure that the Company satisfies the solvency test and accordingly, sign a certificate confirming that the Company is solvent. A shareholder having dividend paid by cheque may request Abax Corporate Administrators Ltd to be paid directly into a bank account on the same day that the dividend is paid. This might be more convenient to reduce the risk of cheques being lost or delayed by the post. Upon payment of dividend directly into a bank account, the shareholder will receive the associated credit advice at his registered address. No dividend was declared by the Company for the year ended 30 June For the year ended 30 June 2016, the Company made a distribution to its shareholders, as a dividend in specie, of all the shares it held in AfrAsia Bank Limited, Alteo Limited, Ireland Blyth Limited, Lux Island Resorts Ltd and The United Basalt Products Ltd, representing the equivalent of a distribution of Rs per share on the date of distribution. The shareholders of the Company registered at close of business on 21 January 2016 was entitled, for each share held in the stated capital of the Company, to: shares of AfrAsia Bank Limited shares of Alteo Limited shares of Ireland Blyth Limited shares of Lux Island Resorts Ltd shares of The United Basalt Products Ltd BOARD OF DIRECTORS Role and responsibilities of the Board The Board of Directors, under the chairmanship of Mr. Jean-Claude Béga, is committed to the highest standard of business integrity, transparency and professionalism in all its activities, so as to achieve continuing prosperity for the Company. It also ensures that the activities within the Company are managed ethically and responsibly in line with the relevant laws and regulations so as to protect and enhance shareholder value. The Board is not only responsible for the setting up of the Company s strategic objectives, values and standards but is equally liable for the performance and affairs of the Company. Since the Board of The Bee is accordingly accountable to shareholders for the proper management of the Company s affairs, the Directors are committed to achieving and building a sustainable business so as to generate shareholder value.

25 23 Composition of the Board The Bee is managed by a unitary Board of 6 members, 1 of whom is an Executive Director, four of whom are Non-Executive Directors and 1 of whom is an Independent Non-Executive Director. The Board recognises that one of the provisions of the Code is to have two Independent Non-Executive Directors on the Board. However, on 31 March 2017, one of the Independent Non-Executive Directors, namely Mr. Cédric Doger de Spéville resigned as Director of the Company and has not yet been replaced. With regard to the requirement of the Code of having at least two Executive Directors on the Board, the Directors are of opinion that given the size and the structure of the Company, no additional benefits would be derived for the time being in appointing another Executive Director. Since the publication of the last Annual Report of The Bee, the following changes occurred in the composition of the Board: Mr. Laurent de la Hogue resigned as Director of the Company on 16 January Messrs. Jean-Claude Béga and Yann Duchesne were appointed as Directors of the Company on 16 January Mr. Arnaud Lagesse resigned as Chairman and Director of the Company on 13 February Mr. Jean-Claude Béga was appointed Chairman of the Board on 13 February Mr. Cédric Doger de Spéville resigned as Director of the Company on 31 March Mr. Jean-Claude Béga was appointed Alternate Director of the Company to Mr. Thierry Lagesse on 7 July Mr. Madhulkar Gujadhur was appointed as Alternate Director of the Company to Mr. Dayanidhi Gujadhur on 13 July The members of the Board are of appropriate calibre and have a range of skills and experience that allow them to exercise an independent judgement in managing and monitoring the affairs of the Company. The Board has unrestricted access to the records of the Company and also has the right to seek independent professional advice at the expense of the Company, to enable it to discharge its responsibilities effectively. Chairman of the Board Mr. Jean-Claude Béga who took over the chairmanship of the Board from Mr. Arnaud Lagesse since February 2017 is responsible for interaction with shareholders and stakeholders of the Company. As Chairman of the Board, Mr. Jean-Claude Béga has the primary function to preside over the meetings of Directors and ensure smooth functioning of the Board in the best interests of good governance. Mr. Jean-Claude Béga provides overall leadership to the Board and ensures its effectiveness by encouraging the active participation of each Director in board discussions and board decisions. Role and Function of the Chief Executive Officer Mr. Olivier Fayolle, the Chief Executive Officer of The Bee, is responsible for the day-to-day running of the Company s business activities. His role and functions are separate from that of the Chairman and as Chief Executive Officer, he is responsible amongst others for: Developing and recommending to the Board annual business plans and budgets that support the Company s long-term vision and strategy; Ensuring that the Company s strategy and policies are implemented; Ensuring that the Company s financial and operating objectives are achieved; and Maintaining a close working relationship with the Chairman.

