VIVO ENERGY MAURITIUS ANNUAL REPORT & FINANCIAL …

VIVO ENERGY MAURITIUS ANNUAL REPORT & FINANCIAL STATEMENTS 2019
“Vivo Energy Mauritius Limited (VEML) had a very strong Health, Safety, Security and Environment (HSSE) performance with a Total Recordable Case Frequency (TRCF) of zero in addition to posting exceptional results in 2019. Eric Gosse Chairman
CONTENTS THE VIVO ENERGY STORY THE VIVO ENERGY MAURITIUS STORY
OVERVIEW
Who we are 02
Review of Operations 08
Lubricants 12
Resources and Relationships 14
FINANCIAL STATEMENTS
Statement of Profit or Loss 46
Statement of Comprehensive Income 46
Statement of Financial Position 47
Statement of Changes in Equity 48
Statement of Cash Flows 49
Notes to the Financial Statements 50
Notice of Meeting of Shareholders
Proxy Form
SUSTAINING GROWTH
BUSINESS NETWORK
THE VIVO ENERGY STORY IS AN AFRICAN STORY – ONE OF ROBUST DEMOGRAPHIC TRENDS DRIVING DYNAMIC AND SUSTAINED GROWTH, IN A CONTINENT ON THE MOVE. OUR BUSINESS BRINGS TOGETHER THE SHELL AND ENGEN BRANDS IN MULTIPLE AFRICAN MARKETS WITH THE FLEXIBILITY OF A VIBRANT, ENTREPRENEURIAL CORPORATE CULTURE IN ONE OF THE WORLD’S FASTEST-GROWING REGIONS. VIVO ENERGY SOURCES, DISTRIBUTES, MARKETS AND SUPPLIES HIGH QUALITY FUELS AND LUBRICANTS TO RETAIL AND COMMERCIAL CUSTOMERS – MAKING THEIR EXPERIENCE WITH VIVO ENERGY MORE CONVENIENT AND REWARDING.
IN MAURITIUS, VIVO ENERGY IS THE COMPANY BEHIND THE SHELL BRAND OPERATING IN RETAIL, COMMERCIAL FUELS, MARINE, AVIATION, LIQUEFIED PETROLEUM GAS AND LUBRICANTS. THE SHELL BRAND HAS BEEN PRESENT IN MAURITIUS SINCE 1905.
VIVO ENERGY MAURITIUS LIMITED (VEML) IS A PUBLIC INTEREST ENTITY AS DEFINED BY LAW. ON 31 DECEMBER 2019 OUR COMPANY EMPLOYED 119 PEOPLE, OPERATED 49 SERVICE STATIONS UNDER THE SHELL BRAND AND HAD ACCESS TO 49,923 METRIC TONNES OF FUEL AND 4,175 METRIC TONNES OF LPG STORAGE CAPACITY.
THE SHELL COMPANY OF EAST AFRICA LIMITED STARTED ITS MARKETING OPERATIONS IN MAURITIUS IN 1905 THROUGH ITS MANAGING AGENTS, BLYTH BROTHERS AND COMPANY LIMITED. AS SUCH, SHELL WAS THE FIRST INTERNATIONAL OIL COMPANY TO SET UP BUSINESS ON THE ISLAND AND ITS CLOSE PARTNERSHIP WITH BLYTH WAS THE CORNERSTONE OF ITS SUCCESSFUL DEVELOPMENT. MOST OF THE CURRENT SERVICE STATIONS, DEPOTS AND CUSTOMER PORTFOLIO WERE ACQUIRED DURING THIS TIME.
IN DECEMBER 2011, VIVO ENERGY ACQUIRED SHELL’S OPERATIONS IN MAURITIUS. SINCE THEN THE COMPANY HAS CONTINUED TO BUILD UP A COMPREHENSIVE BUSINESS NETWORK IN THE ENERGY SCENE, BACKED UP BY STRONG INFRASTRUCTURE INVESTMENTS, GOOD TECHNICAL KNOWHOW AND PROFESSIONALISM.
VIVO ENERGY MAURITIUS LIMITED | ANNUAL REPORT 2019F
OVERVIEW FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OVERVIEW
01VIVO ENERGY MAURITIUS LIMITED | ANNUAL REPORT 2019
COMMERCIAL
RETAIL
LUBRICANTS
Retail is the engine that powers our growth. At the end of 2019 we had 49 service stations in strategic locations across Mauritius. As part of our retail growth ambition, the commitment is to maintain our marketing effort whilst at the same time embark on a network expansion programme through more shops, quick service restaurants (QSR) and car services.
Our Commercial Fuels business is founded on proven customer value propositions that add value to the customers. We not only ensure a reliable supply of high quality fuels to a wide range of customers operating in various sectors but we also support our customers with extensive, trusted services and advice on what is best for them. In essence, we not only supply fuels but partner with our customers to help them reduce their operating expenses and improve their efficiency.
We have a full range of Shell-branded lubricants available for automotive, marine and industrial applications.
WHO WE ARE OUR VALUES
A DYNAMIC BUSINESS A MARKET-LEADING DISTRIBUTOR OF HIGH QUALITY FUELS AND LUBRICANTS, VIVO ENERGY MAURITIUS DISTRIBUTES, MARKETS AND SUPPLIES THESE PRODUCTS TO RETAIL AND COMMERCIAL CUSTOMERS ACROSS THE COUNTRY.
WE ARE A DYNAMIC BUSINESS IN A COMPETITIVE MARKET. WE WORK TO MAKE OUR CUSTOMERS’ LIVES EASIER AND THEIR EXPERIENCE WITH US MORE CONVENIENT, ENJOYABLE AND REWARDING BY PROVIDING QUALITY PRODUCTS AND SERVICES THAT MEET THEIR NEEDS, SUPPORTED BY HIGH STANDARDS OF SAFETY, INNOVATION AND SERVICE IN EVERY AREA WHERE WE OPERATE.
WE ARE JUDGED BY HOW WE ACT AND OUR REPUTATION IS UPHELD BY HOW WE PUT INTO PRACTICE OUR CORE VALUES OF HONESTY, INTEGRITY AND RESPECT FOR PEOPLE.
THESE VALUES UNDERPIN ALL THE WORK WE DO AND ARE THE FOUNDATION OF OUR BUSINESS. WE ALWAYS STRIVE TO UPHOLD THEM; IN WHATEVER SITUATION WE FIND OURSELVES IN. INDEED, THEY ARE CRUCIAL TO OUR SUCCESS AND GROWTH AS A COMPANY, AND TO ACHIEVING OUR VISION.
THESE CORE VALUES ARE ENCAPSULATED IN OUR GENERAL BUSINESS PRINCIPLES AND CODE OF CONDUCT, WHICH OUTLINE CLEAR, CONCRETE AND DETAILED PRINCIPLES AND ETHICAL ACTIONS BY WHICH WE SHOULD CONDUCT OURSELVES, AND DRIVE THE BEHAVIOUR EXPECTED OF EVERY EMPLOYEE, AT ALL TIMES.
WE EMPLOY A DIVERSE GROUP OF PEOPLE AND VALUE THE BENEFITS THIS BRINGS. WE RESPECT THE HUMAN RIGHTS OF OUR EMPLOYEES AND STRIVE TO PROVIDE THEM WITH SAFE WORKING CONDITIONS, PROMOTE THE DEVELOPMENT OF THEIR TALENTS AND GIVE THEM CHANNELS TO REPORT CONCERNS.
WE ALSO FIRMLY BELIEVE IN THE FUNDAMENTAL IMPORTANCE OF TRUST, OPENNESS, TEAMWORK, PROFESSIONALISM AND PRIDE IN WHAT WE DO.
RESPECT FOR PEOPLE
VIVO ENERGY MAURITIUS LIMITED | ANNUAL REPORT 201902 03VIVO ENERGY MAURITIUS LIMITED | ANNUAL REPORT 2019
STRATEGIC REPORT FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OVERVIEW
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CHAIRMAN’S MESSAGE
DELIVERING BUSINESS GROWTH
Dear Valued Shareholders,
On behalf of the Board of Directors, it gives me immense pleasure to present Vivo Energy Mauritius Limited’s (VEML) annual report and financial statements for the year ended 31 December 2019.
VEML had a very strong Health, Safety, Security and Environment (HSSE) performance with a Total Recordable Case Frequency (TRCF) of zero in addition to posting exceptional results in 2019. Overall, the net profit grew by 25% versus 2018, by successfully executing our plan to deliver business growth in a positive yet tough and competitive operating environment. I would like to thank our customers for their longstanding trust and the VEML board, management team and staff of VEML for their hard work, laser-focused execution and discipline that enabled the achievement of these exceptional results.
In order to remain competitive and serve our customers better, VEML deployed a new Enterprise Resource Planning (ERP) system in March 2019. This new ERP system provides an integrated technology platform that supports growth by simplifying business processes whilst providing quicker and deeper insights that enable us to make faster and better decisions on daily basis. These benefits will allow VEML to continuously innovate and strive to exceed the expectations placed upon us.
“Overall, the net profit grew by 25% versus 2018, achieved by successfully executing our plan to deliver business growth in a positive yet tough and competitive operating environment. Eric Gosse ChairmanVEML had a very strong Health, Safety, Security
and Environment (HSSE) performance with a Total Recordable Case Frequency (TRCF) of zero in addition to posting exceptional results in 2019.
