Business Partners: 2007 Annual Report

Investing in entrepreneurs
ensures sustained economic growth
annual report 2007
CONTENTS
2006/2007 Highlights Vision, Mission and Values 2007/2008 Strategic Focus OPERATIONAL REVIEW Five Year Summary Directors Executive Management Management Review Business Investments Property Management Services Technical Assistance, Mentorship and Consulting Services Operational Support Services Marketing Human Resources CORPORATE AND SHAREHOLDER INFORMATION Shareholder Information Corporate Governance Enterprise Risk Management Environmental and Social Management 1 2 3 4 5 6 8 10 11 22 25 28 29 31
33 34 35 40 42 44 45 46
Business Partners Limited is a specialist investment company, providing customised and integrated investment, mentorship and property management services for small and medium enterprises in South Africa.
ISO 9001:2000 certified
Broad-Based Economic Empowerment Value added Statement FINANCIAL STATEMENTS
Corporate sustainability is very important to Business Partners and the issue is covered throughout the Annual Report. This symbol indicates the sections that deal with the various aspects of this important subject.
2006/2007 HIGHLIGHTS
The investment portfolio under management increased by R268,3 million to R1 497,7 million an increase of 21,8 percent (2006: R1 229,4 million) During the year, 664 investments to the value of R876,6 million were approved an improvement of 18,5 percent (2006: 633 investments to the value of R740,0 million). Of these, - 296 investments to the value of R345,1 million were approved for black entrepreneurs (2006: 262 investments to the value of R271,7 million) - 247 investments to the value of R281,3 million were approved for businesses owned and run by women (2006: 198 investments to the value of R178,5 million) - 58 investments to the value of R53,6 million were approved on behalf of the UYF Business Partners Franchise Fund, launched in 2003 as a R125 million fund for investment in historically-disadvantaged youth in the franchising sector - 48 investments to the value of R21,8 million were approved on behalf of the Business Partners-Khula Start-up Fund, launched in 2006 as a R150 million fund for investment in start-up businesses by historically disadvantaged individuals Properties under management at the end of the financial year comprised more than 682 000m2 of lettable space and are occupied by 3 475 tenants More than 7 780 employment opportunities were facilitated through our investment activities 521 mentors are available to provide technical assistance, mentorship and consulting services to clients Net profit for the year is R160,8 million, an increase of 23,3 percent from R130,4 million reported in March 2006 Earnings per share increased by 22,8 percent from 81,0 cents per share to 99,5 cents per share Dividends per share increased by 11,1 percent to 20 cents per share
536,1 2007
Operations
Financial and Corporate

405,2 440,5
03 04 05 06 07
Profit per employee improved by 21,7 percent to R536 100 per employee.
Net profit per employee

(R000)
81,0
95,4
99,5
876,6
73,2
73,7
62,5
740,0
20,0
660,5
18,0
03
04
05
06
07
400,0
448,9
16,0
16,0
16,0
03 04 05 06 07
03 04 05 06 07
Share performance
Dividends per ordinary share (cents) Headline earnings per share (cents) Earnings per share (cents)
Business investment approvals

(Rmillion)
Assets per employee

(R000)
3 798
5 041
57,7
5 632
6 184
72,5
70,9
6 988
78,4
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385,4
360,5
VISION, MISSION, GOALS AND VALUES
Our vision is to be a world-class, added-value investor in small and medium enterprises, thereby facilitating wealth generation, job creation and economic development in South Africa.
Our mission is to fulfil our vision by investing capital, skill and knowledge into viable entrepreneurial enterprises.
Our goal is to be one of the most internationally respected, successful and profitable investors in small and medium enterprises.
Our values are:

Business and Personal Integrity Everything we do, in both the running of our business and in our personal conduct, is guided first and foremost by honesty, integrity and respect for human dignity. Superior Client Service We exist for our clients, we enjoy serving them and aim to delight them with our products and the quality of our service. Economic Merit All of our investments are founded on economic merit, ensuring broad access to investment finance and added-value services for all communities and optimal effectiveness for our clients and our shareholders. It is our aim to be frugal in all aspects of expenditure in our business so that we ensure long-term sustainability and deliver optimal value for our clients and shareholders. Entrepreneurship We seek to live the name of our organisation by becoming true partners with our clients in the success of their businesses and by ourselves being entrepreneurial in our approach to doing business.
2007/2008 STRATEGIC FOCUS

Overview
Business Partners is committed to investing capital, skill and knowledge in entrepreneurs and, in line with this, has defined its core strategic focus for the 2007/2008 financial year as being the extension and enrichment of its services to entrepreneurs. The Companys focus for 2007/2008 will remain on: reaching more entrepreneurs through the Companys enlarged footprint successfully managing the specialist funds, thereby extending the companys focus on Black Economic Empowerment ensuring that operating efficiencies remain world-class attracting, training and retaining staff by way of the companys Employer of Choice initiative Business Partners will continue to ensure that it exercises sound business practices in all areas and aspects of its business and that it remains a stable, competitive, financiallyviable and profitable business. The Companys envisioned expanding footprint is continuing with the launch of the Business Partners International Kenya Fund, which was launched in March 2007 and the launch of the Business Partners Womens Fund in May 2007. leadership of Chief Operating Officer, Byron Jeacocks The Zulma Investment Unit, under the leadership of a Chief Operating Officer to be appointed The Property Investment Unit, under the leadership of Chief Operating Officer, Owen Holland The Business Partners Umsobomvu Franchise Fund, under the leadership of Chief Operating Officer, Eric Rosen The Business Partners-Khula Start-Up Fund, under the leadership of Chief Operating Officer, Xolani Meva Human Resources, under the Leadership of Executive General Manager, JM Smith Company Secretarial and Legal Services, under the leadership of Company Secretary, Marjan Gerbrands Marketing Co-Ordination, under the leadership of Manager, Petro Bothma
2007 03 BUSINESS PARTNERS annual report
Employer of Choice Initiative

The Employer of Choice initiative includes (but is not limited to) the following facets: A Diversity Audit was conducted by specialist company Mandate Molefi, to compare Business Partners with other South African organisations with regard to diversity management. Results will be used to influence policies and actions to ensure Business Partners is an excellent performer in managing diversity Career planning and development is important to address the concerns and expectations of employees and Talent Management will receive specific attention Business Partners is in the process of developing a formal training academy for operational staff. Training will continue to be a priority on all levels internal and external The IT systems are being upgraded to improve effective use of technology The recruitment screening processes are being improved to ensure that new employees have the necessary skills and passion for our mission and vision
Egoli Business Unit, under the leadership of Executive Director, Christo Botes. Egoli comprises: The Gauteng South Investment Unit, under the leadership of Chief Operating Officer, Freddie Bruintjies The Free State, Northern Cape and North West Province Investment Unit, under the leadership of Chief Operating Officer, Chris Koen The Gauteng North and Limpopo Investment Unit, under the leadership of a Chief Operating Officer to be appointed The Empowerment Fund, under the leadership of Chief Operating Officer, Willie Nortier The Womens Fund, under the leadership of Fund Manager, Katja Naumann Business Partners International Business Unit, under the leadership of Chief Operating Officer, Mark Paper. Business Partners Property Management Business Unit, under the leadership of Chief Operating Officer, Willem Bosch. Business Partners Mentorship and Consulting Services, under the leadership of Chief Operating Officer, Paul Malherbe.
Organisational Structure
As of 1 April 2006, Business Partners has been structured as follows: iKapa Business Unit, under the leadership of Deputy Managing Director, Nazeem Martin. iKapa comprises: The Coastal Western Cape Investment Unit, under the leadership of Chief Operating Officer, Anton Roelofse The Inland Western Cape Investment Unit, under the leadership of Chief Operating Officer, Dewald Gaigher The Eastern Cape Investment Unit, under the leadership of Chief Operating Officer, Lionel Billings The Tourism Fund, under the leadership of Chief Operating Officer, Nikita Mfenyana eThekwini Business Unit, under the leadership of Executive Director, Gerrie van Biljon. eThekwini comprises: The Greater Durban Investment Unit, under the
Impact
South Africas economy is experiencing the longest economic upswing in the countrys history, and the trend is expected to continue due to increased government and parastatal spend on infrastructure, and increasing investment by South African entrepreneurs and foreign investors. These major drivers should enable small and medium enterprises to grow and become the middle class of the business community, thus playing the vital role of wealth and employment creation in South Africa, thereby assisting in promoting socio-political stability.
The Corporate Structures are:

Management Services, under the leadership of Chief Financial Officer, Ben Bierman Support Services, under the leadership of Executive General Manager, Pierre Mey Systems Quality, under the leadership of Executive General Manager, Lorraine Nakene
OPERATIONAL REVIEW
2007 BUSINESS PARTNERS annual report
Expanding our investment in innovative entrepreneurs
04
FIVE YEAR SUMMARY

Increase/(decrease) Consolidated Balance Sheet (R000) Business investment approvals Capital and reserves Total assets Deposits and bank balances Consolidated Income Statement (R000) Net profit Adjustments Headline earnings Change in net profit Change in headline earnings Share Statistics Earnings per share (cents) Headline earnings per share (cents) Dividends per ordinary share (cents) Dividend cover (times) Net asset value per share (cents) Ratios Effective tax rate Return on opening shareholders interest Return on average assets Operating expenditure/total income Net profit per employee (R000) Net profit/employee cost 4,6% 10,6% 9,3% -3,4% 21,7% 22,2% 25,1% 9,4% 8,2% 48,8% 536,1 2,2 24,0% 8,5% 7,5% 50,5% 440,5 1,8 26,6% 6,6% 6,0% 55,6% 360,5 1,4 31,1% 8,2% 7,4% 52,0% 405,2 1,8 28,8% 8,5% 7,8% 46,6% 385,4 1,8 22,8% 21,7% 11,1% 11,1% 13,3% 99,5 95,4 20 5,0 1 206,6 81,0 78,4 18 4,5 1 064,6 62,5 57,7 16 3,9 997,1 73,7 70,9 16 4,6 949,5 73,2 72,5 16 4,6 894,0 160 821 (6 614) 154 207 23,3% 22,1% 130 398 (4 086) 126 312 29,6% 36,0% 100 588 (7 729) 92 859 -15,3% -18,7% 118 715 (4 508) 114 207 0,7% -2,2% 117 927 (1 132) 116 795 31,3% 33,3% 18,5% 13,3% 14,5% -27,5% 876 569 1 942 977 2 096 253 280 615 740 011 1 714 395 1 830 339 386 847 660 464 1 605 711 1 729 567 469 655 448 868 1 528 933 1 650 193 490 484 399 978 1 439 687 1 542 486 356 020
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2006
2005
2004
2003
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2007
2007/2006
DIRECTORS
Mr Johann Rupert 1,4

Chairman
Chairman: Personnel Committee Chairman: Nominations Committee Appointed: 31 August 1993 Chairman: Compagnie Financire Richemont SA, Remgro Limited and Venfin Limited
Mr Theo van Wyk 1,2,3,4,5,6

Deputy Chairman
Alternate Chairman: Personnel Committee Alternate Chairman: Nominations Committee Chairman: Footprint Committee Appointed: 18 August 1998 Executive Director: Remgro Limited
Mr Jo Schwenke 1,2,3,4,5,6
Managing Director
Appointed: 1 January 1996
Mr Nazeem Martin 6
Deputy Managing Director: iKapa Business Unit
Appointed: 6 November 2002
Mr Philip Baum
Served: 3 March 1994 until 30 August 2001 Re-appointed: 15 January 2002 Chairman and Chief Executive Officer: Anglo Ferrous Metals and Industries Acting Chief Executive Officer: Anglo American South Africa
Mr Christo Botes 5
Executive Director: Egoli Business Unit
Mr Div Geeringh 1,2,3,4

Chairman: Audit and Risk Committee Appointed: 29 August 1989 Director of Companies Alternate: Mr Themba Ngcobo
Dr Paula Huysamer 1,4,5,6

Appointed: 14 February 2002 Executive Director: Vuya Investments (Pty) Limited
Dr Eltie Links 2
Appointed: 14 February 2002 Professor at the University of Stellenbosch Business School
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DIRECTORS
2007
Mr Friedel Meisenholl 2,3

Deputy Chairman: Audit and Risk Committee Appointed: 23 February 2000 Chief Internal Auditor: ABSA Bank Limited
Mr David Moshapalo 3,4

Served: 23 January 1996 until 30 August 2001 Re-appointed: 14 February 2002 Deputy Chairman: Strategic Partners Group BEE Partner in Gautrain Project
Mr Themba Ngcobo 3,5,6

Alternate to Mr Div Geeringh Appointed: 20 February 2002 Deputy Chairman: Ushaka Marine Management Company President: Durban Chamber of Commerce and Industry Entrepreneur and Director of Companies
Dr Mamphela Ramphele1,4,5,6
Chairperson: B-BBEE Strategy Committee Appointed: 26 July 2005 Chairperson: Circle Capital Ventures (Pty) Limited
Dr Zavareh Rustomjee 1,2,4,5,6

Appointed: 23 January 1996 Independent Consultant
Regional Committees
Egoli Business Unit (Johannesburg) Mr David Moshapalo (Chairman) 3,4, Ms Buhle Mthethwa, Mr Lemmy Mule, Dr Jurgen Smith, Mr Andrew Siebrits, Mr Phillip Thobela, Mr Jo Schwenke (Ex-Officio), Mr Christo Botes (Ex-Officio) eThekwini Business Unit (Durban) Mr Themba Ngcobo (Chairman) 3,5,6, Mr Johan de Jager Prof Dilip Garach, Ms Londiwe Mthembu, Mr Jo Schwenke (Ex-Officio), Mr Gerrie van Biljon (Ex-Officio) iKapa Business Unit (Cape Town) Dr Carel Stander (Chairman) 3, Mr Richard Ball, Ms Debbie Bruce, Dr Pat Gorvalla, Mr Peter Matshitse, Mr Yusuf Pahad, Mr Themba Pasiwe, Mr Jack Patel, Mr Jo Schwenke (Ex-Officio), Mr Nazeem Martin (Ex-Officio)
Mr Xola Sithole 1,2,4

Appointed: 18 February 2004 Managing Director: Khula Enterprise Finance Limited
Dr Jurgen Smith 1
Served: 1 August 1987 until 30 August 2001 Re-appointed: 14 February 2002 Business Consultant and Director of Companies
Mr Gerrie van Biljon

Executive Director: eThekwini Business Unit
1 Personnel Committee
2 Audit and Risk Committee 3 National Investment Committee 4 Nominations Committee 5 Footprint Committee: Womens Fund 6 B-BBEE Strategy Committee
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EXECUTIVE MANAGEMENT
Mr Jo Schwenke (55)
Managing Director
B Com, CA (SA), B luris 17 years service
Mr Nazeem Martin (45)

Deputy Managing Director: iKapa Business Unit
BA, HDE, M Urban Planning 9 years service
Mr Ben Bierman (41)

Chief Financial Officer
B Com, B Com (Hons), ACMA, H Dip Tax 17 years service
Mr Christo Botes (46)

Executive Director: Egoli Business Unit
B Acc, B Compt Hons, CTA 21 years service
Mr Pierre Mey (46)

Executive General Manager: Support Services
B Com 20 years service
Ms Lorraine Nakene (31)

Executive General Manager: Systems Quality
B Com (cum laude), CA (SA) 1 years service
Mr JM Smith (43)
Executive General Manager: Human Resources
B Soc Sc (cum laude), B Com (Hons) (cum laude), M Com 15 years service
Mr Gerrie van Biljon (49)

Executive Director: eThekwini Business Unit
B Com, MBA 21 years service
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EXECUTIVE MANAGEMENT
2007
Mr Willem Bosch (52)

Chief Operating Officer: Property Management Services
B Com Acct, CPA 15 years service
Ms Petro Bothma (48)