26 24 CORPORATE GOVERNANCE REPORT DIRECTORS APPOINTMENT In accordance with the Company s Constitution, the Board may fill vacancies or newly-created directorships on the Board that may occur between annual meetings of shareholders, but so that the total number of Directors shall not at any time exceed the number fixed in accordance with the Constitution. Newly appointed Directors are subject to election by shareholders at the Company s Annual Meeting in their first year of appointment. Directors of 70 years old or more are also re-elected each year at the Annual Meeting of Shareholders in accordance with Section 138(6) of the Companies Act However, despite the Code s recommendation for the reelection of all Directors each year, at Company s level it has not been current practice to re-elect all the Directors, since the Constitution of the Company does not provide for such reelection at the Company s Annual Meeting. The Board will however consider reviewing the Constitution of the Company to enable such re-election. Training and Development Upon appointment to the Board, Directors receive a complete induction pack from the Company Secretary, as well as a leaflet on his duties and responsibilities as Director. Moreover, the Board encourages all its members to keep on enhancing their knowledge and competencies through development programmes offered by various institutions such as the Mauritius Institute of Directors. BOARD MEETINGS The Board has 4 scheduled meetings each year. In addition, special meetings may be called from time to time as determined by the needs of the business. It is the responsibility of the Directors to attend meetings. Board meetings are convened by giving appropriate notice after obtaining approval of the Chairman. As a general rule, detailed agenda, management reports and other explanatory statements are circulated in advance amongst the Directors to facilitate meaningful, informed and focused decisions at the meetings. A quorum of 4 Directors is currently required for a Board meeting and in case of equality of votes, the Chairman has a casting vote. Even though it is the general policy of the Company to hold a Board Meeting in each quarter, for the year under review, the Directors met only on 3 occasions since the quorum requirements for the meeting scheduled in September 2016 was not met. Therefore, decisions were taken by way of a circularised written resolution signed by all Directors. There were 3 Board Meetings during the year under review whereby the Directors considered and adopted amongst others: The ratification of the appointment of Mr. Olivier Fayolle as Director representing The Bee on the Boards of Flacq Associated Stonemasters Ltd, Haute Rive Azuri Hotel Ltd and PL Resort Ltd; The transfer of 5,130 shares representing 51.3% of the share capital of The Ground Collaborative Space Ltd to IBL Ltd; The disposal of minority investments in 5 unlisted companies for a total consideration of Rs 80 million; The guidelines and objectives of the new strategy brought forward by the Chief Executive Officer including the settingup of a portfolio of unquoted investments to be managed in accordance with the private equity investment approach; The setting-up of an Investment Committee for the Company; The Terms of reference of the Investment Committee defining the mandate, the responsibilities and the functioning of the latter; The condensed unaudited financial statements for the quarter and half-year at 31 December 2016; The appointment of Mr. Jean-Claude Béga as Chairman of the Board in replacement of Mr. Arnaud Lagesse; The appointment of Mr. Jean-Claude Béga as member of the Board sitting on the Investment Committee; The adherence of the Board and the Management of The Bee to the Mission, Vision and Values of the IBL Group.

27 25 The Directors also adopted amongst others by way of written resolutions during the year under review: The Company s and the Group s audited financial statements at 30 June 2016 and the relevant abridged audited annual financial statements; The Corporate Governance Report 2016; The convening of the Annual Meeting 2016; The appointments of Messrs. Jean-Claude Béga and Yann Duchesne as Directors of the Company; The condensed unaudited financial statements for the quarter and nine months ended 31 March 2017; The appointment of Messrs. Mushtaq Oosman, Nicolas Weiss and Mrs. Catherine Gris as members of the Investment Comittee The appointment of Mr. Mushtaq Oosman as Chairman of the Investment Committee of The Bee; The publication of a Public Announcement following the receipt of a Firm Intention from Equity Spectrum Ltd to acquire the total shareholding of The Bee pursuant to provisions of the Securities (Takeover) Rules 2010; That Abax Corporate Administrators Ltd, the registry of The Bee be allowed to communicate to Equity Spectrum Ltd the detailed list of shareholders of The Bee and in general provide information in the context of the firm intention of Equity Spectrum Ltd to acquire the total shareholding of The Bee. After the closing of the financial year ending 30 June 2017, the Directors also adopted amongst others by way of written resolutions: The appointment of Mr. Jean-Claude Béga as Alternate Director of the Company to Mr. Thierry Lagesse; The appointment of Mr. Madhukar Gujadhur as Alternate Director of the Company to Mr. Dayanidhi Gujadhur; The appointment of Messrs. Ernst & Young Ltd as Independent Adviser to the Board of The Bee pursuant to Rule 21 of the Securities (Takeover) Rules 2010, following the Offer Document sent by Equity Spectrum Ltd to the shareholders of The Bee; The approval of the Reply Document to be sent to shareholders of The Bee pursuant to Rule 18 of the Securities (Takeover) Rules At a Board Meeting held in July 2017, the Directors also adopted amongst others: The recommendation of the Board to the shareholders of The Bee not to sell their shares as per the Offer made to them by Equity Spectrum Ltd; The approval of a draft version of the Reply Document to be sent to shareholders of The Bee. The representative of IBL Management Ltd, Company Secretary is responsible for taking accurate and precise board minutes which are then submitted for approval at the following meeting and signed by the Chairman and acting Secretary to the Board.