COVID-19 presents unprecedented challenges to the world in 2020. VEML’s first priority has, and always will be, the health and safety of its people. The company has quickly adapted to the new operating environment by adopting all sanitary measures including working from home whilst maintaining the best possible level of service to its customers. The company’s facilities have kept on working smoothly and dealt successfully with the significant surge in demand of LPG cylinders at the start of the pandemic. The board and management of VEML have implemented contingency plans that ensure business continuity whilst ensuring the safety of our staff, consumers and business partners. I am confident that the plans in place will ensure VEML continues to provide superior service and products that our stakeholders are accustomed to expect. We also have been involved in supporting COVID-19 community investment activities by providing supplies and the fuel for food kits to reach those most in need through local NGOs.
Over the years, VEML has worked tirelessly to get closer to the vision of becoming Africa’s most respected energy business. In these tough times, more than ever, VEML intends to continuously deliver on this promise.
Thank you for your continued trust in Vivo Energy Mauritius.
ERIC GOSSE CHAIRMAN
2019 was an excellent year for Vivo Energy Mauritius.
MANAGING DIRECTOR’S STATEMENT
EXCEEDING CUSTOMERS EXPECTATIONS
Profits grew by 25% versus 2018 and volumes grew by 8% to offset a 8% reduction in turnover caused by a drop in international oil prices. This excellent growth demonstrates that VEML is firmly in the path of growth and is well positioned for the future.
I would like to personally thank the various teams in the organisation who created the right combination of relevant strategies, right level of investments and execution to achieve this successful outcome and thereby create enormous value to our stakeholders.
BUSINESS PERFORMANCE VEML achieved solid growth in a tough economic climate and amidst fierce competition. In 2019, we deployed a new state of the art ERP system that ensures that VEML is agile and delivers world class service to its customers to remain competitive in the future.
Our balanced portfolio strategy was instrumental in driving the excellent results and offset the negatively impacted sections of the business. For instance:
– The Commercial sector witnessed continued pressure on margins, in a context of reduced productivity in the textile and sugar industries. VEML's excellent customer orientation and service ensured we retained contracts albeit with reduced margins in these industries.
– In the retail segment, we invested in the network expansion and launched the latest generation of fuels, Shell FuelSave with DYNAFLEX technology early in the year which boosted our volumes. Our loyalty programme continued to attract and serve our existing and new clients.
– The aviation sector also grew favourably thanks to new tenders to give solid financial and volume performance.
– Stiff competition in marine sector due to new entrants and lower prices due to supply competitiveness of other local and regional players, negatively impacted our volumes. We also ramped down marine sales in the last quarter of 2019 to prepare for changes in IMO regulations in early 2020. The IMO regulations reduce the
by students in both Mauritius and Rodrigues. In 2019, we held a road safety day in all primary schools, and ran a competition amongst secondary school students.
I am also extremely proud to report that we have actively supported the recovery of the Rodrigues education sector after the cyclones, which hit the island early 2019 through provision of school materials to affected children.
HEALTH, SAFETY, SECURITY AND ENVIRONMENT (HSSE) 2019 was one of the safest recorded years in Vivo Energy Mauritius history. This proud achievement was achieved by our employees, our contractors, customers and suppliers, working together to sustain a high HSSE culture that ensured Zero HSSE incidents.
We have worked about 800,000 man-hours and driven nearly 910,000 kilometres without any accident. This is a great milestone. We made sure to measure, appraise and report our performance through our HSSE KPIs: Process Safety, Transport Safety, Security and Contractor Safety. We trained our staff, retail staff and contractors and identified improved ways of minimizing operational risk, both in our depots and at our customer sites. As a measure, the number of potential incidents (PI) reported by our stakeholders increased by 15%, indicating an increased awareness on safety and averting incidents.
Our Safety Day theme for 2019 Safety – Why it matters to me triggered various discussions on the importance of safety and improved our performance in the year.
PEOPLE We consider people amongst the most important assets of the company. As a result, VEML invested heavily in employee training in 2019 in all the areas of the business. In line with common businesses practices across the globe, we focussed attracting and retaining the right talent. A ‘can-do’ attitude is a key attribute for the gifted and ambitious people we require to work at Vivo Energy Mauritius.
OUTLOOK With the continuous investments in its assets and people, Vivo Energy Mauritius fuels its engines for future growth through customer focus, underpinned by operational effectiveness delivered through the new ERP system.
I would like to seize this opportunity to thank the Board of Directors and Vivo Energy Mauritius staff for their hard work and customer focus.
MATTHIAS DE LARMINAT MANAGING DIRECTOR
sulphur content in Marine fuel oil to 0.5% to reduce marine pollution. In the end, our excellent customer service, close relationship with customers and excellent supply chain execution were key differentiators that successfully delivered the outstanding result in this tough environment.
– The LPG segment experienced a good year as we responded effectively to growth in demand. Our excellent customer service played a catalytic effect to the growth in LPG.
CUSTOMERS Meeting customer expectations and ensuring they are satisfied remained top of our agenda in 2019.
We invested heavily in the training of our staff, to improve customer service. We also invested in network expansion through the opening of two new service stations located on the motorway in 2019. We aim to expand the network further by opening more service stations in 2020, together with improving offers on our existing network. Our service stations are strategically located across the country and help us serve our customers. Our ambition is to create one- stop shops that make the lives of our customers easier through convenience retail.
Finally, to improve operational efficiency, VEML invested heavily in the fuel depots and transportation tools to ensure compliance to the highest health and security standards. To this end, I am extremely proud to announce that we were among the first companies in Mauritius to be awarded the ISO 45001:2018 certification in 2019.
COMMUNITY INVESTMENT Our investment in community is focussed on three key areas, namely road safety, education and environment.
I am extremely proud of our long lasting investment in our Cite Zen programme that sensitizes young people on the importance of road safety and the consequences of road accidents. VEML has ran the programme in collaboration with the Ministry of Education for the past 10 years and is well recognised
REVIEW OF OPERATIONS
RETAIL FRESH OFFERS FOR OUR CUSTOMERS RETAIL IS THE ENGINE THAT POWERS OUR GROWTH. AT THE END OF 2019 WE HAD 49 SERVICE STATIONS IN STRATEGIC LOCATIONS ACROSS MAURITIUS.
RETAIL FUELS
Sale of petrol and diesel fuels at Shell-branded service stations.
2019 saw the opening of two new service stations on the motorway, one in Highlands and the other in Gros Bois, which contributed to growing our well distributed network under the Shell brand in the country. Our SmartClub members continued to enjoy exclusive gifts as reward for their loyalty to the Shell brand. In line with modern vehicle engine innovations and the needs of our customers, we launched the new formulation of Shell FuelSave in Mauritius at the beginning of 2019 which is now available on all our retail sites. The new Shell FuelSave includes DYNAFLEX Technology that helps keep engines clean and protected for efficient running. As part of our marketing campaign ‘Fuel Your Summer’, we rewarded as many as 5,000 customers with fuel vouchers worth Rs 100 to Rs 50,000 with one customer winning the star prize, the new BMW X1.
2020 looks promising with new projects and fresh offers for our customers seeking greater convenience on our retail network.
NON-FUEL RETAIL
Convenience retail shops, quick service restaurants (QSR), and other services including lubricant bays and car washes.
In 2019, the focus was to enhance our shop offerings and drive traffic to our stores, QSR, car wash and car services via brand awareness and promotional activities, thereby realizing a 3% growth in turnover.
As part of our retail growth ambition, the commitment is to maintain our marketing effort whilst at the same time embark on a network expansion programme through more shops, QSR and car services. With these initiatives, we are on track to become the most prominent and promising network in terms of non-fuel Retail.
COMMERCIAL ADDING VALUE FOR OUR CUSTOMERS OUR COMMERCIAL FUELS BUSINESS IS FOUNDED ON PROVEN CUSTOMER VALUE PROPOSITIONS THAT ADD VALUE TO THE CUSTOMERS. WE NOT ONLY ENSURE A RELIABLE SUPPLY OF HIGH QUALITY FUELS TO A WIDE RANGE OF CUSTOMERS OPERATING IN VARIOUS SECTORS BUT WE ALSO SUPPORT OUR CUSTOMERS WITH EXTENSIVE, TRUSTED SERVICES AND ADVICE ON WHAT IS BEST FOR THEM. IN ESSENCE, WE NOT ONLY SUPPLY FUELS BUT PARTNER WITH OUR CUSTOMERS TO HELP THEM REDUCE THEIR OPERATING EXPENSES AND IMPROVE THEIR EFFICIENCY.
We remain the preferred choice for quality fuels, lubricants and greases to industrial and transport operators and a trusted adviser on technical matters, with a clear focus on adding value to our customers’ activities.
In spite of the very competitive context and ever changing demands from the market, we successfully secured new contracts thanks to our willingness and ability to adapt to these market conditions. We kept servicing customers across all economic sectors such as transport, construction, textile, agriculture, manufacturing, power, hotels and restaurants.
We maintained our investment programme to upgrade our facilities at customer premises to ensure that we keep operating following our high HSSE standards.
The market returned to growth in 2019 thanks to recovery in the construction sector. However, as pressure on margins continued, we remained close to our customers in promoting our overall value proposition.