Manager: Marketing Coordination
21 years service
Ms Marjan Gerbrands (33)

Company Secretary Corporate Legal Adviser
BLC, LLB (cum laude), LLM 6 years service
On-going business support from a committed management team for the challenges of todays business environment
Mr Paul Malherbe (36)
Chief Operating Officer: Technical Assistance, Mentorship and Consulting Services
B Compt, MBL 12 years service
Mr Mark Paper (41)

Chief Operating Officer: Business Partners International
15 years service
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BUSINESS PARTNERS
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MANAGEMENT REVIEW
Complete business solutions tailored to meet the specific needs of clients

10
MANAGEMENT REVIEW
Business Partners Limited is South Africas leading specialist investment company for small and medium enterprises. It provides a full-service offering for entrepreneurs, which includes customised investment solutions, property broking, property management, technical assistance, mentorship, consulting and ongoing business support through industryspecific units. Integrated business solutions are individually structured to meet the specific needs of a wide range of entrepreneurs, from single-owner private practices to multi-owner management buy-outs or buy-ins.
The Company invests in independent enterprises in the commercial, manufacturing and services sectors of the economy, with the exception of on-lending activities, farming operations and nonprofit organisations. Added-value services are offered on an independent basis, both pre- and post-investment. In addition, Business Partners has unique competencies for assessing the viability of entrepreneurial enterprises and for minimising risk to both business owners and the Company. It is on these competencies that the products and services portfolio is based, as are the Companys unique risk management, quality control and management information systems. During the past financial year, Business Partners has successfully been growing its business in South Africa, and has also undertaken the roll-out of its internationally-recognised investment model into Africa through wholly-owned subsidiary, Business Partners International (Pty) Limited. At Business Partners, we believe that people are our real business. We aim to deliver exactly what each client needs, every time. We do this by using our innovative range of products and services to develop complete business solutions, using debt, royalty and equity financing, as well as our range of added-value services. Solutions are tailored for each client company, and are delivered by experienced, committed people through a well-structured organisation that prides itself on ISO certification for its systems and procedures.
Business Partners Limited (South Africa)

Business Partners Limited has been investing in entrepreneurs for over 26 years. The core of the Companys business is conducted through Business Partners Investments, the largest of its divisions, which houses its business units and investment funds. These comprise three geographically-defined business units, Egoli, eThekwini and iKapa, and five specialist investment funds, the Business Partners Umsobomvu Franchise Fund, the Business Partners-Khula StartUp Fund, the Tourism Fund, the Empowerment Fund and the Property Investment Fund. Property management, technical advice, mentorship, consulting and operational support services are provided through other dedicated divisions. Entrepreneurship continues to be a key focus in South Africa, ensuring that Business Partners is well positioned for sustainable success. This is especially so as government has identified small and medium enterprise as essential to socio-economic growth, national development, political stability and sustainability. Business Partners actively supports entrepreneurial growth by providing investment financing, specialist sectoral knowledge and added-value services for viable small and medium enterprises.
MANAGEMENT REVIEW
Despite intensive competitive activity, especially by commercial banks, strategic developments at Business Partners during the past year have enabled the company to further secure its specialised niche positioning in the financial services market. This has been done by: developing specialist funds to cater for the needs of specific groups of entrepreneurs expanding its focus on true and measurable broad-based black economic empowerment maintaining a constant flow of high-quality deals pre-qualifying potential clients as soon as possible maintaining robust networks with intermediaries such as accountants, lawyers, architects and engineers maintaining a strong marketing and communications presence in the media and amongst target markets developing and strengthening management systems in line with growth employing and training appropriately qualified staff in line with the Companys overall niche positioning maintaining and strengthening value-added services such as mentorship and consulting services, and property management and broking services
Distribution of investment by product

Investment advanced for year ending 31 March 2007 4,2% 5,7% 3,0% 6,1% 14,7% 36,6% 29,7% Equity Partner Property Equity Partner Risk Partner Royalty Risk Partner Property Risk Partner Royalty Partner Loan Partner
Dedicated to advancing South Africas entrepreneurs
MANAGEMENT REVIEW
The Business Partners product portfolio has been conceptualised to provide for entrepreneurs with widely differing needs, and is used as the basis for developing customised solutions for each client or client company. The portfolio comprises: Equity Partner Equity Partner is designed for the entrepreneur who has an exceedingly profitable venture, has own capital to contribute to the venture and requires additional capital for expansion. Risk Partner Risk Partner caters for the needs of the entrepreneur with a viable lifestyle business, who has limited capital and limited security to contribute, but whose business is able to generate sufficient cash flow to afford regular loan repayments.
2007
Product Portfolio

Investment portfolio composition as at 31 March 2007 4,3% 7,0% 2,9% 7,2% 19,5% 30,5% 28,6% Equity Partner Property Equity Partner Risk Partner Royalty Risk Partner Property Risk Partner Royalty Partner Loan Partner
Property Equity Partner Property Equity Partner is designed for the entrepreneur with an exceptionally viable multi-tenant property investment opportunity, providing an above-average return on investment.

Investment portfolio composition as at 31 March 2006 3,9% 6,5% 2,6% 7,6% 20,6% 29,0% 29,8% Equity Partner Property Equity Partner Risk Partner Royalty Risk Partner Property Risk Partner Royalty Partner Loan Partner 13
BUSINESS PARTNERS
Property Risk Partner Property Risk Partner is designed for the entrepreneur who wishes to purchase business premises, but who either wishes to protect cash resources or has a limited own contribution to make, and is therefore unable to raise the normal deposit required by other financial institutions.
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Royalty Partner Royalty Partner is designed to meet the needs of smaller, high-risk ventures, where the cost of converting to equity participation is not practical or justified. It provides for the investment to be structured as a loan with a risk portion, and for this portion to be covered by a royalty fee.
MANAGEMENT REVIEW
2007
Geographically-defined business units

Business Partners three geographically-defined business units cater for social and economic variations that have an influence on entrepreneurial requirements in the countrys different regions. The Egoli Business Unit, for example, caters for a developed geographic area that is largely focused on manufacturing and services industries. eThekwini, on the other hand, caters for a region with a more mixed range of business, tourism and agriculturalsupport enterprises, while iKapa serves the countrys marine fishing industry, in addition to the more usual range of enterprises. The challenges facing the entrepreneurs served by each unit vary widely, as do the solutions provided for them by the experienced staff situated in Business Partners offices across the country. Egoli Business Unit The Egoli Business Unit serves the countrys inland provinces, Gauteng, Free State, Limpopo, North West and the eastern part of the Northern Cape. It has offices situated in Industria and Jet Park in Johannesburg, as well as in Centurion, Polokwane, Bloemfontein, Kimberley and Bethlehem. Gauteng is South Africas business and manufacturing hub, accounting for 40 percent of the countrys GDP (Gross Domestic Product) and 9 percent of the African continents GDP Source: . GCIS (Government Communication and Information System). Gautengs smart province initiative is one of the major business drivers in this region, as is the rapidly-growing urban population. Economic activity in the other provinces is also on the increase, with mining being the primary driver of development in some of the more rural areas. Capital projects costing billions of rand are being undertaken throughout all five provinces, and this will definitely have a positive
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BUSINESS PARTNERS
Egoli eThekwini
Distribution of investment by province

Investment portfolio composition as at 31 March 2007 13,1% 5,1% 25,2% 22,8% 3,1% 4,2% 2,8% 2,5% 21,2% Eastern Cape Free State Gauteng KwaZulu-Natal Limpopo Province Mpumalanga North West Northern Cape Western Cape
iKapa
influence on small and medium enterprise in the short- to mediumterm. Entrepreneurs will find business opportunities in providing products and services for these projects, as well as for the people working on them. The immediate challenge for Egoli will be to identify and empower entrepreneurs in line with this large-scale socio-economic development. During the 2007 financial year, investment approvals through Egoli increased by 28,5 percent, while advances were up 20 percent on the previous year. Most noteworthy is that investment approvals for women-owned businesses increased by 20 percent, while those for black-owned businesses increased by 28 percent. The average investment size increased by 27 percent to R1,55 million per investment, while an improved post-investment management strategy is enabling the unit to keep the risk profile of the investment portfolio within acceptable levels.
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MANAGEMENT REVIEW
On a macro-economic level, interest rate increases of 200 basis points during the year are starting to affect small and medium enterprises in Egolis region negatively. However, well-managed investor relations are enabling the unit to soften the impact of these increases on its clients. Internally, Egoli is delighted with the excellence and diversity of the expanded team it now has in place. The capacity this has created will help to realise the units objective of increasing investment advances by 49 percent during the 2008 financial year. In the specialist investment arena, Egoli administers the Empowerment Fund. The funds aim is to facilitate the participation of black entrepreneurs in the mainstream economy through equity participation in well-established white-owned businesses that are in need of an empowerment partner to ensure future growth. Black partners are required to be involved in the business on a full-time basis, ensuring that empowerment is real and that true value is added to the business. eThekwini Business Unit The eThekwini Business Unit serves the provinces of KwaZuluNatal and Mpumalanga, which encompass a mix of urban, periurban and rural areas. In KwaZulu-Natal, the majority of investments are made in the greater Durban and Pinetown hub, and cover a wide range of industries and sectors. It is envisaged that infrastructure development projects currently being undertaken by large corporations, the province and the national government in the region will continue to act as an important driver for entrepreneurs, as it has been doing in recent years. In particular, eThekwini foresees that many entrepreneurial opportunities will arise in relation to such projects as the Port of Durban expansion, preparations for the 2010 FIFA World Cup, and developments being planned by the major industries in Richards Bay. During the 2007 financial year, a sound economic climate in the province, as well as solid growth in such industries as tourism, ensured consistent investments. A total of 85 investments were approved in KwaZulu Natal, representing a value of R106 million. In Mpumalanga, industrial development in the greater Secunda area is paving the way for entrepreneurs to provide sub-contracting, products and services to larger companies. The province remains the main corridor from South Africa through to Mozambique, and the Nelspruit area, in particular, benefits from this. During the 2007 financial year, 45 investments to the value of R46 million were approved in the province. All indications are that, due to development activity in these two provinces, investment opportunities will remain high for the business unit and the specialist funds it manages throughout the next financial year. eThekwini manages three of Business Partners five specialist investment funds, the UYF Business Partners Franchise Fund, the Business Partners-Khula Start-Up Fund and the Property Investment Fund. The Franchise Fund was the first of the specialist funds to be launched in 2003, and is posting excellent results. It provides investment financing and added-value services to young black people aged between 18 and 35 who wish to buy or expand a franchise. The Business Partners-Khula Start-Up Fund, the second of the two joint venture funds managed by eThekwini, provides similar services for entrepreneurs of any profile who wish to start a business or expand a recently-launched one. iKapa Business Unit The iKapa Business Unit serves the Western Cape, Eastern Cape, the western half of the Northern Cape and the countrys marine fishing industry.
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Stratification of investments
Investment portfolio composition balances as at 31 March 2007 15,3% 18,1% 27,4% 39,2% R0 R500 000 R500 000 R1 000 000 R1 000 000 R2 000 000 more than R2 000 000
BUSINESS PARTNERS
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MANAGEMENT REVIEW
The unit is also responsible for the Tourism Fund, which services small and medium enterprises operating in the tourism industry throughout the country. iKapas investment activity is concentrated in the Cape Town, Port Elizabeth and East London metropolitan areas, and in the fishing industry. During the 2007 financial year, iKapa reported exceptional performance, processing 1 369 applications requesting R2,7 billion. Of these, 247 applications to the value of R328 million - were approved, and R256,4 million was paid out. In terms of empowerment, 30,8 percent of investments approved were for businesses owned and run by black entrepreneurs, while 42,5 percent were for businesses owned and run by women. The units total investment book grew by 31,9 percent to R485,9 million during the year, and, despite this rapid growth, it managed to maintain arrears at 1,58 percent. This excellent overall performance may be attributed to the generally favourable economic climate in the region, especially in the agricultural support, tourism, motor industry and manufacturing industries, as well as to the exceptional effort of the business units team members. During the year, a great deal of management time and effort was devoted to building the iKapa team, to integrating three previouslyseparate geographic units and to launching the Tourism Fund as part of the strategy to expand Business Partners investment footprint. The iKapa Business Unit is now well positioned to take advantage of the opportunities presented by infrastructural spend ahead of the upcoming 2010 FIFA World Cup, by the rising demand for consumer goods and products, and by the increase of foreign and domestic tourism in the region.
Facilitating real empowerment through equity participation
MANAGEMENT REVIEW
UYF Business Partners Franchise Fund The R125 million UYF Business Partners Franchise Fund is a public/private sector venture between Business Partners Limited and the Umsobomvu Youth Fund initiave of the national government. Umsobomvu Youth Fund contributed R100 million and Business Partners R25 million. Business Partners (eThekwini Business Unit) manages the fund. The first of the Business Partners specialist investment funds, it was launched in 2003 to provide business financing and support services for young entrepreneurs from previously disadvantaged communities, aged between 18 and 35 who wish to start or expand a franchise, or to buy an existing outlet. In the four years since its inception, the fund has concluded 169 deals to the value of R162 million. The fund provides investment solutions for franchised businesses across all industries and sectors, including travel and tourism, fast food, retailing and education, as well as for service stations. There is a strong focus on mentoring in the administration of the fund, with a mentor automatically being allocated to the client company as part of each investment deal. Business Partners-Khula Start-up Fund The Business Partners-Khula Start-Up Fund, a venture between Business Partners and Khula Enterprise Finance Limited, is aimed at enabling new entrepreneurs to establish new enterprises. The fund is capitalised at R150 million, with Khula as the primary investor in the fund, contributing R120 million of the R150 million committed capital. Business Partners, who performs the role of Fund Manager, contributes the balance of R30 million. The fund, which was launched in February 2006, is administered by eThekwini Business Unit. The fund aims at empowering new businesses being founded by either a first-time or an established entrepreneur, as well as businesses that wish to develop a new division, department or product line.
Specialist Investment Funds
A total of 39 investments have been made through this fund since its inception, with a total value of R18,5 million. The average investment value is R474 358, and individual investments do not usually exceed R3 million. A large percentage of the businesses invested in through this fund are owned and run by women. Property Investment Fund The recently-launched Property Investment Fund is the third of the three specialist funds administered by the eThekwini Business Unit. It aims to enable entrepreneurs either to build or acquire a multi-tenant investment property such as a regional or suburban shopping centre, an industrial park or, occasionally, an office park. As an investment partner, Business Partners is able to offer the entrepreneur a range of added-value services, including professional property management services. These services, contracted through Business Partners Property Management Service, ensure that the property is well-managed and maintained, and that rentals are timeously collected. A total of 10 projects were financed through this fund during the 2007 financial year, a typical example of which is an industrial park in Richards Bay that provides industrial premises for 35 small and medium enterprises. Business Partners also uses this fund as a vehicle to invest as sole owner in multi-tenanted properties to provide rentable units for entrepreneurial enterprises. R24 million was advanced for projects such as these during the financial year, with more approved deals scheduled to be advanced during the 2008 financial year. Properties are strategically selected to offer rental space where a definite need exists. Tourism Fund Realising the heightened levels of awareness of business opportunities in the tourism sector (including the 2010 Football
MANAGEMENT REVIEW
World Cup), as well as the industry knowledge, expertise and value-adding services required for successfully investing in tourism businesses, Business Partners launched its Tourism Fund in April 2006. This R200 million fund covers all aspects of tourism-related businesses including accommodation, tour operators, adventure tourism and the retailing of tourism products. The fund is wholly owned by Business Partners and is administered by the iKapa Business Unit. During its first year, the fund approved 12 investments amounting to R38,24 million from start-ups to wellestablished companies with investments ranging from R500 000 to R11 million. Apart from providing risk finance to SMEs in the tourism industry, Tourism Fund team members are involved in a number of forums and initiatives to develop the overall state of the tourism industry, as well as to increase the level of participation of previously disadvantaged people in this sector of the economy. Empowerment Fund The newly-launched Empowerment Fund, administered by the Egoli Business Unit, has had to face many challenges during its first year. Delays in the finalisation of the Broad-Based Black Economic Empowerment Codes of Good Practice (B-BBEE Codes) resulted in many white entrepreneurs delaying empowerment ventures in order to ensure compliance with the final codes. Now that the codes have been published, however, the fund has experienced a marked increase in investment applications. During the financial year, the fund approved four investments to the value of R10,4 million for management buy-outs and buy-ins. It is envisaged that many more investments of this kind will be made during the 2008 financial year now that the B-BBEE Codes have been finalised.
18 2007
Sectoral Review
Small and medium enterprise is one of the most important drivers of economic growth in South Africa, and employs approximately 54 percent of people in full-time employment in the private sector. Business Partners invests in entrepreneurs across all of the major economic sectors, with six accounting for the greatest portion of investment exposure. These are: Manufacturing Investments in this sector cover the full spectrum of products manufactured by small and medium enterprises, including automotive products, food and related products, wood and paper products, publishing and recording products, and general hardware, machinery and equipment. 107 new investments to the value of R142,8 million were approved for this sector during the 2006/2007 financial year. Travel and Tourism Travel and tourism is a growth industry across the world and, as such, is a key focus area for Business Partners. As a destination, South Africa offers both national and international tourists, a rare combination of exciting cosmopolitan cities, unspoilt natural areas and unusual eco-tourism destinations. 40 new investments to the value of R112 million were approved for this sector during the 2006/2007 financial year. Franchising and Retailing Franchising is also a world-wide growth sector. Business format franchising, in particular, is attracting more and more interest. This offers entrepreneurs not only the right to use the product, service and trademark of a franchise organisation, but also the right to use the entire business concept - a model that is changing the way the world does business.
BUSINESS PARTNERS
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Distribution of investment by sector