AVIATION
We supply products and related services to the aviation industry.
The industry remained price sensitive and we managed to increase our customer base and grow compared to 2018 performance levels. Vivo Energy Mauritius continues to supply the main local and other international airlines through our professional team on the ground, delivering high quality fuels to our customers together with world class Health, Safety, Security and Environment (HSSE) standards which are so vital for the industry. In fact, due to our technical and HSSE knowledge, Vivo Energy Mauritius remains a partner of choice for all players in the Mauritian aviation sector.
MARINE
We provide Marine Fuel Oil, Marine Gasoil and Shell Lubricants.
2019 was a good year for the Marine business. We leveraged on our prompt service and strong logistics to meet the stringent requirements of our long term customers. Despite steep fluctuations in international petroleum prices again in 2019, we consolidated the business by maintaining rigorous management of supply and stock, and being close to our customers.
With the IMO2020 low sulphur regulation effective on the 1st of January 2020, the team worked diligently to eliminate all risks of product contamination. As such, we have undertaken full cleaning of our shore storage tanks which thereon have been certified for cleanliness by an independent surveyor prior to receipt of our first Low Sulphur Fuel Oil cargo. Likewise our delivery barge has undergone the same stringent cleaning and control to ensure that fuels delivered to bunkering vessels conform to the new sulphur limit.
In order to sustain the local economy, Vivo Energy Mauritius will remain agile to meet the changing requirements of Marine customers, and grow its bunkering activities in Port Louis..
LIQUEFIED PETROLEUM GAS
We sell Liquefied Petroleum Gas (LPG) in various cylinder sizes and bulk for domestic, commercial and industrial applications.
The LPG business continued to grow in 2019 by being very close to our customers, improving our ability to meet the needs of various customer segments. The network of point of sales for the domestic market are supplied by our distributor, Gas Transport Limited. Together, we secured supply for new customers in Mauritius and outer islands. Significant investment has been made in our park of cylinders and distribution trucks to further improve our service.
LPG, being a safer, cleaner and more efficient source of energy, is not only preferred by households but also among commercial customers in various sectors such as textiles, hotels, livestock breeding, catering, restaurants and other industries.
Our LPG is stored, distributed and delivered under our widely recognised and trusted brand: Shell Gas. Our composite cylinders are becoming more popular among the population as they are light-weight, which makes them easy to transport and store, and translucent which makes the level of LPG inside the cylinder visible.
We keep striving to deliver better, safer and more reliable ways to meet the energy needs of customers, while ensuring a continuous and regular supply of LPG. In addition, the company provides a home delivery service in selected regions for 12 kg commercial and 50 kg cylinders.
Shell Gas is sold in a variety of cylinder sizes for various applications: 5 kg and 12 kg for domestic purposes, 50 kg for both domestic and commercial use, 12 kg for commercial use and industrial applications and 12 kg for forklift applications. Our product range is backed by our expertise, dedicated account managers and rigorous safety standards.
Our lubricants results for 2019 were positive. We have grown our distribution network for Shell Lubricants and for Shell Car Care which is now also present in supermarkets. We have expanded the number of Shell lubricants distributors in the country and with the opening of our two new Shell stations, we have increased our lubricants point of sales and are even closer to our customers. In 2020, we will continue to innovate and introduce products for the latest technology vehicles and equipment to meet our customers’ evolving demands.
The independent survey carried out by Kline and Company’s Global Lubricants Industry has recognised Shell lubricants as the global market leader for the thirteenth consecutive year. Shell lubricants are far ahead of its competitors, delivering unbeatable quality lubricants on the market. With new technologies evolving every year Shell lubricants continually adapts its portfolio of products to be the first marketer to meet the emerging needs. Shell lubricants are approved by all Original Equipment Manufacturers worldwide and vehicle manufacturers such as BMW, Ferrari, Maserati and Hyundai recommend exclusively Shell lubricants.
New technology lubricants are available in Mauritius that exceeds by far most OEM specifications and customers can ensure that they are buying a reliable product, thus protecting their investment.
By using Shell lubricants, customers in various sectors optimise the performance of their equipment and their running cost.
CUSTOMER SERVICE CENTRE
Our Customer Service is a one-stop shop for our customers.
Through our call centre, we provide services, such as order taking from retail and commercial customers for fuels and lubricants, complaints handling, invoicing and responding to queries on customer accounts. Our services also include debtor follow up, maintenance calls management, lubricants and LPG delivery scheduling and telesales and telemarketing support. Calls are handled by our trained agents who act as business and service focal points for HSSE, Commercial, Lubricants, LPG, Aviation and Marine. Besides being the only petroleum company operating such comprehensive customer service in the country, we are continuously revisiting our processes and striving to maintain high performance through focus and emphasis on people development and staff motivation.
Our expert agents can be reached on 206 1111 during weekdays from 07h00 to 18h00 and from 07h00 to 12h00 on Saturday.
PRODUCT SUPPLIES AND DISTRIBUTION
We own and operate two depots, namely Roche Bois and Causeway and operate two other depots on behalf of the oil industry. One of these is at Fort William for the storage of fuel oil on behalf of the Central Electricity Board and the second one (ESCOL) is a joint venture LPG storage, in which we own 50% equity. The company holds 23.5% of the shares of Mer Rouge Oil Storage Terminal Company Limited (MOST), a joint venture set up with the oil companies and State Trading Corporation for storage of 25,000 metric tonnes of motor gasoline and diesel in Mer Rouge.
Bulk delivery vehicles distribute fuels and lubricants to retail outlets, industrial customers and the airport. Bulk LPG is delivered through specialised vehicles. Deliveries to marine customers are conducted either through bunkering barge or through pipelines at quays.
LUBRICANTS A DIFFERENTIATED CUSTOMER PROPOSITION WE HAVE A FULL RANGE OF SHELL-BRANDED LUBRICANTS AVAILABLE FOR AUTOMOTIVE, MARINE AND INDUSTRIAL APPLICATIONS.
DEVELOPING OUR PEOPLE AT THE END OF 2019, VEML EMPLOYED 119 PEOPLE. WE DO ALL WE CAN TO MAKE SURE THEY ARE FULFILLED AND APPROPRIATELY REWARDED.
RESOURCES AND RELATIONSHIPS
HOW WE’RE CREATING THE RIGHT CULTURE Our values of integrity, honesty and respect for people are essential to achieving our vision of becoming Africa’s most respected energy company. They sit at the heart of our operating culture of ‘Focus, Simplify and Perform’. Since 2011, we’ve transformed our culture from a process-driven organisation to a decentralised one where individuals are encouraged to make decisions and are rewarded appropriately.
Our people are regularly kept informed about our business through their managers, employee town hall meetings, regular online newsletters, and our Company intranet.
Reputation is our most important asset and we ensure that this is continuously maintained and built on. We do this by acting with the highest standards of corporate behaviour towards our employees, our customers, those with whom we do business and our shareholders. Our Code of Conduct and General Business Principles (both available on our website) include information on our approach to respecting human rights and fighting corrupt practices. These policies underpin all the work that we do and are the foundation of our business. One example of this is the series of Ethics & Compliance training we run for all employees. And we are proud to be one of the first ten companies in the world (and the first operating exclusively in Africa) to achieve the ISO 37001 standard for anti-bribery management systems.
HOW WE DEVELOP AND RETAIN OUR PEOPLE Training also plays a major role in making sure we have the right people in the right roles at the right time. It ensures we’re prepared not only for the immediate future but also for the years that lie ahead. Capability and skills development is always a top priority and 2019 saw us invest a substantial amount in learning and development.
In common with businesses across the globe, attracting and retaining people with the right skills is one of our greatest challenges. Our ‘can-do’ attitude is a major attraction for the talented, ambitious people we require.
HOW WE REWARD OUR TEAMS Our entrepreneurial culture means remuneration is closely tied to achievement. Variable pay, in the form of annual discretionary bonuses linked to individual and business performance, is a key element of our culture. There are also bespoke incentive schemes for front line sales staff in the Retail, Commercial and Lubricants markets. We also provide a wide range of benefits for many of our people including healthcare, pensions and life insurance.
LOOKING AFTER OUR PEOPLE SAFETY IS AN ABSOLUTE PRIORITY. WE AIM TO ACHIEVE ‘GOAL ZERO’, WHICH MEANS NO HARM TO OUR PEOPLE, CONTRACTORS OR THE ENVIRONMENT.
WHAT WE’RE DOING TO KEEP OUR PEOPLE SAFE Our HSSE performance is benchmarked against the downstream activities of our industry peers, and we consistently score ahead of companies operating both within and outside Africa. A key challenge is to integrate HSSE into every area of our culture and operations, with our main focus areas being:
– Road safety, including providing driver training and rewarding safe driving, as well as incorporating extra safety equipment into vehicles.
– Contractor safety, which extends from requiring contractors to comply with our HSSE policies through to driver and vehicle initiatives.
– Process safety, such as ensuring that safe working practices are followed at all depots, blending plants and other sites where we operate potentially hazardous equipment.
– Security, including traveller and country security monitoring and incorporating security initiatives into the design and operation of our assets.
MOVING TO A PROACTIVE SAFETY CULTURE We’ve transformed our approach to HSSE since we were established in 2011. For example, we’ve focused on the role of potential incident reporting to anticipate events before they happen. This has not only led to an upsurge in the number of potential incidents reported, but also a step change in the way we follow them up in order to prevent incidents occurring in the first place.
Our total recordable occupational illness frequency for 2019 was zero and we recorded zero fatal incidents. Our 2019 performance remained strong and was better than our 2018 performance.
We are committed to providing equal opportunities for all our employees. No employees became disabled during 2019, however, our policy is to make all efforts to retain, re-train and make adjustments for disabled colleagues.
2017 2018 2019
Total Recordable Occupational
Exposure Hours (‘000) 763 648 796
Lost Time Injury zero two zero
Spills one zero zero
BUILDING RELATIONSHIPS WITH COMMUNITIES WE AIM TO BE A POSITIVE FORCE IN THE COMMUNITIES CLOSE TO OUR OPERATIONS. THESE ARE THE TOWNS AND VILLAGES WHERE OUR PEOPLE LIVE AND WE WANT TO CREATE LASTING SOCIAL AND ECONOMIC BENEFITS FOR THESE COMMUNITIES.
RESOURCES AND RELATIONSHIPS CONTINUED
During 2019, we invested to support our three focus areas of road safety, education and the environment. In road safety, we launched and rolled out several projects to encourage greater safety. Mauritius experiences a high number of road traffic accidents – and as a company that relies on trucks and tankers for supply and distribution, we are committed to playing our part to address this.
The company held the Vivo Energy Mauritius Road Safety Day 2019 for the seventh consecutive year and which saw the participation of over 100,000 school children in primary schools in Mauritius and Rodrigues. We ran a road safety competition entitled ‘12 messages qui font date’ targeting secondary school students. The 12 best entries were used in the company’s 2020 calendar helping in sensitising our stakeholders on road safety. We supported school children in Rodrigues by providing school materials to children in vulnerable areas.
VEML also financed an organic garden at Northlands Pre-Primary and Primary School in Triolet, and a road traffic playground at Rampersad Goburdhun Government School in Belle Vue Maurel.
We encourage our employees to contribute in our community activities. To mark World Environment Day in 2019, our employees participated in a TrashTag Challenge, with the contribution of the local community, and cleaned Mer Rouge Bay in Roche Bois. Our efforts towards contributing to a clean environment remained high on our agenda.
GOVERNANCE
CONTENTS
GOVERNANCE
GOVERNANCE FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT OVERVIEW
PRINCIPAL ACTIVITIES The Company's principal activity is the marketing and distribution of petroleum products. It has 2 joint ventures, namely Energy Storage Company Limited (ESCOL) and Mer Rouge Oil Storage Terminal Company Limited (MOST). ESCOL is involved in the provision of LPG terminal facilities. MOST provides
For the year ended 31 December 2019, the Company made a profit of Rs 13.23 (2018 - Rs 10.57) per share and declared and paid an interim dividend of Rs 9.40 (2018 – Rs 6.50) per share during the year.
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS Company law requires the directors to prepare financial statements for each financial year which present fairly the financial position, financial performance and cash flows of the Company. In preparing those financial statements, the directors are required to:
– select suitable accounting policies and apply them consistently;
– make judgements and estimates that are reasonable and prudent;
– state whether International Financial Reporting Standards have been followed, disclose and explain any material departures in the financial statements; and
– prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business in the foreseeable future.
The directors confirm that they have complied with the above requirements in preparing the financial statements.
The directors are responsible for:
– Keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and which enable the Directors to ensure that the financial statements comply with the Mauritian Companies Act 2001; and
Dividend per share 2019 2018 Rs Rs
Declared on:
13.47 8.11
Statutory audit 1,730 1,730
Volume certification 75 60
strategic storage facilities to the State Trading Corporation (STC).
RESULTS AND DIVIDENDS The Company’s profit for the year is Rs 387,991,000 (2018 - Rs 309,820,000)
The financial statements of the Company for the year ended 31 December 2019 are set out
– Safeguarding the assets of the Company through implementation of reasonable steps in the prevention and detection of fraud and other irregularities.
DIRECTORS The directors of the Company since 01 January 2019 and at the date of this report are:
Mr David Mureithi (Resigned 8th April 2019)
Mr Eric Gosse (Appointed on 11th April 2019)
Mr Pawan K Juwaheer
Mr Joseph Getuno (Appointed on 28th June 2019)
Mr Bruno Allan Madanamoothoo (Resigned 29th March 2019)
Mr Patrick Crighton (Appointed on 29th March 2019 and resigned 17th July 2019)
Mr Roger K F Leung Shin Cheung
Mr Timothy Taylor
CONTRACTS OF SIGNIFICANCE The Company entered into the following contracts with related parties:
(a) With effect from 01 December 2011, a licencing agreement for the branding of retail automotive fuel sites and other assets with Shell Brands International AG; and
(b) With effect from 01 January 2014, a contract for the provision of services with Vivo Energy Africa Services Ltd.
on pages 46 to 82. The auditor’s report on these financial statements is on pages 43 to 45.
The Company declared and paid the following dividends in 2019 and 2018:
MAJOR SHAREHOLDER At 31 December 2019, Vivo Energy Mauritius Holdings BV holds directly 75% of the ordinary share capital of the Company. No other person holds 5% or more of the ordinary share capital of the Company.
SEGMENTAL ANALYSIS A business segment analysis of sales and results is given in Note 5 to the financial statements.
SERVICE CONTRACTS Messrs Pawan K Juwaheer has a service contract without an expiry date.
Service contracts of other directors have a minimum of 3 months’ termination notice period by either party.
DIRECTORS’ INTERESTS The directors have no interests in the ordinary share capital of the Company, either directly or indirectly.
THREE YEAR SUMMARY A three year financial summary is set out in Note 28 to the financial statements.
DONATIONS During the year, the Company made donations of Rs 2,185 (2018 - Rs 1,900)
AUDITOR The fees charged by the auditor, PricewaterhouseCoopers, for audit and other services were:
PricewaterhouseCoopers will retire as auditors subsequent to the 2019 audit in line with the requirements of the The Financial Reporting Act 2004 on mandatory auditors rotation. An external audit tender exercise has been conducted for the statutory audit for the year ending 31 December 2020 and the incoming auditors will be presented at the next Annual General Meeting. PricewaterhouseCoopers has been the auditor of Vivo Energy Mauritius Limited since 1989.
Approved by the Board of Directors on 20 March 2020 and signed on its behalf by:
} DIRECTORS
UNDER SECTION 166(D) OF THE COMPANIES ACT 2001
We certify that we have been appointed by Vivo Energy Mauritius Limited to act as the Company Secretary since 08 June 1990.
We certify that we have filed with the Registrar of Companies all such returns as are required of the Company under the Companies Act 2001.
Executive Services Limited
Christian Angseesing ACIS
20 March 2020
SECRETARY’S REPORT TO THE MEMBERS OF VIVO ENERGY MAURITIUS LIMITED
PRINCIPLE 1: GOVERNANCE STRUCTURE PRINCIPLE 1: GOVERNANCE STRUCTURE CONTINUED
STATEMENT OF MAIN ACCOUNTABILITIES The Directors have approved the following Statement of Accountabilities:
– The Board assumes the responsibility for leading and controlling the organisation and meeting all legal and regulatory requirements. Directors are aware of their legal duties.
– The Board is accountable for the performance and affairs of the Company and for achieving sustainable growth.
– The Board is responsible for ensuring that the Company adheres to high standards of ethical behavior and acts in the best interest of shareholders.
The Board has the responsibility of reviewing and approving the results announcements of the Company.
Additionally, the Board Charter and the Position Statements, which have been approved by the Board, provides for a clear definition of the roles and responsibilities of the Chairperson, the Directors and the Company Secretary.
MAIN ACCOUNTABILITIES
Chairperson Provides overall leadership to the Board;
Ensures that the Board is effective in its tasks of setting and implementing the company’s direction and strategy;
Presides and conducts meetings effectively ;
Provides support and supervision to the Managing Director;
Ensures that directors receive accurate, timely and clear information;
Ensures that development needs of the directors are identified and that appropriate training is provided to continuously update the skills and knowledge of the directors; and
Maintains sound relations with shareholders.
Directors Contribute to the development of the strategy;
Analyse and monitor performance of Management against agreed objectives;
Ensure that financial information released to the market and shareholder is accurate;
Ensure that the Company has adequate and proper financial controls and systems of risk management;
Actively participate in Board decision-making and constructively challenge, if necessary, proposals presented by Management;
Provide specialist knowledge and experience to the Board; and
Remain permanently bound by fiduciary duties of care and skill.
Managing Director Manages the day-to-day operations of the Company;
Leads the elaboration and execution of the long term strategy of the Company;
Maintains good relationships with organizational stakeholders;
Identifies and monitors material risks that may affect the business;
Advises and informs members of the Board on significant matters to facilitate decision-making;
Monitors the operational and financial performance of the Company; and
Builds the team by empowering, monitoring & managing performance of employees in order to maximise existing talents and develop new capabilities.
Company Secretary Ensures compliance with all relevant statutory and regulatory requirements;
Provides the Board as a whole and directors individually with guidance as to their roles and responsibilities;
Assists the Chairperson in governance processes such as Board and Committee evaluation;
Develops and circulates agendas for meetings and drafts minutes and ensures follow ups; and
Ensures that the shareholder’s interests are taken care of and act as primary point of contact.