Investment portfolio composition as at 31 March 2007 27,7% 18,7% 11,7% 10,0% 8,9% 8,5% 3,9% 3,5% 7,1% Professional and personal services Manufacturing Motor trade Retailing Leisure Travel and Tourism Coastal fishing Building, plumbing and shopfitting Other
MANAGEMENT REVIEW
110 new investments to the value of R89,2 million were approved for the retailing sector during the 2006/2007 financial year. For franchising, which spans across a number of sectors, 122 new investments were approved to the value of R137,8 million. Leisure In the leisure industry, Business Partners invests in restaurants, fast food outlets and pubs, some of which are franchises. It also has some investments in leisure venues, such as caravan parks, home video outlets, games arcades, permanent markets, fairs and even pleasure resorts. 84 new investments to the value of R79,7 million were approved for this sector during the 2006/2007 financial year. Personal and Professional Services Personal and professional services are an important niche sector in the economy, especially as more and more professionals move into private practice. Entrepreneurs in this sector include auditors, tax consultants, business advisors, legal and consulting firms, property brokers and the provision of premises, as well as health care professionals such as doctors, dentists and psychologists. 154 new investments to the value of R244,3 million were approved for this sector during the 2006/2007 financial year. Marine Fishing The challenges facing entrepreneurs in marine fishing are unique and the risks high, requiring from Portfolio Managers a superior level of industry expertise. Knowledge of the legal and regulatory frameworks within which marine fishing entrepreneurs operate is essential and Business Partners, with its many years of experience, continues to operate very successfully in this area. 12 new investments to the value of R17,7 million were approved for this sector during the 2006/2007 financial year. Entrepreneurs are represented in all of the countrys demographic groups and the Business Partners investment portfolio reflects this diversity. In 2006/2007, 296 investments, representing 44,5 percent of the total investments made and amounting to R345,1 million in value, were approved for individuals from historicallydisadvantaged communities. In addition, 247 investments to the value of R281,3 million were approved for businesses owned and run by women, while young entrepreneurs benefited from 58 approved investments to the value of R53,6 million in the franchise industry.
2007
Demographic Review
Distribution of investment by sector

Investments advanced for the year ending 31 March 2007 30,5% Professional and personal services 18,7% Manufacturing 10,4% Motor trade 11,4% Retailing 7,6% Leisure 4,1% Travel and Tourism 2,8% Coastal fishing 7,2% Building, plumbing and shopfitting 7,3% Other
Financial Review
The equity and quasi-equity nature of the Business Partners investments are bearing fruit. Revenue in the form of income from associated companies and royalty fee income, increased by 52 and 26 percent respectively and amounted to R57,6 million (2006: R43,0 million). Furthermore, dividends and surpluses on the realisation of investments amounted to R31,8 million (2006: R24,3 million) an increase of 30,8 percent. The valuation of the unlisted investments is performed by applying the valuation principles as published by the South African Venture Capital Association. The increase in value of the investment portfolio is accounted for to the extent of the associated company income. The increase in Directors valuation of our investments from R114,1 million to R134,1 million represents an additional unrealised return not yet accounted for. The diversification of the Business Partners revenue stream has continued to gather momentum. Revenue generated by the property investments, consisting mainly of rental income, revaluation of properties and the fees earned from managing third party properties,
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BUSINESS PARTNERS
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MANAGEMENT REVIEW
2007
contributed 25,6 percent to total revenue and increased by 14,1 percent from R85,8 million in 2006 to R97,9 million in 2007. Additional revenue streams, consisting primarily of fees earned from the management of third party investment funds as well as due diligence fees, increased by 51,2 percent to R25,1 million (2006: R16,6 million). The total cost incurred in managing the Business Partners operations increased by 14,9 percent from R162,2 million in 2006 to R186,4 million in 2007. This increase in operational costs reflects primarily the increase in capacity required to pursue the Companys growth strategy. Net profit consequently increased by 23,3 percent from R130,4 million in 2006 to R160,8 million in the year under review, exceeding expectations for the year and resulting in a return on equity of 8,8 percent. Headline earnings per share increased by 21,7 percent to 95,4 cents per share.
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The concentration of risk in the investment portfolio is diversified by the portfolio being exposed to all thirteen major industry sectors, with the largest exposure (18,7 percent of the portfolio) to the manufacturing sector. 664 new investments were approved in the year under review, of which only 110 investments had approval amounts above R2 million. These investments represent 51,9 percent of the total value of investments approved for the year. At the end of the reporting period, 160 of the 2 037 investments in the portfolio had an exposure of more than R2 million, representing 39,2 percent of the value of the investment portfolio, effectively spreading the credit risk across a large number of investments. The investment portfolio is carried at fair value by impairing the carrying value of investments that present specific and objective evidence of an event that will result in the present value of the expected cash flows being less than the current carrying value. The impairment on specific investment portfolios is determined by analysing the historical loss experiences in similar portfolios and adjusting the loss to reflect differences in prevailing economic circumstances. In addition, the expected emergence periods for impairment indicators are adjusted to reflect current conditions. Bad debts written off during the year amounted to R31,0 million, a slight increase compared to the R27,3 million written off in 2005/2006. The bad debts written off in the current year amount to 2,4 percent (2006: 2,5 percent) of the average value of the investment portfolio. Net write-offs for the year (after considering bad debt recoveries) amounted to R9,1 million representing 0,7 percent of the value of the portfolio. Considering the overall risk profile of the Business Partners investments, this loss experience represents an exceptional achievement in risk management, and is the result of factors such
BUSINESS PARTNERS
Risk Review
The South African economy has continued to benefit from the sound macro-economic policies applied by the Government. Business confidence is high, and economic growth continues despite the increase in interest rates by 200 basis points over the past year. Small and medium enterprises are particularly vulnerable to economic instability and have consequently thrived in this positive and stable macro economic environment. The risk profile of the Business Partners investment portfolio, as measured by the exposure to non-performing and doubtful investments, has not been materially affected by the recent increase in interest rates. Investments at risk amount to 9,7 percent of the total portfolio at 31 March 2007 compared to 8,9 percent at 31 March 2006.
MANAGEMENT REVIEW
as improved due diligence, benign economic conditions, efficient credit control and effective post-investment management.
Business Partners International (Pty) Limited

In December 2004, the International Finance Corporation (IFC) and Business Partners Limited entered into a working relationship aimed at taking the Business Partners entrepreneurship model into Africa. In terms of the agreement, Business Partners International, a small and medium enterprise investment fund management company, was established with a support grant of US$2,5 million from the IFC. The primary objective of this wholly-owned Business Partners subsidiary was to undertake a pilot phase, establishing three risk capital funds with third party investors, one in Madagascar, one in Kenya and one in a third country to be agreed upon by the partners. These funds were to provide risk capital financing to local entrepreneurs, and were to be managed by local Fund Managers, trained and supported by Business Partners International. During 2007, this new business unit successfully established investment funds in Madagascar and Kenya, and is currently working on establishing the third fund. The Business Partners International Madagascar SME Fund is a US$10 million investment fund, supported by a further US$2 million Technical Assistance Fund. Active operations commenced in October 2006, and the fund has made six investments to date. The Business Partners International Kenya SME Fund is a US$14,1 million investment fund, supported by a US$2,5 million Technical Assistance Fund. The fund commenced active operations in late 2006 and has also made six investments in Kenyan companies to date.
Business Partners International Madagascar Business Partners International Madagascar Limited is a whollyowned subsidiary of Business Partners International (Pty) Limited. The Company is a socit anonyme incorporated in Madagascar, with social capital of MGA 2 000 000 divided into 100 shares of MGA 20 000 each. The company manages risk capital investment and technical assistance funds aimed at small and medium enterprises incorporated in Madagascar. Based in Antananarivo, it acts on behalf of its shareholders as the in-country fund manager for the Business Partners International Madagascar SME Fund. The funds aim is to deliver customised investment and addedvalue solutions to local entrepreneurs in a commercially-viable way, while also generating an acceptable rate of return for its investors. Recognising the power of women-owned businesses, it aims to have at least 30 percent of its portfolio made up of women-owned businesses. Business Partners International Kenya Business Partners International Kenya Limited is a wholly-owned subsidiary of Business Partners International (Pty) Limited. Based in Nairobi, like its counterpart in Madagascar, it acts on behalf of its shareholders as the in-country fund manager for the Business Partners International Kenya SME Fund. The US$14,1 million fund is used to invest in formal small and medium enterprises incorporated in Kenya. Its aim, like that of the Business Partners International Madagascar Fund, is to deliver financial and technical assistance to local entrepreneurs in a commercially-viable way, while generating an acceptable rate of return for its investors. It also aims to have at least 30 percent of its portfolio made up of women-owned businesses.
PROPERTY MANAGEMENT SERVICES

annual report BUSINESS PARTNERS 2007
Customised property broking and management solutions for all types of enterprise
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Business Partners Property Management Services provides property broking and management services tailored for small and medium enterprises. The division sources and secures appropriate business premises for entrepreneurial enterprises at market-related rentals or purchase prices. It also provides integrated property management for enterprises that have invested in property, either for own use or rental.
2007
Portfolio Management
Business Partners Property Management Services manages properties owned by the Company itself, as well as premises owned by third parties, including Khula Enterprise Finance Limited. Premises owned by either Business Partners or Khula may be sold to individual entrepreneurs from time to time, should they become available for sale. Current tenants are normally invited to submit offers to purchase before the properties are finally sold. The overall property management portfolio is broad-based, providing for the needs of a wide range of entrepreneurs, particularly in the retail and industrial sectors. Premises under management include individual retail sites, shopping centres, offices and industrial parks. Property portfolio management is one of the divisions core competencies and, in line with company strategy, is an important source of sustainable non-interest income. As at 31 March 2007, the property portfolios under management were made up of 243 individual properties, comprising 682 449m2 of lettable space and occupied by 3 477 tenants.
Sectoral breakdown of portfolio

For the year ended 31 March 2007 69,1% 4,7% 25,8% 0,4% Industrial Office Retail Other
2006/2007 Review
Business Partners Property Management Services experienced a satisfactory year, with vacancies at an all-time low. Third partyowned properties now also comprise a significant percentage of the portfolio. The division was also actively involved in a number of new projects related to both wholly-owned properties and co-investments with entrepreneurs.
Property Ownership, Investment and Sales

The demand for commercial and industrial premises has grown significantly during the past financial year, with vacancies at an alltime low. A significant increase in demand for industrial space in particular has been recorded, and Business Partners Property Management Services is gearing up to take advantage of this trend by developing some of the vacant land in its proprietary portfolio for industrial use. Some projects of this nature are already underway, such as the construction of an additional warehouse for an existing leaseholder in Silverton. Similarly, the construction of an industrial park in Nelspruit is set to commence soon, while a retail project is being
Sectoral classification of tenant businesses
43,8% Industrial 32,4% Retail 23,8% Service
Geographic Distribution and Penetration

The portfolios under management represent the full spectrum of commercial and specialised properties, and are situated in all of the major commercial centres in the country. There are currently 3 477 businesses from all sectors of the economy accommodated in premises either owned or managed
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BUSINESS PARTNERS
The services provided by Business Partners Property Management Services are an intrinsic aspect of the Business Partners customised, full-service offering for entrepreneurs.
by Business Partners Property Management Services, with the industrial sector being best represented.
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planned in Montana, Tswane. Vacant land is also available for development in Burgersfort, Polokwane and Retreat, as the need for industrial premises in these areas grows. In Port Elizabeth, a major upgrade to the Business Partners industrial park in North End has recently been completed, while renovations are underway at the Business Partners office blocks in Westville, Durban and Cape Towns CBD. In terms of rationalising the portfolio, eight properties that did not fit the overall strategic profile were sold and transferred during the year. A further 79 properties, including sectional title units, were sold and transferred on behalf of Khula. Both Business Partners and its clients have benefited from the positive performance of the property market during the past two years, and feel sure that both its property management and broking services will continue to exhibit growth during the 2008 financial year.
2007
and disinvestment purposes. This added-value service is strategically aligned to the Business Partners business and marketing strategy.
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Procurement Policy
Business Partners Limited and all of its divisions adhere to an empowerment procurement policy in all discretionary spending. The Company ensures that, wherever possible, the small and medium enterprise sector and, in particular, historicallydisadvantaged individuals, are involved in the supply of goods and services required. As far as possible, the company supports its own clients, adhering to sound business practice at all times. While recognising the need to support the small and medium enterprise sector and historicallydisadvantaged individuals, Business Partners is nevertheless aware of the fact that independent enterprises need to compete in the open market and, for this reason, suppliers are required to provide quality goods and services to deadline and at competitive prices. Each region and each division is set individual targets for empowerment procurement and, at the end of the 2007 financial year, Business Partners Property Management Services had exceeded its targets in all regions. The overall empowerment procurement target for the division was 70 percent, and the actual achieved was 63 percent.
BUSINESS PARTNERS
Management fees received

50,2% 37,8% 12,0% Business Partners R10,85m Khula R8,17m Other R2,59m
Consulting Services
Property-related consulting services are provided by both Business Partners Property Management Services and third parties contracted on its behalf. The aim of these services is primarily to determine the value and business viability of properties for both investment
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TECHNICAL ASSISTANCE, MENTORSHIP AND CONSULTING SERVICES
Professional support services to facilitate ongoing business success

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BUSINESS PARTNERS
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2007

Business Partners Technical Assistance, Mentorship and Consulting Services, a division of Business Partners Limited, offers professional business support services to both Business Partners clients and a wide range of other entrepreneurs and businesses. These services are a practical manifestation of the companys mission, which is to invest skill and knowledge, as well as capital, into the small and medium enterprise sector. The division also embodies the companys core value in that it aims, in a real way, to partner with its clients in their successes.
Objectives and Focus