HOLDING STRUCTURE
VEML’S ORGANISATIONAL CHART AND STATEMENT OF ACCOUNTABILITIES
COMPANY INFORMATION VIVO ENERGY MAURITIUS LIMITED (VEML) is a public company incorporated in the Republic of Mauritius on 19 January 1989 and is a public interest entity as defined by law. Disclosures included in this report are in line with the prevailing Code of Corporate Governance for Mauritius (The National Code of Corporate Governance for Mauritius (2016).
Its registered office is situated at Cemetery Road, ROCHE BOIS.
COMPANY’S PHILOSOPHY The Company is committed to the conduct of business practices that display characteristics of good corporate governance, namely business integrity, transparency, independence, accountability, fairness and professionalism in all its activities and ensures that its organisation and operations are managed ethically and responsibly to enhance business value for its shareholders and other stakeholders.
CORPORATE GOVERNANCE STATEMENT During this financial year ended 31st December 2019, the Board of VIVO ENERGY MAURITIUS LIMITED has applied the eight principles of the new Code of Corporate Governance For Mauritius (2016). The directors firmly believe in and support high standards of corporate governance, which are critical to the Company’s business integrity.
The Board Charter, the Organisation’s Code of Ethics, job descriptions of key senior governance positions as well as the organisation chart have been approved by the Board of Directors. They provide for a clear definition of roles and responsibilities of the Chairperson, Executive Director, Independent-Non- Executive Director, the Company Secretary as well as Senior Management.
CORPORATE GOVERNANCE REPORT CORPORATE GOVERNANCE REPORT CONTINUED
VIVO ENERGY PLC (UNITED KINGDOM)
SHAREHOLDERS OF VEML
Marketing & Communications Manager
ELECT THE BOARD
100%
100%
75%
100%
VIVO ENERGY MAURITIUS LIMITED (MAURITIUS)
VIVO ENERGY MAURITIUS HOLDINGS B.V
(NETHERLANDS)
PRINCIPLE 2: THE STRUCTURE OF THE BOARD AND ITS COMMITTEES
STRUCTURE OF THE BOARD The Board structure of VIVO ENERGY MAURITIUS LIMITED “VEML” is a unitary Board. The directors of VEML share responsibility for directing the Company and promoting its affairs collectively and not individually when acting on behalf of the Company.
COMPOSITION OF THE BOARD The Board comprises of two executive directors, two non-executive directors and two independent non-executive directors. The directors come from diverse business backgrounds and possess the necessary knowledge, skills, objectivity, integrity, experience and commitment to make sound judgements on various key issues relevant to the business of the Company, independent of management.
To determine its current size and composition, the Board has taken into account:
(a) The size of its operations and its sector of activity;
(b) The various qualifications and experience of its members; and
(c) The recommendations of the Code of Corporate Governance for Mauritius.
The Board is satisfied that it is currently of a size and level of diversity that is commensurate with the operations and scale of VIVO ENERGY MAURITIUS LIMITED.
Diversity: Currently the board contains 4 nationalities notably Mauritian, British, French and Kenyan directors. To further improve Board gender diversity, the Board has commenced the recruitment of female directors in 2020. The median age of the board reduced by 7 years in 2019 to 56 years (2018 - 63 years).
BOARD COMMITTEES The Board has two standing committees made up of Executive, Non-Executive and Independent Non-Executive Directors to assist in the discharge of its duties. The committees, which are set out below, meet regularly under the board charter set by the board.
The Board delegates certain roles and responsibilities to its principal Board committees. Whilst the Board retains overall responsibility, a sub-committee structure allows these committees to probe the subject matter more deeply and gain a greater understanding of the detail, and then report back to the Board on matters discussed, decision taken, and where appropriate make recommendations to the Board on matters requiring its approval.
The Board is satisfied that the committees are appropriately, structured and competent to deal with both the Company’s existing and emerging issues, and that they have effectively discharged their responsibilities during the year under review.
The committees, which are set out below, meet regularly under terms of reference set by the Board. The chairman of each committee has the responsibility to report to the Board regarding all decisions and matters arising at sub-committee meetings. The committees may from time to time seek independent professional advice which is then approved by the Board.
AUDIT & RISK COMMITTEE (ARC)
Roles and responsibilities of the ARC The main duty of the Committee is to:
– Ensure the integrity of accounting and financial reporting and to review internal control systems and procedures in order to assist the Board of Directors in carrying out its responsibilities;
– Monitor the role and scope of work of internal and external auditors and ensures
ROLE AND FUNCTION OF THE BOARD The Board is responsible for the stewardship of the Company, overseeing its conduct and affairs to create sustainable value for the benefit of its stakeholders. It acknowledges its responsibility for leading and controlling the Company, ensuring that strategic direction and management structures are in place to meet regulatory requirements. In 2019, the board discharged its functions by:
– Protecting and enhancing shareholders’ value by identifying and monitoring key risks areas and key performance indicators;
– Exercising leadership, enterprise, intellectual honesty, integrity and judgement in directing the Company to achieve sustainable prosperity; and
– Ensuring timely communication with shareholders and other stakeholders.
RESIDENCY Messrs Pawan K Juwaheer, Roger K F Leung Shin Cheung, Mathias De Larminat, Timothy Taylor, and Joseph Getuno are resident in Mauritius. Mr Eric Gosse is a non-resident.
ROLE AND FUNCTIONS OF CHAIRMAN AND MANAGING DIRECTOR The role of the Chairman and the Managing Director are held by two distinct individuals.
The Chairman’s discharged his responsibilities by presiding over the Board meetings and AGM and ensured that they ran smoothly.
The Managing Director, with the assistance of the executive management, devised strategies that supported the realisation of the Company’s short and long term strategy towards the achievement of the Company’s financial and operating objectives. He also oversaw the day- to-day business affairs of the Company.
The Board reviews and assesses the adequacy of its charter every (2) years
The minutes of each Board Committee meeting are submitted for consideration and approval at the following meeting and are accessible to all members of the Board of Directors.
CORPORATE GOVERNANCE COMMITTEE
Roles and Responsibilities of the Corporate Governance Committee The main duties and responsibilities of the Corporate Governance Committee encompass the Remuneration Committee and the Nomination Committee and include namely:
– Determine, agree and develop the Company’s general policy on corporate governance in accordance with the applicable Code of Corporate Governance For Mauritius;
– Prepare the corporate governance report to be published in the Company’s Annual Report;
– Ensure that disclosures are made in the Annual Report in compliance with the disclosure in the Code of Corporate Governance For Mauritius;
– Determine, agree and develop the company’s general policy on executive and senior management remuneration; and
compliance with legal and regulatory provisions; and
– Conduct or authorise investigations into any matter within its scope of responsibilities and to engage any firm of professionals it deems fit to provide independent expert advice.
The Committee has full access to all management personnel and can call upon any member of management and staff or any member of the Board to attend its meetings.
ROLE OF THE NON-EXECUTIVE & INDEPENDENT NON-EXECUTIVE DIRECTOR The non-executive and the independent non-executive directors played a vital role independent oversight of the executive management in the year through participation in Board meetings and in the various committees.
ROLE AND FUNCTION OF THE COMPANY SECRETARY The company secretary appraised the board on corporate governance requirements and ensured the board complied with statutory requirements as it discharged its duties whilst ensuring the smooth running of all meetings of the board.
BOARD MEETINGS The Board met on a regular basis and deliberated on key matters which included:
a. Strategies to be adopted for each line of business to ensure the business realised its objectives in the short and long term;
b. Deliberation of performance of the company during the period including the approval of the Annual Report and interim financial statements;
c. Approval of interim dividends and recommendation of final dividends;
d. Approval of material contracts and nomination of candidates for Board membership;
e. Review of risk profiles of the company as well as proposed mitigation strategies; and
f. Remuneration policy.
ATTENDANCE AT BOARD MEETINGS IN 2019 In 2019, the attendance of the Directors was as follows:
– Determine specific remuneration packages for executive directors of the company, including but not limited to basic salary, benefits in kind, any annual bonuses, performance-based incentives, share incentives, pensions and other benefits.
Membership of the Corporate Governance Committee Mr Timothy Taylor (Chairman) - Independent Non-Executive Director
Mr Roger Leung - Independent Non- Executive Director
Mr Pawan K Juwaheer – Non-Executive Director (resigned on 01 April 2019)
Mr Matthias de Larminat – Executive Director and Managing director
Agenda of meetings held in the year The corporate governance committee sat in February 2019 and deliberated on the following which includes matters reserved for the Remuneration and Nomination Committee:
– The Company’s general policy on corporate governance with respect to the Code of Corporate Governance For Mauritius;
– Preparation of the corporate governance report to be published in the Company’s Annual Report; and
– The company’s general policy on Directors, Executive and Senior management remuneration.
Membership of Audit and Risk Committee The members of the ARC are:
Mr Roger Leung (Chairman) - Independent and Non-Executive Director
Mr Timothy Taylor - Independent and Non- Executive Director
The Board of Directors is of the view that the members of the Committee have sufficient financial management knowledge and experience to discharge their responsibilities properly.