The goal of this business unit is to provide professional technical assistance, mentorship and consulting services centred on a mutual exchange of information. Its principal objective is to offer specialist services to clients as needed, and to provide skills transfer and mentoring to facilitate ongoing business success. Since its re-launch in September 2000, Business Partners Technical Assistance, Mentorship and Consulting Services has successfully established a national network of professionals who are able to offer diverse added-value services to clients. The focus has been on attracting high-calibre, experienced mentors who are able to support entrepreneurs in maximising the profitability of their businesses, and in managing these through difficult challenges and growth phases. The Company therefore contracts professionals that not only have superior industry knowledge, but also the necessary skills and experience to assist entrepreneurial enterprises with their own unique needs. Mentors have been contracted from all of the major economic sectors, from manufacturing to mining, retailing, financial, legal, production and construction.
or the poor administration of financial activities. This is where technical assistance, mentorship and consulting have such an important role to play in entrepreneurial enterprise. Appropriate interventions and skills transfer can enable many more small and medium enterprises to be stable and successful. More than 50 percent of the mentors contracted by Business Partners Technical Assistance, Mentorship and Consulting Services have core competencies in general management, accounting and administration, and the demand for their services is high. The next highest demand is for industry-specific assistance, turnaround intervention and marketing.
2006/2007 Review
During the 2007 financial year, Business Partners Technical Assistance, Mentorship and Consulting Services focused on consolidating the growth of the previous three years. It concentrated in particular on improving the added-value of its service to clients, restructuring the role of the Mentor Coordinators as part of this. Ongoing quality management also received intensive attention, with the objective being to secure and develop relationships with existing mentors rather than to recruit new mentors. A process of re-evaluating the skills of registered mentors was also initiated in order to ensure that clients are able to avail themselves of the best skills, knowledge and experience at all times. New mentors were only contracted if there was a specific need for their skills
The Role of Technical Assistance, Mentorship and Consulting

Business statistics world-wide reveal that approximately 62 percent of business failure is as a direct result of under-skilled management
26

2007
amongst clients, and their backgrounds, knowledge and expertise was carefully evaluated as part of the registration process. The value of the service to both Business Partners and independent clients is growing demonstrably. There was an increase of six percent in the total number of assignments completed during the year, up to 699 from 658 during the previous year. External assignments, namely services to entrepreneurs who are not Business Partners investment clients, accounted for 42 percent of all assignments by value, up from 32 percent three years ago. This indicates a growing demand for professional services across the small and medium enterprise sector. Value to internal clients is ensured by cultivating managed relationships between the client, the operational team and the mentor. In both cases, the primary aim is to be pro-active in empowering a business or in troubleshooting problems, rather than being reactive when difficulties occur.
In addition, established relationships with Standard Bank and Nedbank continued to grow and develop. In terms of the agreement to provide professional services to the clients of these two banks, several assignments were concluded during the course of the year. The unit also provides mentorship and consulting services to clients of CEDA, a government agency in Botswana, as well as to the International Finance Corporation in Mozambique.
Stakeholders and Joint Ventures

658
In the first of these, the business unit is collaborating with North West University to develop a standard model that will identify problems in the operational activities of small and medium enterprises. This initiative also aims to formalise the quality of and standards for business mentors in the mentorship and consulting industry as a whole. The second of these, the Entrepreneur Development Programme, a joint initiative with the Gauteng Enterprise Propeller, the Umsobomvu Youth Fund and Sanlam Life Assurance, was finalised.
437
507
521
Business Partners Technical Assistance, Mentorship and Consulting Services has undertaken a number of new joint ventures during the financial year.
341
03
210
04
05
06
07
03
282
04
284
05
487
06
07
Number of mentors
Number of assignments completed

27
699
BUSINESS PARTNERS
A further initiative was the expansion of the units participation in the Succeed Campaign, an initiative of the Business Womens Association (BWA), facilitated through Deloittes Women Leadership Initiative. Business Partners Technical Assistance, Mentorship and Consulting Services is now involved is assessing the business skills and activities of all candidates applying for participation in the campaign.
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This programme aims to provide investment financing, training and mentorship for young entrepreneurs in particular and, in so doing, to reduce the barriers to entry into the entrepreneurial sector.
OPERATIONAL SUPPORT SERVICES

During the past year, there has been a change in focus at Business Partners as far as operational support services are concerned. Moving away from the principle that each business unit should provide its own support services, a new methodology has been adopted. This saw the centralisation of the management of all decentralised support staff situated in each of the business units.
In line with this, a Service Centre Model was developed for use throughout the Company. There are now four integrated support services centres situated in Johannesburg, Cape Town, Durban and Port Elizabeth, which are managed centrally to ensure consistency, efficiency and economies of scale. Each centres responsibilities are allocated depending on client needs in the region and on available capacity, neither of which are necessarily linked to the geographically-defined business units. The activities of the support services centres are focused mainly on streamlining deal implementation and improving risk management procedures. Deal implementation involves the advancement of investment financing as per the approved terms and conditions of a contract, while risk management involves the management of collections. The teams situated in the support services centres are lead by Legal Managers, who specialise in either the deal implementation or risk management aspects of the business. These teams are responsible for the advancing of deals, as well as the collection of non-performing, legal and bad debt deals, and also for the legal processes involved, if required. Consolidating support services independently of the business units has freed up the units to focus on deal-making, assured that the administration of each deal will be handled by a specialist team.
2006/2007 Review
In terms of financial management, advances during the year were up 32,5 percent on the previous year. The number of accounts in arrears and balances at risk increased slightly, due mainly to the changing risk profile of the Companys deals. The bad debt recovery target for the year was, however, exceeded.
Mobilising the full potential of both our brand and our people
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MARKETING
The focus of the Business Partners marketing and communications programme during the 2007 financial year continued to be on maintaining and improving brand awareness, as well as on strengthening client relationship management. With this in mind, target marketing was reviewed and refined, and client relationship management was similarly reviewed and improved.
Much attention was also given to improving the general understanding of the Companys products and services, mainly through managed media communications and the ongoing development of product and information leaflets. Media communications take the form of media releases, financial results releases, editorials and features in special supplements. Target media include national and local newspapers, as well as financial, trade and consumer publications. From a sales perspective, one of the primary objectives of Business Partners marketing activity is to increase the number of investment deals per annum, as well as the average deal size. The marketing divisions objectives for the year were met by using the full extent of the marketing mix. In support of increased brand awareness, media advertising continued in a range of targeted publications on a regular basis. Advertising was, in turn, supported by a range of direct communications, which remain the cornerstone of the Business Partners marketing programme. These include such elements as client newsletters, networking functions and relationship-building initiatives, which are conceptualised and developed at business unit level to meet the specific needs of clients in each region. In addition, client and intermediary loyalty programmes continue to be extended and improved, as a large proportion of the Companys business is derived from direct referrals. During the year, much attention was also given to improving client focus and to extending the client relationship management programme. This involved broadening the annual client satisfaction survey to include monthly follow-ups by marketing staff. The aim
of this initiative is mainly to identify client relationship management problems as early as possible, so that appropriate remedial action can be taken without delay. It also aims to give the Company constant insight into the changing needs of its client base. The client satisfaction survey and the programme of follow-up calls focus on service delivery, client satisfaction, overall perceptions of the Company and specific problem areas. Client protection methodologies were also improved, ensuring clients appropriate protection through the Companys ISO 9000:2001 processes, as well as the right to complain and to expect the appropriate resolution of complaints. Communications with existing and potential clients continues on an ongoing basis through the Business Partners web site, from which visitors can download important documents such as the annual report, interim results and information brochures. A free, comprehensive business plan template is also available, and specific industry-related information is provided as an added value for Business Partners clients. Implementation of marketing strategy and plans is done on a matrix management basis through professionals based at the Companys corporate offices in Parktown and at each of the business unit offices in Johannesburg, Cape Town and Durban. This enables the Companys marketing team to remain close to clients in each region, as well as to maintain a real understanding of the business and marketing issues in the local environment.
MARKETING
Marketing highlights of the year included the successful launch of Business Partners International Kenya in Nairobi, as well as excellent coverage in the print media and on TV.
Entrepreneur of the Year

The Entrepreneur of the Year Awards programme, a well-established component of client relationship management, continues with annual refinements. The programme focuses on celebrating entrepreneurial ability, and aims to ensure that individual entrepreneurs are recognised and celebrated in their own communities. The national award winner receives a cash prize, free business-related mentorship, and media coverage through Business Partners.
Stakeholder Engagement
Business Partners is an active member of the business community, and is a member of such professional and industry bodies as the Franchise Association of South Africa (FASA), the Businesswomens Association (BWA) and the Black Management Forum. It also participates in a number of joint ventures, most notably with Khula Enterprise Finance and the Umsobomvu Youth Fund.
2007/2008 Marketing Focus

In the upcoming financial year, the marketing division will continue to implement its strategy of raising brand awareness and of ensuring continual client satisfaction improvement. The focus will continue to be on strengthening Business Partners as a niche provider of integrated investment solutions for entrepreneurs. This will be done by means of planned and consistent brand and tactical advertising, media communications, direct marketing, client relationship management and special projects.
Investing skills and knowledge to enable independent business to thrive
HUMAN RESOURCES
The quality, added-value products and services that Business Partners is known for can only be delivered by people who are motivated, dedicated, specialised, professional and well-trained. The Companys staff complement, with its longstanding and in-depth knowledge of the entrepreneurial environment, of specialist sectors and industries, and of the factors that influence business viability, are an essential aspect of its competitive advantage. As such, careful attention is given firstly to recruiting the right person for each job and then to ensuring their long-term development and effectiveness.
People Management Philosophy

At Business Partners, people are our real business and this philosophy extends as much to our employees as to our clients. With this in mind, our human resources practices are designed to be flexible and to accommodate the needs of each individual employee. As importantly, they are designed to encourage an entrepreneurial approach to business, a sense of ownership in the companys various business units, superior client service, honesty, integrity and sound financial discipline. Our people management objective is to have the best people that are able to experience job satisfaction at individual level, the pride of working for a respected organisation and ongoing growth and development in the working environment.
This approach will continue to play a deciding role in helping the company to become even more professional in the challenging years to come. Business Partners is registered with the appropriate sectoral training authority, namely the SETA for Finance, Accounting, Management Consulting and other Financial Services (FASSET). During the 2006/2007 financial year 452 training sessions were provided within the company, amounting to 2 668 student sessions and 11 878 hours of training exposure, an average of 40 hours of training per employee.
Employment Equity
Since its inception, Business Partners has aspired to make equal employment opportunities available to all suitable candidates, regardless of race or gender. Similarly, it recognises the need for preferential programmes aimed at redressing historical inequalities. It also fosters a business environment in which diversity is viewed as a strength in competing for business. During the past financial year, Business Partners has complied with the provisions of the Employment Equity Act and will continue to do so. Details of this compliance are submitted in full in the companys annual employment equity report to the Department of Labour. The employee profile was summarised in the report on 27 September 2006 to the department, as following on the next page:
Training and Development

Skills development at all levels is a core objective for Business Partners, as is creating an enabling business culture. The company has a multi-level, multi-functional approach to training, and uses both packaged and custom-developed programmes for this purpose. Electronic communiqus and tasks are also sent out regularly to all employees by a dedicated training unit in order to raise awareness levels and improve competency levels, while training initiatives of all types are encouraged throughout the organisation.
HUMAN RESOURCES
2007
Workforce Profile
As at 27 September 2006 (numbers in brackets indicate the profile as at 31 August 2005)
Permanent Employees by Occupational Category Managers Professionals Technicians and Associate Professionals Clerks Elementary Occupations Sub Total Non-Permanent Employees Total 1 (2) 36 (29) 1 (0) 24 (23) 2 (2) 26 (17) 1 (1) 87 (89) 1 (0) 15 (14)
1
Staffing
As at 31 March 2007, 300 people were employed at Business Partners. The statistical breakdown is as follows: Employee Statistics
2007 Business Investments 61 (47) 1071 (96) 6 (6) 115 (121) 7 (6) 296 (276) Group/Divisional 0 (0) 27 (24) 0 (0) 24 (23) 0 (1) 62 (63) 6 (6) 302 (282) 43 48 Operational Employees Operational Support Employees Property Operational Employees Operational Support Employees 211 106 105 46 27 19 2006 200 93 107 48 29 19
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MALE African 6 (2) 14 (6) 0 (0) 13 (17) 2 (2) 35 (27) Coloured 4 (3) 8 (6) 0 (1) 9 (11) 2 (2) 23 (23) Indian 5 (3) 15 (8) 1 (0) 3 (4) 0 (0) 24 (15) White 38 (31) 39 (45) 1 (2) 7 (10) 1 (0) 86 (88) African 1 (0) 2 (3) 0 (0) 10 (9) 1 (2) 14 (14)
FEMALE Coloured 0 (0) 4 (3) 2 (2) 20 (19) 1 (0) 27 (24) Indian 2 (2) 3 (3) 0 (0) 19 (18) 0 (0) 24 (23) White 5 (6) 21 (22) 2 (1) 34 (33) 0 (0) 62 (62)
TOTAL
BUSINESS PARTNERS
Community Profile
2007 Black White Total 156 144 300 2006 141 155 296
One female foreign national included under total for professionals
Two Year Overview of Employee Statistics

2007 2006 296
Age Distribution of Employees at Year-end

2007 2131 3240 4150 5160 Over 60 Total
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2006 53 65 101 65 12 296
58 68 92 71 11 300
The companys transformation and evolutionary process is guided by policies and principles that: benefit existing employees, the company and employment candidates from previously-disadvantaged communities include a comprehensive advancement programme accept the companys responsibility for addressing any imbalances that may occur in the workplace ensure fairness in work practices, policies and facilities encourage the sharing of information improve competency levels as measured against competitive norms maintain merit as a guideline when considering promotion opportunities, salary and benefits structuring ensure the implementation of a human resources strategy in line with our core values of integrity, client service and economic merit
Total Number of Employees Staff Turnover Total Employees at Beginning of Year Add: Recruitments Sub Total Less: Resignations Total at Year-end Gender Profile Female Male Total
300
296 43 339 (39) 300
279 50 329 (33) 296
129 171 300
127 169 296
CORPORATE AND SHAREHOLDER INFORMATION
Committed to the highest levels of corporate governance and the creation of shareholder value
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BUSINESS PARTNERS
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2007
SHAREHOLDER INFORMATION
2007
DISTRIBUTION OF SHAREHOLDING 0 10 001 100 001 1 000 001 10 000 100 000 1 000 000 10 000 000
Number of holders 30 25 43 17 5 120
% of holders 25,0% 20,8% 35,8% 14,2% 4,2% 100,0%
Number of shares 88 825 648 899 10 337 906 60 620 453 107 138 511 178 834 594
% of shares 0,0% 0,4% 5,8% 33,9% 59,9% 100,0%
BUSINESS PARTNERS
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10 000 000 and above

Number of shareholders
11,7% Banks 45,0% Corporate bodies 0,8% Government 10,0% Insurance companies 32,5% Individuals
MAJOR SHAREHOLDERS
Number of shares 35 766 919 35 766 919 13 799 152 11 084 900 10 720 621 8 117 003 6 918 205 6 093 656 5 822 304 5 602 422 5 523 801 5 523 801 3 420 252 154 159 955
% of shares 20,0% 20,0% 7,7% 6,2% 6,0% 4,5% 3,9% 3,4% 3,3% 3,1% 3,1% 3,1% 1,9% 86,2%
Khula Enterprise Finance Limited Remgro Limited (Eikenlust (Pty) Limited) Sanlam Limited (CMB Nominees (Pty) Limited) Business Partners Employee Share Trust Billiton SA Limited ABSA Group Limited Nedcor Limited Firstrand Limited Old Mutual Life Assurance Co of SA Standard Bank Investment Corporation Limited Anglo Corporate Enterprises (Pty) Limited
Number of shares
17,9% Banks 49,7% Corporate bodies 20,0% Government 12,2% Insurance companies 0,2% Individuals
De Beers Holdings (Pty) Limited Standard Bank Nominees Tvl (Pty) Limited
Business Partners Limited shares can be traded by contacting the Company Secretary.
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CORPORATE GOVERNANCE
Business Partners is committed to being one of the most internationally respected, successful and profitable investors in small and medium enterprises. In order to achieve this, we are also committed to the highest level of corporate governance, and have a culture that values business and personal integrity, superior client service, transparency and accountability in all our business activities. We believe that there is a link between high-quality governance and the creation of shareholder value.
Compliance with Corporate Governance Standards

We use the following seven categories of good governance identified by the King Report II to measure whether we are operating in a sound corporate governed environment: Discipline Commitment by the organisations senior management, management and staff to widely-accepted standards of correct and proper behaviour. Transparency The ease with which an outsider can meaningfully analyse the organisations actions and performance. Independence The extent to which conflicts of interest are avoided, such that the organisations best interests prevail at all times. Accountability Addressing the shareholders rights to receive and, if necessary, query information relating to the stewardship of the organisations assets and its performance. Responsibility Acceptance of all consequences of the organisations behaviour and actions, including commitment to improvement where required.
Fairness Acknowledgement of, respect for and balance between the rights and interests of the organisations various stakeholders. Social Responsibility The organisations demonstrable commitment to ethical standards and its appreciation of the social, environmental and economic impact of its activities on the communities in which it operates.
Board of Directors
Role and Responsibilities The role of the Board is to represent the shareholders and to promote and protect the interests of the Company. The Board has delegated all authority to achieve the corporate objectives to the Managing Director, who is free to take all decisions and actions which, in his judgement, are reasonable within the limits imposed by the Board. The Managing Director remains accountable to the Board for the authority that is delegated to him and for the performance of the Company. The Board monitors the progress of the Company towards set goals through the decisions made by the Managing Director and through the performance of the Committees of the Board. The Board specifically reserves the following matters for its decision: appointment of the four Executive Directors approval of strategy and annual budgets determination of matters in accordance with the approvals framework
Membership The Board comprises of a non-executive chairman, a non-executive deputy chairman, a managing director, a deputy managing director, two executive directors, 10 non-executive directors and one alternate non-executive director. In terms of the Companys articles of association, shareholders or groups of shareholders may appoint one non-executive director for every 10 percent of issued share capital held in the Company. Up to six independent non-executive directors may be appointed by shareholders. The Managing Director is an executive director and his service contract does not exceed two years. The Deputy Managing Director and the two executive directors remain directors for as long as they hold an executive office in the Company, provided shareholders confirm their appointment as directors every three years. Skills, Knowledge and Experience The non-executive directors are from different business backgrounds, and their experience enables them to exercise independent judgement on the Board. They contribute to the Companys strategy formulation in addition to monitoring the Companys performance and its executive management. Meetings The Board meets five times a year. The roles of the Chairman and the Managing Director do not vest in the same person. Both the Chairman and the Managing Director provide leadership and guidance to the Companys Board, encourage proper deliberation of all matters requiring the Boards attention and obtain optimum input from the other directors. The Board and its committees are supplied with timely information to enable them to discharge their responsibilities effectively. All directors have access to the Company Secretary, as well as to independent professional advice at the Companys expense in appropriate circumstances.
2007
Committees of the Board of Directors

In line with best practice, sub-committees of the Board exist within written terms of reference, respectively defining their frequency of meetings, powers, duties and reporting obligations. Audit and Risk Committee The Audit and Risk Committee members are identified in the Company Information section of this report. The Audit and Risk Committee operates in accordance with an Audit and Risk Committee Charter, approved annually by the Board. The Audit and Risk Committee reviews whether: relevant, reliable and timely information is available to the Board to monitor the performance of the Company the annual report and accounts presented to the Board and to the external auditors have been prepared with the required care, diligence and skill the internal audit function is adequately staffed to reassure the Board and management that internal controls are suitable to the needs of the business, and that they are functioning satisfactorily all relevant information is made available to the external auditors to ensure that they are able to discharge their statutory responsibilities the Code of Corporate Practices and Conduct is complied with, external audit plans, findings, problems, reports and fees are reviewed and approved matters relating to financial and internal control, accounting policies, reporting and disclosure are fully discussed and implemented internal and external audit policies are properly formulated and implemented applicable legislation and the requirements of regulatory authorities are complied with The committee assesses its performance annually.
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National Investment Committee The National Investment Committee members are identified in the Company Information section of this report. The committee considers investments for approval, the sale of assets and property development projects beyond the delegated powers of executive management. Its mandate also includes the monitoring of performance on projects in which the Company has invested. Nominations Committee The Nominations Committee members are identified in the Company Information section of this report. The committee is authorised to consider and submit proposals regarding the optimum size of the Board, as well as its structure and composition. This is done with due regard to the skills and knowledge of the incumbent Board and the requirements of the Company. In addition, the requirements for and the functioning of the sub-committees of the Board are considered by this committee. The committee makes recommendations to the board on the appointment of trustees of the Company pension and retirement funds as well as the Company employee share trust. The committee is further authorised to review and submit recommendations to the board on directors fees. Personnel Committee The Personnel Committee members are identified in the Company Information section of this report. The committee is authorised to consider and submit recommendations to the Board on general staff policy, remuneration, directors remuneration, service contracts, the employee share incentive scheme and the Company pension and retirement funds. Regional Committees The Regional Committee members are identified in the Company Information section of this report. Regional committees assist the Board in monitoring corporate governance and compliance with the Companys strategy and policies in each business unit. Each
37
Transactions Committee The Transactions Committee considers all the Companys transactions in which directors, regional committee members or employees have any interests. In addition, executive directors directorships in other companies are considered by this committee, prior to acceptance by such directors. Full transparency to the Board on any transaction considered will ensure the required corporate governance. The committee members will always be disinterested parties and therefore the committee has no permanent members. Footprint Committee The Footprint Committee members are identified in the Company Information section of this report. The committee is authorised to consider the approval of the individual business plan for the new Womens Fund. B-BBEE Strategy Committee The members of the B-BBEE Strategy Committee are identified in the Company Information section of this report. The committee is authorised to develop a comprehensive broad-based black economic empowerment strategy for the Company, including for every element of the scorecard in terms of the B-BBEE Codes of Good Practice.
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committee takes an active interest in matters affecting Business Partners in the relevant region, contributes expertise in due diligence investigations when required, and assists in promoting the Company in the small and medium sector.
2007
Internal Audit
Business Partners has an Internal Audit division, which assists with the identification and control of the Companys business risks. The Audit and Risk Committee reviews the Internal Audit Charter and approves an annual audit plan. The role of the division includes the achievement of internal audit objectives, which are: assessment of the design and operating effectiveness of controls governing key operational processes and business risks independent assessment of the adequacy of the Companys internal operating and financial controls, systems and practices enterprise risk management
Code of Ethics
Business Partners has adopted a code of ethics that formalises a culture of the highest standards of integrity and uncompromising honesty. The principles to which each individual subscribes in accepting the code are: integrity incorruptibility good faith impartiality openness accountability New employees receive a copy of the Code of Ethics as part of their employment conditions. The code also forms an integral part of the induction programme.
Building small and medium enterprises through visionary investment partnership
BUSINESS PARTNERS SHAREHOLDERS
2007 FOOTPRINT COMMITTEE
When required
BOARD OF DIRECTORS
MEETING FREQUENCY
5 times per annum
SUBCOMMITTEE MEETING FREQUENCY
AUDIT AND RISK COMMITTEE

4 times per annum
PERSONNEL COMMITTEE
At least twice per annum
NOMINATIONS COMMITTEE
At least once per annum
TRANSACTIONS COMMITTEE
When required
REGIONAL COMMITTEES
Egoli, eThekwini, iKapa business units
B-BBEE STRATEGY COMMITTEE

When required
INVESTMENT SUBCOMMITTEE MEETING FREQUENCY
NATIONAL INVESTMENT COMMITTEE

2 meetings per month
4 times per annum
4 Non-executive Directors
Chairman of the Board or alternate: Deputy Chairman of the Board
Chairman of the Board or alternate: Deputy Chairman of the Board
Any 3 disinterested non-executive Directors
4 Non-executive members
2 Non-executive members Managing Director Equity and Loan financing above R4 million to R15 million COMPOSITION AND DELEGATED AUTHORITY 3 Non-executive members Managing Director Wholly-owned property investments with deemed equity portion above R15 million (equity portion is deemed to be 35% of total value of property)
COMPOSITION
Managing Director
Managing Director
Executive Director of the business unit
1 Chairman of Regional Commitee
1 Chairman of Regional Commitee
Managing Director
Managing Director
Managing Director
Managing Director 1 Other Executive Director
Managing Director 1 Other Executive Director
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ENTERPRISE RISK MANAGEMENT

Effective enterprise risk management is one of Business Partners management strategies. A properly designed risk management programme allows the company to take on investment risk without compromising security or growth. Options for management of exposure to loss include acceptance, avoidance, reduction, insurance transfer, and retention. The most effective treatment of risk usually involves more than one of these methods. Experienced coordination of the selected methods of treatment is essential to effect real change and to accurately monitor results.
The companys business activities involve the acceptance and management of a range of risks. Risks are uncertain future events that may influence the achievement of Business Partners strategic, operational and financial objectives. The management of these risks requires that they be identified and that appropriate procedures be put in place to mitigate against them. A risk-management framework has been developed and integrated into the day-to-day management of the company. The primary risks identified in this framework are: Environment Risks This is the risk of loss resulting from a change in the socio-economic environment in which the company operates. It is controlled through the continuous monitoring of the environment and by reacting to any significant changes immediately in order to minimise identified risks. Credit Risks This risk arises from the potential inability of clients to meet their financial obligations. The assessment of this risk during the due diligence phase, and in-depth knowledge of the sector in which each business operates, are the primary methodologies in place to minimise this risk. Business Continuity Risks The risk that the Company will, for any reason, not be able to continue its operations in the foreseeable future is defined as
a business continuity risk. Business Partners minimises this risk by closely monitoring both internal and external factors that might pose a threat to business continuity. Human Resources Risks The specific nature of the companys activities necessitates specialised knowledge in certain areas. In order to ensure that Business Partners has an adequate knowledge base at all times, the company invests significantly in continuous training programmes, undertakes succession planning for key personnel, and is committed to good remuneration practices. Operational and Financial Risks Operational risk lies in potential management failures, inadequate internal systems and controls, fraud and human error, all of which may cause losses. These risks are managed by means of an appropriate organisational culture and value system, a comprehensive system of internal controls, contingency planning and internal audit procedures. Risk arising as a result of the inaccurate functioning or failure of the financial systems or failure of the appropriate controls in these systems is classified as a financial risk. Internal and external systems reviews, a pro-active segmentation of duties in key areas and extensive management procedures and controls are some of the measures in place to ensure that this risk does not manifest and result in losses for the Company.
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ENTERPRISE RISK MANAGEMENT

Legal Risks Legal risk arises from the potential inability to enforce, through legal and judicial processes, the obligations of the Companys clients and counterparts. Business Partners minimises such uncertainty through continuous consultation with internal and external legal advisors and by means of the proper structuring of transactions. The Company has established best-practice legal standards and procedures, which have been designed to ensure compliance with all applicable statutory and regulatory requirements. Quality Management Business Partners has adopted a policy of total quality management, conforming to the ISO 9001:2000 standard for quality management systems. Continuous evaluation and improvement of quality management practices and the wide communication of control procedures are an integral part of the companys overall risk management philosophy.
Effective management of risk through total quality management
ENVIRONMENTAL AND SOCIAL MANAGEMENT

Sustained socio-economic prosperity depends on human welfare and a healthy environment. Business Partners is committed to sustainable wealth creation through investment in viable entrepreneurial enterprises that operate in an environmentally and socially sound way.
2007 annual report
Environmental Legislation
The Company is therefore compliant with the countrys environmental legislation and subscribes to an internal environmental policy. This commits Business Partners to practices that do not pollute the natural and social environment, and this commitment is constantly monitored and evaluated. As part of the due diligence procedure, all potential clients are evaluated in terms of their compliance with internationally-accepted environmental management standards. Business Partners will not invest in companies that do not respect the local and global environment, no matter how lucrative the potential investment may be. The Company also reserves the right, in terms of its investment agreements, to call in the investment facility should a client company be found to be in breach of environmentally-sound practices. As far as possible, clients are encouraged to comply with the environmental practices and procedures as outlined in the ISO 14001 certification procedure. In addition, Business Partners will not let out premises to any tenant or business whose practices and/or procedures are harmful to the environment. Existing tenants whose practices are found to be harmful to the environment will be given a written warning, and they will be evicted if they do not respond to the warning. Finally, Business Partners will under no circumstances consider investing in any businesses involved in covert, environmentally harmful or illegal activities, such as Category A projects or any activities suspected of being associated with money laundering.
Corporate Social Investment

Business Partners is cognisant of the fact that a company is not an island, that every successful business is part of a broader socioeconomic community. The Companys corporate social investment programme acknowledges this and is focused on empowering small and medium enterprises and the communities in which they operate. Adopt-a-Guesthouse The Adopt-a-Guesthouse programme was initiated by the Southern Sun Hotel Group to assist emerging bed and breakfast establishments in Soweto. Given the range of needs that these establishments have, the group approached a number of different stakeholders in the tourism industry to participate in the programme and to provide input in their areas of expertise. As the most experienced financial institution servicing the small and medium enterprise sector, Business Partners became involved to assist with financial and financial management information. The Tourism Fund has undertaken to sit on the programmes advisory panel, to assist with site visits and to provide training workshops in business planning. Business Partners considers its participation in this initiative as part of its social responsibility, but also as an opportunity to extend its client base to establishments that may require its products and services. Twenty-three bed and breakfast establishments run by black women in various townships and suburbs currently participate in the Adopt-a-Guesthouse programme. It assists them to identify
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BUSINESS PARTNERS
ENVIRONMENTAL AND SOCIAL MANAGEMENT

knowledge and skills gaps, and provides training and support in such areas as service excellence, business skills and financial management. It also provides business opportunities, access to various marketing channels and assistance in preparing an establishment for grading. In order for establishments to qualify for participation in the programme, they must be registered businesses, have the potential to qualify for grading within 12 months, have a turnover of less that R1 million per annum, and have been in business for more than a year, but for less than five years. Some of the other stakeholders in the programme that are also contributing resources are: The Tourism Enterprise Programme (TEP) Johannesburg Tourism Company Bairds Renaissance Strategy Consultants FEDHASA Bid Travel Gauteng Tourism Authority Nedbank Tourism Grading Council Simmons SA This pilot programme is expected to run for a period of between six months and a year and, if successful, may be rolled out to other parts of the country. Succeed Campaign, in Association with the Businesswomens Association and Deloitte Business Partners has also recently become a partner in the Succeed Campaign, an initiative of the Business Womens Association (BWA) and Deloitte. Female entrepreneurs who have been in business for less than five years, and who have a turnover of less than R5 million, are able to participate in the programme. Selected entrepreneurs will be partnered with advisors from Deloitte, who will provide assistance in improving their business in a number of different areas. As these advisors are from a consulting background, however, Deloitte approached Business Partners to provide the input of the companys mentors, who have broader backgrounds, extensive practical business experience and specialist knowledge of the small and medium enterprise environment. These mentors will provide advice on business improvement to the programmes participants, offering mentorship rather than the technical assistance provided by Deloitte. The mentor, the advisory team and the entrepreneur will work together in developing customised solutions for each participating business. All mentorship and advisory services will be provided pro bono. The aim of the Succeed Campaign is to assist individual entrepreneurs with business development in order to attain sustainable profitability. Schools and Universities Business Partners holds a number of practical workshops at high schools, university campuses and business schools throughout the country every year. These are aimed at promoting entrepreneurship and at helping participants to assess the possibility of starting a small or medium enterprise. Competitions Promoting Entrepreneurship The Company is also involved in judging and sponsoring a number of competitions that promote entrepreneurship. These include the Enterprise of the Year competition, which is run in association with Rapport, Old Mutual and AHI, and the Workshop for Black Business Development, which was held in March 2006 to promote understanding of tenders and contracts.
BROAD-BASED BLACK ECONOMIC EMPOWERMENT