Attendance at the Corporate Governance Committee in 2019
CORPORATE GOVERNANCE REPORT CONTINUED
22 Mar 2019 14 May 2019 15 Aug 2019 14 Nov 2019
X - - -
X X
X X
X X
Mr Eric Gosse
Mr Joseph Getuno
* Eric Gosse has been appointed as Chairman and Director of Vivo Energy Mauritius Limited on 11 April 2019 in replacement of David Mureithi, who resigned as Chairman and Director of the Company on 08 April 2019.
PRINCIPLE 2: THE STRUCTURE OF THE BOARD AND ITS COMMITTEES CONTINUED
AUDIT & RISK COMMITTEE (ARC) CONTINUED
Attendance at Risk and Audit Committee in 2019
19 Mar 2019 07 May 2019 07 Aug 2019 06 Nov 2019
X X X X
X X X X
Mr Timothy Taylor
PRINCIPLE 2: THE STRUCTURE OF THE BOARD AND ITS COMMITTEES CONTINUED
Agenda of ARC meetings in 2019 In 2019, the audit and risk committee assisted the board to achieve its oversight responsibilities through:
– Providing oversight over the integrity of the financial reporting process including the publishing of financial statements;
– Reviewing the effectiveness and performance of the Company’s internal control and risk management systems;
– Evaluating the work of the internal audit function and that of the external auditors;
– Reviewing the Company’s compliance with legal and regulatory requirements affecting
financial reporting and, if applicable, its code of business conduct; and
– Reviewing audit fees as well as fees for audit related services by the external auditors to ensure their independence.
The ARC committee maintained effective working relationships with the board of directors, management, and the external and internal auditors.
BOARD INDUCTION AND PROFESSIONAL DEVELOPMENT All new Directors received a full, formal and tailored induction on joining the Board, including meetings with senior management and visits to the company’s operational locations. The Board recognises the importance of ongoing professional development and training to sustain an effective, well informed and functional Board. To achieve this, the Board will institute a training plan for the existing directors in 2020.
SUCCESSION PLANNING The Corporate Governance Committee deliberated on Board succession planning and developed a set of criteria for the selection of prospective directors and key employees to support VEML strategic objectives.
DIRECTORS’ PROFILES
PRINCIPLE 3: DIRECTOR APPOINTMENT PROCEDURES
ERIC GOSSE CHAIRMAN OF THE BOARD AND NON- EXECUTIVE DIRECTOR (APPOINTED AS DIRECTOR ON 11 APRIL 2019)
(Aged 55)
Eric Gosse is the Executive Vice President, Business Development & Support of Vivo Energy Group, a position he has held since 15 January 2019. Mr. Gosse is responsible for business development and projects, supply and sourcing (fuels), distribution, power and solar, technical audit, technical and engineering and HSSE as well as supervising the Vivo Energy Group in the Indian Ocean islands. Mr. Gosse joined the Vivo Energy Group from Total where he held various senior positions over the course of more than 25 years. He brings a wealth of commercial and industry experience to the Vivo Energy Group.
DAVID MUREITHI (RESIGNED AS DIRECTOR AND CHAIRMAN OF THE BOARD ON 08 APRIL 2019
(Aged 56)
David Mureithi was the Executive Vice President for Retail, Marketing and East & Southern Africa of Vivo Energy Group, a position he has held since January 2017 until April 2019. Mr. Mureithi joined Vivo Energy Group in May 2013 and previously held the position of Executive Vice President for Supply and Marketing. Prior to joining the Vivo Energy Group, Mr. Mureithi held various positions at Unilever, including Supply Chain Director for East Africa, Managing Director for Kenya, Regional Head for East and Southern Africa and Regional Head for West Africa. Mr. Mureithi is based in Nairobi, Kenya and has qualified with a BSc in electrical engineering from the University of Nairobi and an MBA in Marketing from the University of Leicester.
He was appointed Board member on 12 May 2017. He resigned as director on 08 April 2019.
MATTHIAS DE LARMINAT EXECUTIVE DIRECTOR AND MANAGING DIRECTOR
(Aged 42)
Matthias de Larminat was appointed Managing Director of Vivo Energy Mauritius Limited on 01 April 2019 and as Director of the company on 22 March 2019. Mr de Larminat joined Vivo Energy Mauritius Limited from CMA CGM, a shipping company. Over the last four years, Mr de Larminat has held a number of roles at CMA CGM, initially as the General Manager in Gabon, then as Deputy General Manager for Vietnam and Cambodia, Head of Real Estate and most recently as Middle East Regional Director. Prior to joining CMA CGM, Mr de Larminat spent 13 years in the French Army. Mr de Larminat has an MBA from the ESSEC Business School, a post-graduate staff officer diploma from the French War College, and a Master’s degree in Defence Economics from Saint Cyr Military Academy. Mr de Larminat is also a director of Mer Rouge Oil Storage Terminal (MOST), ESCOL and is a member of Port Louis Development Initiative (PLDI) and Mauritius Chamber of Commerce and Industry (MCCI).
PRINCIPLE 3: DIRECTOR APPOINTMENT PROCEDURES CONTINUED PRINCIPLE 3: DIRECTOR APPOINTMENT PROCEDURES CONTINUED DIRECTORS’ PROFILES CONTINUED
PAWAN K JUWAHEER EXECUTIVE DIRECTOR
(Aged 56)
Pawan Juwaheer is the Indian Ocean Business Development Manager of Vivo Energy Group since April 2019. He studied Mechanical Engineering at the University of Manchester Institute of Science and Technology, UK. Mr Juwaheer joined Vivo Energy Mauritus Limited (formerly Shell Mauritius Limited) in 1986 and has over the years occupied different positions across the business in Mauritius, Tunisia and Kenya, before being appointed Country Chairman of the company in 2006 then Managing Director of VEML in January 2012. Mr. Juwaheer is a member of the National Committee on Corporate Governance. Mr Juwaheer is also a director of Vivo Energy Madagascar Holdings Limited, Mauritius Cargo Community System and ABSA (Mauritius) Limited.
He was appointed Board member on 30 June 2006. He resigned as Managing Director on 01 April 2019 and remains as a non-executive director on the Board.
ROGER LEUNG INDEPENDENT NON-EXECUTIVE DIRECTOR
(Aged 73)
Roger Leung is a member of the Association of the Chartered Institute of bankers in UK and a fellow member of the Mauritius Institute of Directors. He retired from Barclays Bank in September 2005 as Regional Corporate Director. He has been trustee of the Barclays Employees’ Pension Fund and a Director of the Barclays Leasing Company (Mauritius) Limited. He also works as a Consultant in business restructuring and in performance optimisation. He is a director of the Mauritius Development Investment Trust. He was appointed as a board member on 30 June 2006.
JOSEPH GETUNO (APPOINTED AS DIRECTOR ON 28 JUNE 2019) EXECUTIVE DIRECTOR AND FINANCE MANAGER
(Aged 36)
A Member of the Association of Certified Chartered Accountants (ACCA), Joseph Getuno joined Vivo Energy Mauritius Limited on 01 June 2019. He is the holder of a BSc in Mechatronics Engineering from Jomo Kenyatta University of Agriculture and Technology, Kenya and a BSc in Applied Accounting from Oxford Brookes University, UK. Joseph started his career at Unilever Kenya Limited before moving to British American Tobacco (BAT) where he held various roles as Country Finance Manager at BAT Rwanda, Planning and Reporting Manager Export Markets, Manufacturing Finance Manager BAT Kenya and Finance Director in the Democratic Republic of Congo (DRC).
Joseph was appointed as a board member on 28 June 2019 and is also director of Vivo Energy Madagascar Holdings Limited, Vivo Energy Africa Holdings and Vivo Energy Senegal Holdings.
TIMOTHY TAYLOR INDEPENDENT NON-EXECUTIVE DIRECTOR
(Aged 73)
Timothy Taylor holds a BA (Hons) in Industrial Economics from Nottingham University in the United Kingdom. He worked in United Kingdom until 1972 when he returned to Mauritius and joined Rogers, a leading Mauritian Commercial and Services Group. He became Chief Executive of Rogers in 1999 and retired in December 2006. He became Chairman (non-executive) of Rogers in 2007, retiring in October 2012. He is currently Director of CIM Financial Services Ltd and Chairman of Scott & Co Ltd. Mr Taylor is the Honorary Consul of Norway in Mauritius and former Chairman of the Mauritius Chamber of Commerce and Industry. He is a former Chairman of the National Committee on Corporate Governance. He has been a member of the Council of the Mauritian Wildlife Foundation since 2006 and is the President since 2009. He was appointed as a board member on 12 December 2013.
BRUNO MADANAMOOTHOO (RESIGNED AS DIRECTOR ON THE 29TH MARCH 2019)
(Aged 55)
Fellow member of the Association of Chartered Certified Accountants, Bruno Madanamoothoo joined Vivo Energy Mauritius Limited (formerly Shell Mauritius Limited) in 1992. He is a qualified engineer from the Institut National des Sciences Appliquées (INSA), Toulouse, France and holds a degree in Business Administration from the Institut d'Administration des Entreprises (IAE), Toulouse, France. He has over 25 years’ experience at local and regional level within the Group. Prior to his appointment as Acting Finance Manager, he held various positions, including Financial Controller, Marine Centre Southern Africa Finance Manager, Marine Business Analyst, Stock Controller and Transport Scheduler.
Mr Madanamoothoo was appointed board member on 14 August 2018. He resigned as Director of VEML on the 29 March 2019.
MR PATRICK CRIGHTON (RESIGNED AS DIRECTOR ON THE 29TH MARCH 2019)
(Aged 57)
Fellow of the Association of Chartered Certified Accountants, Patrick Crighton joined Vivo Energy Mauritus Limited (formerly Shell Mauritius Limited) in January 1987. He has since occupied the positions of Management Accountant, Legal and Tax Accountant, Treasury and Corporate Accountant and Credit Manager before being appointed Finance Manager in 2001. Mr. Crighton is holder of a Masters in Business Administration from Napier University.
He was appointed Board member on 29 March 2019. He resigned as a director on 17 July 2019.
PROFILE OF COMPANY SECRETARY
Executive Services Limited Founded in 1985, Executive Services is a leading company in the field of corporate secretarial services in Mauritius. The core businesses of the Company include incorporation of companies, business registration, full corporate secretarial and administrative services as well as accounting and tax services.
The Company has a large portfolio of clients within different industry sectors of the country to whom it provides quality and personalised services whilst maintaining confidentiality, professionalism and integrity.
PROFILE OF MANAGEMENT TEAM The VEML management team is responsible for supervising the general course of business of the company and advises the Board of directors.
1 NANCY YOUNG 3 ASHVIN RAMDENEE2 KRISHNEN VENCADACHELLUM
4 RAVI RAMJUS 5 BELINDA TEEROOVENGADUM
RAMTOHUL
1 NANCY YOUNG HUMAN RESOURCES MANAGER Nancy Young is the holder of a Master’s degree in Psychology with specialisation in Industrial Psychology from the University of Bordeaux in France. She is also an alumni from the International Institute of Management Development, a business school based in Lausanne in Switzerland.
She joined Vivo Energy Mauritus Limited (formerly Shell Mauritius Limited) in 1990 as Assistant Personnel and Services Manager having worked on a major project with a consultancy firm. She currently holds the position of Human Resources Manager.
4 RAVI RAMJUS BUSINESS-TO-BUSINESS MANAGER Ravi Ramjus, Business-to-Business Manager, holds a B.Tech in Mechanical Engineering from the University of Mauritius and a Master’s in Business Administration from the Surrey European Management School in the UK. Mr. Ramjus has occupied several positions at local, regional and international levels within the company in Engineering, Retail and Business Development. He occupied the post of Retail Manager from 2004-2008 before being appointed Head of Payment Systems and Loyalty. Since October 2015 he is heading the B2B and B2C activities with responsibilities of LPG, Lubricants, Aviation, Commercial Fuels and Customer Service.
2 KRISHNEN VENCADACHELLUM RETAIL AND CR MANAGER Holder of a degree in Mechanical Engineering from the NIT Allahabad, India and a Masters degree in Business Administration from the University of Mauritius, Krishnen Vencadachellum joined Vivo Energy Mauritus Limited (formerly Shell Mauritius Limited) in 2004 as Retail Engineer and Property Manager. In 2009, he was appointed Operations Excellence Coordinator, Network Planner for East and South East Africa in 2011, before becoming Executive Assistant to the VP Indian Ocean Islands. Mr. Vencadachellum was appointed Retail Manager in 2012.
5 BELINDA TEEROOVENGADUM RAMTOHUL
MARKETING AND COMMUNICATIONS MANAGER Belinda Teeroovengadum Ramtohul holds a Master of Engineering degree in IT from the Institut National des Sciences Appliquées de Lyon in France. She joined Shell Mauritius as Assistant IT Manager thereafter was appointed as IT Manager. She then occupied the post of Communications Manager before being appointed Marketing and Communications Manager in April 2019.
3 ASHVIN RAMDENEE SUPPLY AND DISTRIBUTION MANAGER Ashvin Ramdenee is holder of a Master of Engineering degree in Mechatronics from the University of Leeds, UK. He joined Vivo Energy Mauritus Limited (formerly Shell Mauritius Limited) in 2000 as Plant and Speciality Engineer. Thereafter, he has worked in diverse sectors within the Group in Engineering, Customer Service, Terminal Operations, Planning, Supply Chain and Strategy at Local, African and Global levels. Mr. Ramdenee was appointed Marine and Aviation Manager in March 2015. He then became Supply and Distribution Manager in June 2017, while continuing to support the Marine business.
PRINCIPLE 4: DIRECTORS DUTIES, REMUNERATION AND PERFORMANCE PRINCIPLE 5: RISK GOVERNANCE AND INTERNAL CONTROL CONTINUED
PRINCIPLE 5: RISK GOVERNANCE AND INTERNAL CONTROL
DIRECTORS’ DUTIES All Directors are fully made aware of their fiduciary duties upon their appointment. Moreover all statutory documents, policies and rules and regulations are handed over to them on the induction date and regularly updated for changes over time.
An information usage and security policy exists and is also shared with the directors as part of their induction process. A copy of the information policy can be found on the company website.
REMUNERATION
Statement of Remuneration Philosophy In designing its compensation structure, the Company seeks to ensure that the level and mix of remuneration is competitive, relevant and appropriate.
All Directors receive a fixed fee. The level of Directors’ fees is reviewed regularly against market benchmarks.
Remuneration of Executive Directors During the year ended 31 December 2019, Executive Directors received an aggregate amount of MUR 27,220,290 (2018 - MUR 26,553,176) as remuneration and benefits
RISK GOVERNANCE AND INTERNAL CONTROL CONTINUED
Key Elements of our Risk Management Set-Up Vivo Energy Mauritius Limited adopts a risk based approach to management of risks to ensure achievement of its business objectives.
Risk identification, management and internal controls The executive management has implemented a risk identification and management process to manage the key risks facing the business. This is realised by regular risk review meetings that review the current and emerging business risks. Subsequently, management classifies these risks in terms of the probability and severity using a risk classification matrix. The classification enables the prioritisation of resources to address the highest impact and most probable risks. Management then identifies the strategies required to manage the prioritised risks. On a regular basis, the audit committee reviews the risk matrix and proposed strategies to counter the identified risks.
To supplement the risk matrices, Management applied the following to manage key risks during the financial year 2019:
– A Health, Safety, Security and Environment (HSSE) policy, a common requirement for HSSE management systems that is also subject to external certification for major installations;
RISK GOVERNANCE AND INTERNAL CONTROL
Responsibility The VEML board is ultimately responsible for maintaining an effective system of internal control and risk management. To achieve this the board:
– Implemented structures and processes to effectively manage risks;
– Identified the principal risks and uncertainties affecting the Company;
from the Company. Out of this sum, MUR 7,965,527 (2018 - MUR 8,223,461) is variable in line with the company performance.
Remuneration of Non-Executive Directors The Non-Executive Directors received an aggregate amount of MUR 868,320 (2018 - MUR 892,320) as remuneration and benefits from the Company. The Non-Executive Directors are not entitled to variable pay.
BOARD EVALUATION The Board recognises the need to undertake a regular review of the performance as well as the effectiveness of the Board and its Committees. The Board shall consider setting up an evaluation exercise during the next financial year ending December 2020 for the evaluation of the Board, the Directors and the Committees.
CONFLICTS OF INTEREST Each Director ensures that no decision or action is taken that places his interests in front of the interests of the business. The Company operates a process whereby each board member is required to disclose any actual or potential conflicts of interests on an annual basis. These declarations are recorded centrally by the organisation’s ethics and compliance division.
This risk based approach consists of a number of general and specific risk management processes and policies. The Statement of General Business Principles provides the overall control framework that drives the risk identification process that results in the creation of primary control mechanisms. Management is responsible for the implementation of these
– A financial control handbook that established standards for the application of internal financial controls;
– Arrangements for the management of property, liability and treasury risks; and
– A business control incident reporting process that enabled monitoring and appropriate follow-up actions for incidents arising as a result of control breakdowns. Lessons learned from these incidents were used to improve the overall control framework.
As part of the Vivo Energy Group reporting procedures, a formalised self-appraisal and assurance letter process is in place. Annually, Management of every business unit provides assurance as to the adequacy of governance arrangements, risk and internal control environment, HSSE management, financial controls including reporting, treasury management, brand management and information management. The Managing Director also provides assurance regarding compliance with the Statement of General Business Principles and other important topics including any identified integrity concerns or instances of bribery or illegal payments.
– Ensured that management developed and implemented the relevant risk management frameworks;
– Ensured that systems and processes were in place for implementing, maintaining and monitoring robust internal controls and
– Ensured that whistle-blowing rules and procedures were in place.
The board discharged its mandate through the Audit and risk committee which set the direction on the design and implementation
VEML Employees must avoid conflicts of interest between their private activities and their part in the conduct of Company business. They must also declare in writing to the Company potential conflicts of interest. All business transactions on behalf of a Vivo Energy Company are accurately and fairly recorded in the accounts of the Company in accordance with established procedures and are subject to audit and disclosure. We also report annually on any breaches of our ‘no bribes’ policy.
Our annual business assurance letter process helps us to monitor whether we are living by our Principles, in accordance with both external laws and regulations and with our internal standards. Each year, the Managing Director reports back to the Chief Executive Officer of Vivo Energy Group, in writing, whether VEML has acted in line with these requirements and to report material exceptions. Action is taken to address areas of non-compliance.