Business Partners has, for a number of years, been recording, monitoring and measuring its broad-based black economic empowerment (B-BBEE) performance as an integral part of its mission to investment in and develop small and medium enterprises in South Africa.
This commitment was further entrenched when, at a meeting in September 2006, the Board of Directors appointed a new subcommittee, the Black Economic Empowerment Strategy Committee. This was formed in order to ensure that Business Partners complies with the letter and spirit of the countrys B-BBEE legislation and the Broad-Based Black Economic Empowerment Codes of Good Practice (B-BBEE Codes), which were being developed by the Department of Trade and Industry (dti) at the time. On 9 February 2007, the Minister of Trade and Industry gazetted the final B-BBEE Codes, as well as the Financial Sector Charter (FSC), in accordance with the Broad-Based Black Economic Empowerment Act of 2003. As Business Partners core business is the provision of customised financial and added-value solutions for small and medium enterprises, the Black Economic Empowerment Strategy Committee resolved that the companys B-BBEE credentials should be measured in line with the gazetted FSC. Business Partners has since been independently certified by Exceed Verification Agency as being 71,48 percent compliant with the FSC, the second highest level of certification available.
Ensuring long-term development for each employee
VALUE ADDED STATEMENT

2007 R000 VALUE ADDED Interest received, rent charged and other income Less: paid to suppliers Total wealth created Distributed as follows: EMPLOYEES Salaries, wages and contributions GOVERNMENT Normal taxation Employee taxes Skills development levies Regional services levies Value added tax SHAREHOLDERS Shareholders for dividend RETENTIONS TO SUPPORT FUTURE OPERATIONS Depreciation Income retained 72 000 72 000 87 377 47 083 29 099 982 260 9 953 28 987 28 987 133 326 1 492 131 834 321 690 22,4% 22,4% 27,1% 14,6% 9,0% 0,3% 0,1% 3,1% 9,0% 9,0% 41,5% 0,5% 41,0% 100,0% 62 003 62 003 76 221 45 224 20 217 680 714 9 386 25 766 25 766 106 498 1 866 104 632 270 488 22,9% 22,9% 28,3% 16,7% 7,5% 0,3% 0,3% 3,5% 9,5% 9,5% 39,3% 0,7% 38,6% 100,0% 423 603 (101 913) 321 690 100,0% 353 117 (82 629) 270 488 100,0% % 2006 R000 %
2007
2007
22,4% Employees 27,1% Government 9,0% Shareholders 41,5% Future Operations
2006
22,9% Employees 28,3% Government 9,5% Shareholders 39,3% Future Operations
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BUSINESS PARTNERS
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FINANCIAL STATEMENTS
2007 FINANCIAL STATEMENTS BUSINESS PARTNERS annual report
Partnering for consistent business success
46
STATEMENT OF RESPONSIBILITY BY THE BOARD OF DIRECTORS

The Directors are responsible for the preparation, integrity and fair presentation of the financial statements of Business Partners Limited and its subsidiaries. The financial statements, presented on pages 49 to 82, have been prepared in accordance with South African Statements of Generally Accepted Accounting Practice, and include amounts based on judgements and estimates made by management. The Directors reviewed the information included in the Annual Report and are responsible for both the accuracy and consistency of the financial statements. The going concern basis has been adopted in preparing the financial statements. The Directors have no reason to believe that the Company or the Group will not be going concerns in the foreseeable future, based on forecasts and available cash resources. The viability of the Company and of the Group is supported by the financial statements. The financial statements have been audited by the independent accounting and auditing firm, PricewaterhouseCoopers Incorporated, which was given unrestricted
annual report 47 FINANCIAL STATEMENTS BUSINESS PARTNERS
access to all financial records and related data, including minutes of all meetings of shareholders, the Board of Directors, committees of the Board and management. The Directors believe that all representations made to the independent auditors during their audit were valid and appropriate. The audit report of PricewaterhouseCoopers Incorporated is presented below. The financial statements were approved by the Board of Directors on 17 May 2007 and are signed on its behalf.
T. van Wyk Deputy Chairman
J. Schwenke Managing Director
2007
INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF BUSINESS PARTNERS LIMITED

We have audited the annual financial statements and group annual financial statements of Business Partners Limited and its subsidiaries, which comprise the directors report, the balance sheet and the consolidated balance sheet as at 31 March 2007, the income statement and the consolidated income statement, the statement of recognised income and expense and the consolidated statement of recognised income and expense, the statement of changes in equity and the consolidated statement of changes in equity, the cash flow statement and the consolidated cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 49 to 82. Directors responsibility for the financial statements The company's directors are responsible for the preparation and fair presentation of these financial statements in accordance with South African Statements of Generally Accepted Accounting Practice, and in the manner required by the Companies Act of South Africa. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor's responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk PricewaterhouseCoopers Inc. Director: JH Cloete Registered Auditor Johannesburg 1 June 2007 assessments, the auditor considers internal control relevant to the entitys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of the company and of the group as of 31 March 2007, and of their financial performance and their cash flows for the year then ended in accordance with South African Statements of Generally Accepted Accounting Practice, and in the manner required by the Companies Act of South Africa.
2007 48 FINANCIAL STATEMENTS BUSINESS PARTNERS annual report
DIRECTORS REPORT
for the year ended 31 March 2007
1. Nature of the business
The Company is principally engaged in investing capital, knowledge and skill into viable small and medium sized businesses.
4. Events subsequent to the balance sheet date

No material changes in circumstances occurred between the end of the financial year and the date of this report.
2. Business activities
During the period under review 664 (2006: 633) investment projects amounting to R876,6 million (2006: R740,0 million) were approved for investment at an average investment amount of R1 320 000 (2006: R1 169 000). Business Partners follows a risk based investment approach by structuring the majority (70,3 percent (2006: 73,1 percent)) of its investments with equity and royalty based instruments. An equity stake was obtained in 156 projects (2006: 134 projects) at an average investment amount of R2,1 million (2006: R2,1 million). Business Partners manages a portfolio of industrial and commercial properties with a lettable area totalling more than 682 000 m2 (2006: 675 000 m2), providing business premises to more than 3 475 (2006: 3 450) tenants. Additional information on the business activities of the Company is available in the Management Review section of the Annual Report.
5. Share capital and reserves

The authorised share capital remained unchanged at 400 million ordinary shares of R1 each. The issued share capital remained unchanged at 178,8 million shares of R1 each.
6. Dividend
Dividend cover for the year equals 5,0 times. The dividend policy objective is to ensure at least a four times cover for the dividend. A cash dividend of 20 cents per share in respect of the 2007 financial year (2006: 18 cents) was declared on 17 May 2007, payable on or about 10 August 2007 to all shareholders registered in the share register at the close of business on 25 July 2007.
7. Earnings per share

Earnings per share increased to 99,5 cents (2006: 81,0 cents) based on 161,6 million weighted number of shares in issue. Diluted earnings per share increased to 91,0 cents (2006: 74,2 cents). Headline earnings per share increased to 95,4 cents (2006: 78,4 cents). Diluted headline earnings per share increased to 87,3 cents (2006: 71,9 cents). For more information refer to notes 12 and 24 in the financial statements.
3. Operational and financial review

The Company's net profit amounted to R160,8 million, (2006 restated: R130,4 million), an increase of R30,4 million compared to the previous year. The increase in net profit of 23,3 percent is the result of additional revenues yielded by the investment portfolio, the fair value adjustment to the investment properties and an increase in the equity accounted earnings from associated companies which benefited from the buoyant South African economy. The financial position and the results of the various operations are fully disclosed in the financial statements on pages 49 to 82. The business investment portfolio is continually analysed in terms of a range of risk management and control measures, ensuring that risks are identified and adequately provided for. During the period under review, bad debts amounting to R32,6 million (2006: R29,1 million) were written off. The recovery of bad debts written off amounted to R22,4 million (2006: R19,3 million).
8. Directors remuneration and interest

Details of the Directors remuneration are set out in note 29 to the financial statements. No material contracts in which the Directors have any interest were entered into in the current year.
9. Major shareholders
Shareholders holding beneficially, directly or indirectly, in excess of 5 percent of the issued share capital of the Company are detailed on page 34 of the annual report.
DIRECTORS REPORT
10. Directors
2007
12. Acknowledgements
Sincere appreciation is extended to all our shareholders, members of the Board and its committees for their dedicated and positive participation throughout the year. To the entire staff of Business Partners, we express our gratitude for their loyalty, commitment and hard work in achieving the objectives of the Company.
10.1 The Directors of the Company on the 31st of March 2007 were: Directors appointed in terms of Article 13.4 of the Articles of Association: Mr JP Rupert Dr ZZR Rustomjee Mr PM Baum Mr XGS Sithole Mr F Meisenholl Mr T van Wyk Directors appointed in terms of Article 17.1 of the Articles of Association: Mr SST Ngcobo Alternate to Mr DR Geeringh Directors appointed in terms of Article 13.2 of the Articles of Association: Mr DR Geeringh Mr DM Moshapalo Dr P Huysamer Dr MA Ramphele Dr E Links Dr JG Smith Directors appointed in terms of Article 15 of the Articles of Association: Mr J Schwenke (Managing Director) Mr N Martin (Deputy Managing Director) Mr C Botes (Executive Director) Mr G van Biljon (Executive Director) 10.2 During the year the following changes occurred in the composition of the Board of Directors: Director Mr DR Geeringh Event Ceased to hold office as a shareholder could no longer appoint the director in terms of Article 13.8 Re-appointed Terms Date
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T. van Wyk Deputy Chairman 17 May 2007
J. Schwenke Managing Director
CERTIFICATE BY THE COMPANY SECRETARY

In terms of Section 268G(d) of the Companies Act 61 of 1973, as amended, I hereby certify that the Company has, in respect of the financial year under review, lodged with the Registrar of Companies all returns required of the Company in terms of the Act, and that all such returns are true, correct and up to date.
Mr DR Geeringh
Article 13.4 Article 13.2
27 February 2007 27 February 2007 Ms C M Gerbrands Company Secretary 17 May 2007
11. Auditors
PricewaterhouseCoopers Incorporated will continue in office in accordance with Section 270(2) of the Companies Act.
50
BALANCE SHEET
as at 31 March 2007
Notes ASSETS Non-current assets Investment properties Business investments Investments in associates Property and equipment Investments in subsidiaries Defined benefit pension fund surplus Deferred tax asset Current assets Inventories and assets held for resale Short-term portion of business investments Accounts receivable Deposits and bank balances Total assets 9 4 10 3 4 5 6 7 15 8 2007 R000 1 557 633 267 760 1 122 658 37 978 16 369 112 868 538 620 3 518 242 439 12 048 280 615 2 096 253
GROUP
2006 R000 1 228 741 224 474 938 900 25 770 16 132 23 465 601 598 6 331 199 447 8 973 386 847 1 830 339
COMPANY
2007 R000 1 511 857 235 080 1 124 674 1 877 2 535 34 823 112 868 525 951 3 518 241 780 6 940 273 713 2 037 808 2006 R000
1 211 571 202 287 937 104 1 894 2 345 45 789 22 152 597 852 6 331 199 026 8 425 384 070 1 809 423
EQUITY AND LIABILITIES Capital and reserves Share capital Treasury shares Fair value and other reserves Retained earnings Non-current liabilities Borrowings Post-retirement medical aid obligation Deferred tax liability Current liabilities Accounts payable Provisions Current tax liability Shareholders for dividend Total liabilities Total equity and liabilities 16 14 15 8 12 12 13
1 942 977 178 835 (29 033) 80 770 1 712 405 56 885 289 43 983 12 613 96 391 31 213 37 260 27 893 25 153 276 2 096 253
1 714 395 178 835 (46 626) 1 615 1 580 571 40 910 599 40 311 75 034 24 613 33 592 16 713 116 115 944 1 830 339
1 891 532 178 835 80 856 1 631 841 60 044 289 43 983 15 772 86 232 23 344 36 605 26 258 25 146 276 2 037 808
1 697 453 178 835 1 615 1 517 003 40 910 599 40 311 71 060 20 832 33 592 16 520 116 111 970 1 809 423
INCOME STATEMENT
GROUP
2007 R000 300 239 81 754 (186 360) 195 633 (276) 19 255 214 612 (53 791) 160 821 2006 R000 263 802 57 317 (162 186) 158 933 (55) 12 651 171 529 (41 131) 130 398
COMPANY
2007 R000 293 020 83 441 (178 576) 197 885 (76) 197 809 (50 781) 147 028 2006 R000 261 723 51 564 (159 281) 154 006 (52) 153 954 (34 843) 119 111
Notes
2007
annual report
Revenue Other operating income Operating expenses Profit from operations Finance cost Income from associated companies Profit before taxation Tax expense Net profit
18 19 20 21
BUSINESS PARTNERS
23
STATEMENT OF RECOGNISED INCOME AND EXPENSE

Actuarial gain / (loss) on post-retirement benefits Initial recognition of pension fund surplus Gain / (loss) on available for sale instruments Foreign currency translation gains / (losses) Deferred taxation on items above
2007 R000 (1 050) 112 868 (210) (86) (32 367) 79 155 160 821 239 976
2006 R000 1 675 229 (552) 1 352 130 398 131 750
2007 R000 (1 050) 112 868 (210) (32 367) 79 241 147 028 226 269
2006 R000 1 675 229 (552) 1 352 119 111 120 463
Net income / (expense) recognised directly in equity Profit for the year Total recognised income for the year
52
STATEMENT OF CHANGES IN EQUITY

SHARE CAPITAL FAIR VALUE AND OTHER RESERVES RETAINED EARNINGS TOTAL
CHANGES IN EQUITY GROUP Balance at 1 April 2005 Change in accounting policy Retained earnings / (loss) of subsidiary sold Fair value adjustments of available for sale instruments Actuarial gains / (losses) Net profit Dividend Balance at 31 March 2006 Balance at 1 April 2006 Share options taken up Fair value adjustments of available for sale instruments Actuarial gains / (losses) on employee benefits Initial recognition of pension fund surplus Foreign currency translation gains / (losses) Net profit Dividend Balance at 31 March 2007 132 209 13 25 132 209 132 209 17 593 13 1 615 1 615 (149) (746) 80 136 (86) 160 821 (28 987) 149 802 80 770 1 712 405 263 162 1 190 130 398 (25 766) 1 580 571 1 580 571 1 473 239 2 690 10 1 605 711 2 690 10 162 1 190 130 398 (25 766) 1 714 395 1 714 395 17 593 (149) (746) 80 136 (86) 160 821 (28 987) 1 942 977
25
CHANGES IN EQUITY COMPANY Balance at 1 April 2005 Change in accounting policy Fair value adjustments of available for sale instruments Actuarial gains / (losses) Net profit Dividend Balance at 31 March 2006 Balance at 1 April 2006 Fair value adjustments of available for sale instruments Actuarial gains / (losses) on employee benefits Initial recognition of pension fund surplus Net profit Dividend Balance at 31 March 2007 13 178 835 13 25 178 835 178 835 1 615 1 615 (149) (746) 80 136 263 162 1 190 119 111 (28 614) 1 517 003 1 517 003 1 423 816 2 690 1 602 914 2 690 162 1 190 119 111 (28 614) 1 697 453
FINANCIAL STATEMENTS 53
25 178 835 80 856
147 028 (32 190) 1 631 841
1 697 453 (149) (746) 80 136 147 028 (32 190) 1 891 532
BUSINESS PARTNERS
annual report
2007
Notes
R000
R000
R000
R000
CASH FLOW STATEMENT