All new employees and Company Directors receive training on the Code of Ethics. The Company Secretary notifies the board of any potential conflict of interest and maintains an interest register which is available to the public on request.
primary control mechanisms to manage the risks on a daily basis. Reporting mechanisms exist that provide feedback to management and to the Board on the effective functioning of the risk management process. A summary of the process is outlined below:
The assurance letter is reviewed by Vivo Energy Audit and Risk Committee and supports representations made to the external auditors.
The assurance framework relies upon objective appraisals by internal audit. The results of internal audit’s risk-based reviews of operations provide an independent view regarding the effectiveness of risk and control management systems. These established reviews; reporting and assurance processes enable Vivo Energy to regularly consider the overall effectiveness of the system of internal control and to perform a full annual review of the system’s effectiveness.
Internal audits are conducted in response to identified risks and resulting actions from the internal audits are actioned by Management and reported back to the Audit and Risk Committee on a regular basis. The Vivo Energy Group has an internal audit plan in place. The plan is set up such that internal controls are reviewed at regular intervals at all operating units.
of a robust internal control system that identified, managed and provided reasonable assurance against risks facing the business. The risk management framework of Vivo Energy Mauritius Limited defines the roles and responsibilities based on transparency and accountability principles. The allocation of responsibilities and segregation of duties are structured in a way to ensure that decisions are taken at the most appropriate levels.
Monitoring Monitor the risks through forums and committees
Control Activtities Put risk-mitigation strategies in place
Risk Assessment Assess the importance of the risks
Control Environment Identification of risks
PRINCIPLE 5: RISK GOVERNANCE AND INTERNAL CONTROL CONTINUED PRINCIPLE 5: RISK GOVERNANCE AND INTERNAL CONTROL CONTINUED
RISK IDENTIFICATION, MANAGEMENT AND INTERNAL CONTROLS (CONTINUED) A description of the risks identified and managed during the financial year 2019 are outlined in the table below:
HOW THE KEY RISKS WERE ADDRESSED CONTINUED
Operational and Compliance risk related to supplies Whereas product demand for inland trade is fairly predictable, with transfer prices fixed monthly and regulated through the Automatic Pricing Mechanism by the State Trading Corporation (STC), international sales are not price controlled, very seasonal and unpredictable. In this respect, efficient management of the product replenishment cycle, product availability and freight was done to ensure continuity of supply and hence reliable service to our customers.
Risk related to Health, Safety, Security and Environment (HSSE) VEML operates under a common set of business principles, supported by policies and business controls. These include a Health, Safety, Security, Environment (HSSE) and Social Performance (SP) Commitment and Policy, which require that the Company has a systematic approach to HSSE & SP
HOW THE KEY RISKS WERE ADDRESSED
Strategic risk related to reputation VEML and the Vivo Energy Group value the perception of stakeholders as no Company or business operates in a vacuum. Our licence to operate and our very existence rely on the understanding, goodwill and emotion of stakeholders. As such, VEML addresses the interests, concerns and perceptions of key stakeholders through a variety of methods. The role of the Managing Director, in particular, is specifically designed to protect the reputation of Vivo Energy companies operating in a country with the support from communications both locally and at Vivo Energy Group level. Statements of commitments, policies and standards adopted by VEML include the Statement of General Business Principles, Code of Conduct, Commitment to Sustainable Development, HSSE & SP Commitment and Policy, Diversity and Inclusiveness Standards, Environmental Minimum Standards, Environmental, Social and Health Impact Assessment, Minimum Health Standards,
management. We have put in place the Vivo Energy Group mandatory procedure for an HSSE Management System (HSSE MS), which is a structured set of controls for managing the business that takes into account HSSE MS implementation requirements at business and operation level. The elements of this management system were implemented in accordance with Vivo Energy Group guidance.
Risk related to Information Security VEML has in place an Information Security programme that ensures it adheres to the Information security based on ISO 27001. Disaster recovery plans are in place and tested to ensure that there is minimum business disruption in the event of a disaster. All new staff and contractors are continually coached to complete the mandatory e-learning information security training module; the objective of the training being to enhance awareness, education and behaviour against information security threats.
Security Standards, HIV/AIDS Policy, Human Rights Standards, Road Transport Safety Policy, Code of Ethics and adoption of the Code of Corporate Governance For Mauritius.
Financial risk related to credit Credit risk is one of the Company’s key risks. Vivo Energy Group has devised a set of rules that apply across the continent to manage this risk. The main activities involved customer credit risk evaluation and control to ensure default risk was kept at a minimum.
Risk related to foreign exchange More than one third of the Company’s business is carried out in foreign currency. The Company’s risk mitigation policy with respect to foreign currency is to minimise exposure by matching currencies whenever feasible and entering into forward contracts whenever possible and economically viable.
Risk related to fluctuating oil prices Oil prices can vary as a result of various factors, including natural disasters, political instability or
IT Governance The Company has an IT Security Policy in place and relevant parts of this policy are communicated to its team members. This is regularly reviewed by the Board and Executive Management to ensure it is up to date with changes in technology and security standards. The Board also approves all major IT expenditures to ensure value is obtained from the investments in Information technology.
The Company also actively pursued upgrades to its information systems to support its growth strategy across multiple locations whilst ensuring that the Company complies with relevant data protection laws and regulations notably the Data Protection Act of 2017.
Whistleblowing Vivo Energy Mauritius has a whistleblowing helpline available to all employees, third parties and members of the public who wish to seek advice or to raise a concern on matters relating to compliance with the law or with the company’s General Business Principles. The whistleblowing helpline is 23 058 690 059.
conflicts, economic conditions or action taken by major oil-exporting countries. Fluctuations in these prices could have an adverse impact on VEML investment decisions, operational performance and financial position.
Management continuously monitors movements in oil prices and adjusts the purchasing strategy to obtain the best value for money whilst reducing working capital exposure.
Risk related to economic and financial market conditions VEML operates in changing economic and financial market conditions. There are risks from political and economic instability. Crystallisation of one of these risks could have an adverse impact on the results of operations and financial position of VEML. Management continuously monitors movements in economic and marketing conditions and adjusts the operational strategy to ensure the business objectives are realised.
RISK RELATED TO: GENERAL DEFINITIONS
Strategic Reputation Reputational risk is a threat or danger to the reputation or standing of a business or entity.
Management agreements Any shareholders’ agreement that affects the governance of the Company by the Board.
Financial Credit Credit risk is the possibility of a loss resulting from a customer’s failure to repay a debt or meet contractual obligations.
Foreign exchange The exchange risk arises when there is a risk of an unfavourable change in exchange rate between the domestic currency and the denominated currency before or on the date when the transaction is completed.
Fluctuating oil prices Adverse changes in oil and oil products prices due to various factors, including natural disasters, political instability or conflicts, economic conditions or action taken by major oil- exporting countries.
Market conditions Unexpected changes to economic and financial market conditions to which VEML is subject to. These risks may arise from political and economic instability.
Operational & Supplies Risks due to product shortage or stock outs causing loss of sales, revenue and business. Compliance
Health, Safety, Security & Risks associated with specific hazards on health, occupational safety, environment Environment (HSSE) and security.
Information security The threats and vulnerabilities associated with the operation and use of information systems and the environments in which those systems operate.
IT Governance Risk related to information technology that can cause adverse impacts on the organisation's business processes.
Operational hazards, Risk of operational hazards, natural disasters and pandemics, which could result in loss of life, natural disasters & pandemics adverse impact on the environment and cause disruption to business activities.
Change in legislation and fiscal Risk of change in legislation, taxation and regulation, changes that could have an adverse and regulatory policies effect on the results of operations and financial position of the Company.
Effective governance Risk of incorrect design and operation of internal control, which may result in damage to the Company’s reputation, financial results and employees.
Partners and ventures Risk arising due to loss of influence and control over the operations, behaviours and performance of business activities of other parties with whom the Company is engaged. This could result in damage to staff, assets and financial results..
PRINCIPLE 6: REPORTING WITH INTEGRITY
REPORTING The Board of directors is ultimately responsible for the preparation of the financial statements of the company. These financial statements and accompanying reports, are prepared in accordance with IFRS. A copy of the annual report is available in the company’s offices at Roche Bois and on the company website.
The policies that govern the operations of the company, which ensure integrity in reporting are as outlined in the sections below:
Vivo Energy HR Performance, Rewards and Benefits Philosophy People at Vivo Energy Mauritius Limited are critical to the achievement of our business objectives. Vivo Energy Mauritius Limited compensation policies, practices, and systems are intended to recognise and support:
– Individual and business performance; both short and long term;
– Vivo Energy core values, business principles and people principles;
– Business and people strategies;
– Market competitiveness and the importance of internal relationships; and
– Different business and country economic, social, legal, and regulatory environments.
Performance and reward policies of the company support people to excel in roles
through fostering affiliation with Vivo Energy, and encourage behaviour that leads to the achievement of business and personal objectives. As a result, the company was able to attract and retain its top talent in the year.
Business Integrity Our commitment to business integrity is clear and unequivocal; VEML insists on honesty, integrity and fairness in all aspects of our business and expects the same in our relationships with all those with whom we do b

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VIVO ENERGY MAURITIUS ANNUAL REPORT & FINANCIAL …