GROUP
2007 R000 343 000 (165 044) 28.1 28.2 28.3 177 956 (276) (35 903) (29 078) 112 699 2006 R000 291 803 (150 821) 140 982 (55) (37 887) (25 794) 77 246
COMPANY
2007 R000 330 694 (157 061) 173 633 (76) (35 486) (32 281) 105 790 2006 R000 284 906 (149 065) 135 841 (52) (37 638) (28 641) 69 510
Notes
2007
annual report
Cash flow from operating activities Cash received from clients Cash paid to suppliers and employees Cash generated from operating activities Finance cost Taxation paid Dividends paid Net cash generated from operating activities Cash flow from investing activities Capital expenditure on investment properties property and equipment Proceeds from the sale of investment properties property and equipment Business investments advanced Business investments repaid Investment in subsidiaries Proceeds from sale of other investments Dividends received from other investments Net cash utilised in investing activities Cash flow from financing activities Long-term borrowings Net cash utilised in financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of year Cash and cash equivalents at the end of year
BUSINESS PARTNERS
(24 387) (1 568) 10 928 216 (629 185) 395 449 25 123 4 493 (218 931) (106 232) 386 847 280 615
(10 760) (1 669) 15 055 174 (496 148) 315 956 12 831 12 707 (151 854) (8 200) (8 200) (82 808) 469 655 386 847
(13 397) (1 495) 8 028 216 (628 849) 380 394 10 966 25 123 2 867 (216 147) (110 357) 384 070 273 713
(10 439) (1 669) 10 555 174 (496 148) 314 818 9 223 12 831 14 883 (145 772) (8 200) (8 200) (84 462) 468 532 384 070
54
NOTES TO THE FINANCIAL STATEMENTS

1. Summary of accounting policies
The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below and are consistent with those of the previous year, except for the application of a different treatment of actuarial gains and losses as allowed by the restatement on IAS 19 (AC 116) Employee Benefits as set out in note 2. 1.1 Basis of preparation The consolidated financial statements are prepared in accordance with and comply with South African Statements of Generally Accepted Accounting Practice. The consolidated financial statements are prepared under the historical cost convention, as amended by the fair value of investment properties and financial instruments. The preparation of financial statements in conformity with South African Statements of Generally Accepted Accounting Practice, requires the use of estimates and assumptions based on management's best knowledge of current events and actions. These estimates and assumptions affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results may ultimately differ from these estimates. 1.2 1.2.1 Group accounting Subsidiaries Subsidiary undertakings, which are those companies and other entities in which the Company, directly or indirectly, has an interest of more than one half of the voting rights, or otherwise has power to govern the operations, are consolidated. Subsidiaries are consolidated from the date on which effective control is transferred to the Company and are no longer consolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of assets given up, shares issued or liabilities undertaken at the date of acquisition plus costs directly attributable to the acquisition. The excess of the cost of acquisition over the fair value of the net assets of the subsidiary acquired, is recorded as goodwill. All intercompany transactions, balances and unrealised surpluses and deficits on transactions between group companies have been eliminated. Where necessary, accounting policies in subsidiaries have been changed to ensure consistency with the policies adopted by the Group. 1.2.2 Investments in associates Investments in associates are accounted for by the equity method of accounting. Under this method the Companys share of the post-acquisition profits or losses of associates is recognised in the income statement and its share of post-acquistion reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the cost of the investment. Associates are entities over which the Company generally has between 20 percent and 50 percent of the voting rights, or over which the Company has significant influence, but which it does not control. Impairments are recorded for long-term diminutions in value. Unrealised gains on transactions between the Company and its associates are eliminated to the extent of the Groups interest in the associates; unrealised losses are also eliminated, unless the transaction provides evidence of an impairment of the asset transferred. When the Companys share of losses in an associate equals or exceeds its interest in the associate, the Company does not further recognise losses, unless the Company has incurred obligations or made payments on behalf of the associates. Audited financial statements are utilised to determine the share of the associated company earnings. Where these are not available, management estimates are not included in the equity accounted earnings. 1.2.3 Joint ventures A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. The Company's interest in a jointly-controlled entity is accounted for by proportionate consolidation. The Company combines its share of the joint venture's individual income and expenses, assets and liabilities and cash flows on a line-by-line basis with similar items in the Company's financial statements. As with subsidiaries, joint ventures are excluded from consolidation if the interest is intended to be temporary or if the joint venture operates under severe long-term restrictions. Where required, accounting policies in joint ventures have been changed to ensure consistency with the policies adopted by the Group. 1.3 1.3.1 Foreign currencies Functional and presentation currency The consolidated financial statements are presented in South African Rands, which is the Company's functional currency and the Groups presentation currency.
BUSINESS PARTNERS
annual report
2007

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the "functional" currency). 1.3.2 Foreign currency translations The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows: The assets and liabilities of foreign subsidiary companies are translated at the closing exchange rates ruling at year-end. Income statement items in respect of foreign entities are translated at the appropriate weighted average exchange rate for the year where they approximate actual rates. Gains and losses arising on translation are transferred to fair value and other reserves (foreign currency translation reserve). On consolidation, exchange differences arising on the translation of the net investment in foreign entities and of borrowings, are taken to shareholders equity. 1.4 Financial instruments Financial instruments carried on the balance sheet include loans and receivables, listed shares, bonds, cash and bank balances, money market assets and accounts payable. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item. The Company classifies its financial instruments primarily into the following categories: loans and receivables and available for sale instruments. The classification of investments are done in consultation with the Audit and Risk Committee. 1.6 Investments intended to be held for an indefinite period of time, which may be sold in response to market opportunities, are classified as available for sale. The fair value of these investments is based on quoted bid prices. Unrealised gains and losses, arising from changes in fair value of investments classified as available for sale, are recognised in equity. When investments classified as available for sale are sold or impaired, the accumulated fair value adjustments are included in the income statement as gains and losses. Loans and receivables include shareholder's loans, royalty agreements and interest bearing loans and other loans. These financial instruments are initially recorded at fair value. Thereafter, the instruments are measured at amortised cost. 1.5 Loans and receivables are reviewed by applying a range of risk identification criteria for impairment losses, which may indicate that the full carrying amount will not be recoverable. An impairment loss is recognised for the amount by which the carrying value of the investment exceeds its recoverable amount. Impairment losses are recognised based on objective evidence of impairment and adjusted to the income statement. Impairment losses are also collectively recognised for asset classes with similar risk profiles where impairments are empirically proven to have been incurred but for which the objective evidence is not yet reported but is expected to emerge in the near future. The impairment losses collectively assessed are adjusted to the income statement. Investments are derecognised when the Company no longer has control over the contractual right that comprises the investment. Disclosure about financial instruments to which the Company is a party is provided in note 11 to the annual financial statements. Investment properties Investment properties are held for long-term rental yields and are not occupied by the Company. Investment properties are treated as long-term investments and are carried at fair value. Valuations are done internally at the end of each accounting period on the capitalised income basis, taking into account the profile and locality of the property, market conditions and core vacancy factors. Changes in fair values are recorded in the income statement and are included in other operating income. Properties to be disposed of are valued based on the above criteria, influenced by market offers received. Leased properties are reflected at original capital cost less depreciation. Property and equipment All owner-occupied property is initially recorded at cost. Depreciation is calculated on a straight-line basis to the revised residual value over the estimated useful life of the property which varies between 25 and 30 years. Land is not depreciated. Equipment acquired is initially recorded at cost and depreciation is calculated on the straight-line method to write off the cost of each asset to its residual value over its estimated useful life, currently assessed as being between three and ten years. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount.
56
BUSINESS PARTNERS
annual report
2007

Gains and losses on disposal of property and equipment are determined by reference to their carrying amount and are included in the income statement. 1.7 Inventories and assets held for resale Inventories consist mainly of repossessed assets and are stated at the lower of cost or net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less selling expenses. Trade receivables Trade receivables are carried at anticipated realisable value and consist mainly of rent receivable and interest accrued. Trade and other payables Trade and other payables represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Cash and cash equivalents Money market assets form part of deposits and bank balances and are carried at fair value. For the purposes of the cash flow statement, cash and cash equivalents comprise cash in hand, deposits held at call with banks and investments in money market instruments. 1.11 Provisions Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events. It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. Employee entitlements to annual leave and bonuses are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date. 1.12 Employee benefits administered fund. The pension plan is funded by payments from employees and the Company, taking into account the recommendations of independent actuaries. The pension accounting costs are assessed using the projected unit credit method. Under this method, the cost of providing pensions is charged to the income statement to spread the regular cost over the service lives of employees, in accordance with the advice of actuaries who carry out a full statutory valuation of the plan every three years. In addition, an interim, nonstatutory valuation is performed between statutory valuation dates. The pension obligation is measured as the present value of the estimated future cash outflow, using interest rates of government securities that have terms to maturity, approximating the terms of the related liability. The Groups net obligation to the pension fund can either be a liability or a benefit to the Group. Assets and liabilities resulting from the calculation are recognised in full on the balance sheet. Actuarial gains or losses that arise from the determination of the liability or asset, are recognised in the statement of recognised income and expense and reflected in equity. The Company pays fixed contributions into a separate trustee-administered fund in terms of the defined contribution plan. The Company will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods. 1.12.2 Post-retirement medical aid obligations The Group provides post-retirement medical aid benefits to employees and pensioners in service of the Group on or before 30 April 1999. The entitlement to post-retirement medical aid benefits is based on the employee remaining in service up to retirement age. The expected costs of these benefits are accrued over the period of employment, using the projected unit credit method. Valuations of these obligations are carried out by independent actuaries. Actuarial gains or losses are recognised in full in the year in which the gain or loss is determined by the actuary in the statement of recognised income and expense, and are accounted for under fair value and other reserves. 1.13 1.12.1 Pension obligations The Company operates a defined benefit pension plan and a defined contribution pension plan. All employees are members of one of these funds. The assets of the defined benefit pension plan are held in a separate trusteeDeferred tax Deferred tax is determined by using the liability method, for all temporary differences arising between the tax base of assets and liabilities and their carrying values for financial reporting purposes. Currently enacted tax rates are used to determine deferred tax.
1.8
1.9
1.10
57
BUSINESS PARTNERS
annual report
2007

Under this method, the Company is required to make provision for deferred tax on the fair value adjustments arising from investment properties and, in relation to an acquisition, on the difference between the fair values of net assets acquired and their tax base. The principal temporary differences arise from provisions. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the tax asset can be utilised. 1.14
BUSINESS PARTNERS
The estimates and variables used in determining the fair value adjustments on investment properties are disclosed in note 3. Assets are subject to regular impairment reviews as required. Impairments are measured as the difference between the cost (or amortised cost) of a particular asset and the current fair value or recoverable amount. In determining the recoverable amount on portfolios of investments, historical loss experience is adjusted to reflect current economic conditions, as well as changes in the emergence period for objective evidence of impairment to present itself.
annual report
2007
Operating leases Leases of assets, under which all the risks and benefits of ownership are effectively retained by the lessor, are classified as operating leases. Payments made under operating leases are charged to the income statement on a straight-line basis over the period of the lease. Revenue recognition Revenue comprises the invoiced value, net of value added tax, rebates and discounts. Interest income is recognised on a time apportionment basis, taking account of the principal amount outstanding and the effective rate over the period to maturity to determine when such income will accrue to the Company. Rental income is recognised equally over the period of the lease taking into consideration the clauses affecting the rental charge. Dividend income is recognised when the right to receive payment is established.
1.15
1.16
Critical accounting estimates and judgements Critical accounting estimates are those that involve complex or subjective judgements or assessments. The areas of the Companys business that typically require such estimates are the determination of fair value for financial assets, financial liabilities and investment properties, the impairment charges on financial instruments and deferred taxes. The fair values of financial assets and liabilities are classified and accounted for in accordance with the policies set out on section 1.4 above. Listed market prices for equities, bonds and other instruments are used as far as possible in the determination of the fair value. If prices are not available, pricing models are used that consider a range of probable factors.
58

GROUP
2007 R000 2. CHANGE IN ACCOUNTING POLICY During the current financial year, the Company changed its accounting policy to comply with the following South African Statements of Generally Accepted Accounting Practice: IAS 19 (AC 116), Employee Benefits. The revised accounting statement allows for actuarial gains and losses on Employee Benefits to be reflected in full in the statement of recognised income and expenses. This approach has been adopted, whereas in previous years such gains and losses were accounted for in terms of the corridor approach. The effects of the change in policy is set out below: 2006 R000
COMPANY
2007 R000 2006 R000
2007
2.1 Net profit Net profit as previously reported Accounting for actuarial gains / (losses) on employee benefits Deferred tax Net profit as currently reported 2.2 Retained earnings Opening balance as previously reported Restatement Restated opening balance 2.3 Fair value and other reserves Opening balance as previously reported Restatement Restated opening balance 2.4 Post-retirement medical aid obligation Opening balance as previously reported Restatement Restated opening balance 2.5 Deferred tax asset Opening balance as previously reported Restatement Restated opening balance 1 580 571 1 580 571
133 088 (3 789) 1 099 130 398 1 473 239 2 690 1 475 929 1 517 003 1 517 003
121 801 (3 789) 1 099 119 111 1 423 816 2 690 1 426 506
425 1 190 1 615
263 263
425 1 190 1 615
263 263
41 987 (1 676) 40 311
43 265 (3 789) 39 476
41 987 (1 676) 40 311
43 265 (3 789)
39 476
23 951 (486) 23 465
25 891 (1 099) 24 792
22 638 (486) 22 152
22 607 (1 099) 21 508
BUSINESS PARTNERS
annual report

GROUP
2007 R000
2007
COMPANY
2006 R000 209 544 10 760 (11 170) (99) 15 439 224 474 2007 R000 202 287 13 397 (3 373) (99) 22 868 235 080 2006 R000 185 431 10 439 (7 855) (99) 14 371 202 287
3.
annual report
INVESTMENT PROPERTIES Fair value beginning of year Acquisitions Disposals Depreciation on leasehold property Fair value adjustment Fair value end of year The valuation of property investments was performed internally by suitably qualified personnel and was based on the capitalised income method. The key assumptions used in the valuation of the investment properties were: Capitalisation rates used varied between 10,5% and 16% Vacancy factors varied between 0% and 16% Property maintenance and expenses varied between 12% and 35% of total rent The following items regarding the investment properties are included in the income statement: Rental income Repairs and maintenance expenses Other operating expenses A register of the property portfolio is available for inspection at the registered office.
224 474 24 387 (4 174) (99) 23 172 267 760
BUSINESS PARTNERS
51 540 7 674 25 128
48 183 5 105 23 028
42 550 5 941 19 236
39 847 3 929 17 836
4.
BUSINESS INVESTMENTS Investment in En Commandite partnerships Financial instruments fair value adjusted to equity Loans and receivables Less: Short-term portion Carrying value of business investments
(Refer note 4.1) (Refer note 4.2) (Refer note 4.3)
26 153 1 689 1 337 255 (242 439) 1 122 658
16 847 1 899 1 119 601 (199 447) 938 900
26 025 1 689 1 338 740 (241 780) 1 124 674
15 417 1 899 1 118 814 (199 026) 937 104
4.1 Investment in En Commandite partnerships The Company entered into an En Commandite partnership with the Umsobomvu Youth Fund to establish a R125 million investment fund aimed at expanding the ownership of franchises amongst the previously disadvantaged youth. The Company will contribute 20 percent of the capital for the fund, and the Umsobomvu Youth Fund the balance of 80 percent. The Company entered into an En Commandite partnership with Khula Enterprise Finance Limited to establish a R150 million investment fund aimed at promoting startup ventures amongst previously disadvantaged individuals. The Company will contribute 20 percent of the capital for the fund, and Khula the balance of 80 percent. The investments are stated at cost and profits are equity accounted in line with specifications of the partnership agreements. Future investments by the Company in the partnerships are disclosed in note 26.
60

GROUP
2007 R000 4.2 Financial instruments fair value adjusted to equity Fair value beginning of year Disposals Aquisitions Fair value (loss) / surplus transferred to equity Fair value end of year The above available for sale investments, comprising mainly bond market investments and listed shares, are measured at fair value. Fair value is determined by reference to quoted prices on the relevant bond market and securities exchange. 4.3 Loans and receivables Interest bearing loans These loans are secured and are priced at market related rates relative to the quality and coverage of the underlying collateral. The loans are initially recorded at fair value and thereafter measured at amortised cost, at level yields to maturity that vary between 10,5 percent and 22 percent. Shareholders loans These loans are unsecured, and are priced at interest rates between 0 percent and 13,5 percent. The loans are initially recorded at fair value and thereafter measured at amortised cost, based on rates applicable to instruments with a similar expected lifespan or duration which vary between 7,3 percent and 8,2 percent. Royalty agreements The future cash flows resulting from the royalty agreements are adjusted to expected royalty payments by applying a risk premium to the contracted royalty payments. These expected future royalty payments are then discounted at a rate intrinsic to the investment to which the royalty agreement relates and measured at amortised cost. The rates vary between 1,25 percent and 17,5 percent. Staff loans These loans, consisting mainly of mortgage loans over residential property and bearing interest at rates linked to the prime overdraft rate, are initially recorded at fair value and thereafter measured at amortised cost using rates that vary between 6 percent and 11 percent. Total for loans and receivables 1 899 (210) 1 689 2006 R000 1 670 229 1 899
COMPANY
2007 R000 1 899 (210) 1 689 2006 R000 1 670 229 1 899
1 268 087
1 046 930
1 267 249
1 046 271
46 898
50 474
49 235
50 365
19 953
18 094
19 951
18 087
2 317 1 337 255
4 103 1 119 601
2 305 1 338 740
4 091 1 118 814

GROUP
2007 R000
2007
COMPANY
2006 R000 2007 R000 2006 R000
5.
annual report
INVESTMENTS IN ASSOCIATES Audited financial statements are utilised to determine the share of associated company earnings. Where these are not available, management estimates are not included in equity accounted earnings. A register containing details of all listed, unlisted and other investments is available at the registered office. Unlisted shares at cost Share of retained earnings Total for unlisted associates Directors valuation of the investment in unlisted associates The valuation methods applied to determine the directors valuation are consistent with the valuation guidelines recommended by the South African Venture Capital Association (SAVCA). The movement in investments in associates is as follows: At beginning of year Share of results before tax Share of tax Other movements (net acquisitions and disposals) At end of year 25 770 19 255 (2 997) (4 050) 37 978 24 107 12 651 (3 976) (7 012) 25 770 1 894 (17) 1 877 3 256 (1 362) 1 894 3 685 34 293 37 978 134 062 3 692 22 078 25 770 114 114 1 877 1 877 133 177 1 894 1 894 111 596
BUSINESS PARTNERS
6.
PROPERTY AND EQUIPMENT 21 013 1 568 (1 951) 20 630 (18 668) (1 158) 1 796 (18 030) 2 600 20 452 1 669 (1 108) 21 013 (18 036) (1 532) 900 (18 668) 2 345 21 013 1 495 (1 951) 20 557 (18 668) (1 150) 1 796 (18 022) 2 535 20 434 1 669 (1 090) 21 013 (18 018) (1 532) 882 (18 668) 2 345
6.1 Equipment Cost beginning of year Acquisitions Disposals Cost end of year
Accumulated depreciation beginning of year Depreciation charged Depreciation on disposals Accumulated depreciation end of year Closing net book amount
62

GROUP
2007 R000 6.2 Land Cost beginning of year Disposals Cost end of year 6.3 Buildings Cost beginning of year Improvements Disposals Cost end of year Accumulated depreciation beginning of year Depreciation charged Depreciation on disposals Accumulated depreciation end of year Closing net book amount Total net book amount for property and equipment 7. INVESTMENTS IN SUBSIDIARIES Unlisted shares at cost Loans Provisions 7 295 7 295 2006 R000 7 295 7 295
COMPANY
2007 R000 2006 R000
7 431 217 7 648 (939) (235) (1 174) 6 474 16 369
7 262 169 7 431 (704) (235) (939) 6 492 16 132
2 535 6 39 934 (5 117) 34 823
2 345 6 50 900 (5 117) 45 789
The Companys interest in the aggregate net profits and losses of subsidiaries are: Profits Losses The details of the subsidiaries are disclosed in note 31.
13 441
12 358 (719)

GROUP
2007 R000
2007
COMPANY
2006 R000 2007 R000 2006 R000
8.
annual report
DEFERRED TAX ASSET / LIABILITY Deferred tax is calculated on all temporary differences under the liability method using a principal tax rate of 29 percent (2006: 29 percent). The movement on the deferred tax account is as follows: Provisions Fixed assets Fair value adjustments Assesed losses Dividends received after the dividend cycle Fair value and other reserves charge At end of the year Deferred tax assets / (liabilities) consist of temporary differences relating to: Provisions Fixed assets Fair value adjustments: financial instruments Dividends received after the dividend cycle Assessed losses Defined benefit pension fund surplus Total deferred tax asset / (liability) At beginning of the year Income statement charge 23 465 904 (3 291) (363) 477 (1 438) (32 367) (12 613) 33 983 (13 888) (2 369) 43 2 350 (32 732) (12 613) 100 3 378 40 3 518 24 792 5 236 (4 976) (3 349) 833 1 481 (552) 23 465 33 079 (10 597) (2 371) 1 481 1 873 23 465 103 6 191 37 6 331 367 255 14 378 5 214 386 847 22 152 1 388 (3 093) (2 414) (1 438) (32 367) (15 772) 32 533 (13 286) (2 330) 43 (32 732) (15 772) 100 3 378 40 3 518 261 210 9 002 3 501 273 713 21 508 (221) 743 (807) 1 481 (552) 22 152 31 145 (10 193) (281) 1 481 22 152 103 6 191 37 6 331 367 255 11 601 5 214 384 070
BUSINESS PARTNERS
9.
INVENTORIES AND ASSETS HELD FOR RESALE Equipment (at cost) Repossessed properties (at lower of cost or net realisable value) Other (at cost)
10. DEPOSITS AND BANK BALANCES Term deposits Bank current accounts Interest accrued
261 210 15 904 3 501 280 615
64

11. FINANCIAL INSTRUMENTS The primary risks arising from the Companys financial instruments are credit risk, interest rate risk and liquidity risk.
11.4
No single investment represents more than 0,9 percent of the total investment portfolio, limiting the concentration of risk in a single investment. 11.5 The ongoing monitoring of the risk profile of the portfolio is managed and guided by investment policies, investment committees and credit control functions. Exception reporting at various levels within the organisation provides early identification of increases in the credit risk of the business investment portfolio. A formal risk assessment process is undertaken in terms of which investments are impaired in line with extraordinary increases in the credit risk. The credit risk of rent debtors is controlled and monitored on an ongoing basis by property management committees, credit control functions as well as exception reporting at various levels in the management structure. Credit risk in the investment of treasury funds is controlled by a treasury policy as reviewed and approved by the Audit and Risk Committee. An investment mandate limits the investment exposure to each specific instrument and institution used. 11.2 Interest rate risk Changes in interest rates will affect the revenue stream of the Company, as most of the interest bearing investment products are linked to the prime overdraft rate. The level of interest rates also determines the return on treasury funds, since most investments are made over the short-term to minimise liquidity risk.
Fair values of financial assets and financial liabilities The carrying amount of the financial assets and liabilities is fair and where required, adequate provision was made for any potential impairments to the carrying value. The fair values have been determined using available information and are indicative of the amounts the Company could realise in the normal course of business. Deposits and bank balances The investment of cash and cash equivalents, and the management thereof, are controlled through a treasury policy which is reviewed by the Audit and Risk Committee. Investment limits exist for each instrument and institution used. Returns on investments are measured against returns of comparable money market instruments. The carrying value of deposits and bank balances are fair. Remaining term of money market instruments
0 to 1 month 1 to 3 months 3 to 6 months 6 to 12 months Over 12 months Accrued interest Total
Total R000
77 114 150 000 50 000 3 501
280 615
BUSINESS PARTNERS
annual report
11.1
Credit risk Accepting the credit risk of investing in small and medium businesses forms the core business activity of the Company. The credit risk at the investment stage of any potential investment is analysed and assessed in a due diligence process where the entrepreneur is evaluated, the viability of the enterprise is considered and various other risk indicators are determined, verified and benchmarked. The concentration of risk in the investment portfolio is also decreased through industry diversification. The 2 037 investments in the portfolio are representative of most sectors of the economy, with no specific industry or geographical area representing undue risk.
11.3
Liquidity risk In order to mitigate any liquidity risk, the Companys policy has been to balance net operational cash flows with the maturity term of the treasury investments. In addition, substantial borrowing facilities have been arranged should it be required.
2007
The sensitivity to interest rate changes is decreased by alternative revenue streams from the investment portfolio, such as investment property returns, dividends and royalty fees.

GROUP
2007 R000 12. SHARE CAPITAL 12.1 Authorised 400 000 000 ordinary shares of R1 each 12.2 Issued 178 834 594 ordinary shares of R1 each 11 084 900 (2006: 17 800 000) treasury shares held by the share trust 167 749 694 (2006: 161 034 594) ordinary shares 12.3 Unissued shares Ten percent of the unissued shares are under the control of the directors in terms of a general authority to allot and issue shares on such terms and conditions and at such times as they deem fit. This general authority expires at the forthcoming annual general meeting of the Company. The Company has a share incentive scheme in terms of which shares are issued and options are granted (refer to note 30). 13. FAIR VALUE AND OTHER RESERVES Balance beginning of year Fair value adjustment to financial instruments (refer note 4.2) Actuarial gains / (losses) post-retirement medical aid defined benefit pension fund Foreign currency translation losses Balance end of year 2006 R000
COMPANY
2007 R000 2006 R000
annual report
2007
400 000
400 000
400 000
400 000
BUSINESS PARTNERS
178 835 (29 033) 149 802
178 835 (46 626) 132 209
178 835
178 835
178 835
178 835
1 615 (149) (746) 80 136 (86) 80 770
263 162 1 190 1 615
1 615 (149) (746) 80 136 80 856
263 162 1 190 1 615
14. BORROWINGS 14.1 Unsecured Interest-free loans repayable by rebates on petrol purchases
289 289
599 599
289 289 2 648 145 289
599 599 2 376 434 599
14.2 Borrowing powers Maximum permitted borrowings in terms of the Company's articles of association Total borrowings
66

Defined Benefit Pension Fund The defined benefit fund was actuarially valued at 1 April 2004 in terms of section 16 of the Pension Fund Act of 1956 (as amended). Statutory valuations of this fund are performed every three years. The next statutory valuation of the fund will be performed with an effective date of 1 April 2007. Projected unit credit valuation performed in terms of the requirements of IAS 19 (AC 116), Employee Benefits An actuarial valuation of the defined benefit pension fund was performed effective for 31 March 2007 applying the Projected Unit Credit method in line with the requirements of IAS 19 (AC 116), Employee Benefits. The current service cost reflects the increase in the past service liability resulting from employee service during the financial year. The interest cost represents the increase during the year in the past service obligation which arises because the benefits are one year closer to retirement and is determined by multiplying the discount rate used in the 1 April 2006 valuation by the average liability over the period. Based on the market value of the assets, the funding level, in terms of this valuation basis and assumptions, was 146,2 percent.
67
BUSINESS PARTNERS
Defined Contribution Pension Fund The Company pays fixed contributions into a separate trustee-administered fund in terms of the defined contribution plan. The Company has no legal or constructive obligation to pay additional contributions to the fund apart from those contributions that are contractual between the employer and employee. Should the fund not hold sufficient assets to pay employee benefits, no liability to make any additional contribution can or will accrue to the Company.
annual report
15. EMPLOYEE BENEFITS 15.1 Pension funds The Company operates a defined benefit pension fund as well as a defined contribution pension fund. All permanently employed personnel are members of one of the two funds. Both pension funds are funded by employee and employer contributions.
2007

2007 R000
2007
2006 R000
2005 R000
2004 R000
The results of the valuation are as follows: Projected benefit obligation at beginning of year Interest cost Current service cost Benefits paid 235 769 20 047 9 619 (13 736) 15 930 12 243 (4 733) 259 209 176 285 20 603 8 369 (10 062) 18 910 1 966 38 608 235 769 169 852 19 038 8 681 (27 253) 466 5 967 176 285 156 037 19 553 8 826 (12 901) 15 478 (1 663) 169 852
BUSINESS PARTNERS
annual report
Additional past service obligations Actuarial gains / (losses) Projected benefit obligation at end of year The total value of the past service liabilities are made up as follows: Active members Pensioners Total past service liability at end of year Market value of assets at beginning of year Expected return on assets Actuarial gains / (losses) Employer contributions Member contributions Benefits paid Expenses and tax paid Market value of assets at end of year The principal actuarial assumptions used were: Discount rate Expected rate of return on assets Expected future salary increases Expected average remaining working life
191 779 67 430 259 209 319 471 25 877 62 576 7 942 2 877 (13 736) (2 533) 402 474
173 697 62 072 235 769 240 630 24 063 58 421 6 899 2 500 (10 062) (2 980) 319 471
130 130 46 155 176 285 210 764 23 184 27 344 6 599 3 666 (27 253) (3 674) 240 630
124 729 45 123 169 852 168 753 20 250 24 993 7 216 4 017 (12 901) (1 564) 210 764
68
8,5% 8,5% 6,7% 14,7
8,1% 8,1% 6,2% 15,1
10,0% 10,0% 6,7% 16,1
11,0% 11,0% 8,0% 19,3

The pension fund assets, as administered by three asset managers, are in accordance with prudential guidelines, and consist of the following asset classes Equity Capital market Money market Pooled funds Market value of assets at end of year 301 404 26 512 70 266 4 292 402 474
2007 R000
It is anticipated, on a best estimate basis, that contributions to be paid to the pension fund will amount to R9,995 million in the period 1 April 2007 to 31 March 2008. This amount includes contributions made by the employer as well as the members. Recognition of the surplus of the Fund as an asset of the Company The surplus of the Fund is recognised as an asset in the balance sheet of the Company after a decision was taken by the Trustees of the Fund to apportion all future surplusses of the Fund to an employer surplus account. This decision was taken on 23 March 2007, and the rule change was submitted to the FSB for approval. The decision followed protracted negotiations between the Trustees and the employer, and was taken on the basis of certain benefit improvements and amendments to conditions of service. The Pension Fund Second Amendment Act, 2001 permits the establishment of contingency reserve accounts that the Board of Trustees deem to be prudent. The Trustees decided to establish a Data Reserve and a Solvency Reserve amounting to R2,22 million and R28,177 million respectively on 31 March 2007. These reserves are deducted in the determination of the surplus. The Trustees of the Pension Fund identified prior improper uses of the pension fund surplus, in terms of the definition of surplus utilised improperly by the employer prior to surplus apportionment as contained in Section 15B(6) of the Pension Fund Second Amendment Act, 39 of 2001. The value of the so-called improper use of surplus amounted to R9,829 million on 1 April 2004. This amount has not been repaid to the Fund by the employer. The actuary determined the amount of this liability on 31 March 2007 by adding interest to the amount from 1 April 2004 at the rate of return achieved by the Fund, and the value at 31 March 2007 amounts to R21,001 million. In calculating the surplus or shortfall in the Fund to reflect either an asset or liability of the Company, the amount of the prior improper uses of the pension fund surplus of R21,001 million has been excluded. It is unclear at this stage whether the amount constitutes a liability of the employer to the Fund. The amount of R21,001 million has therefore been reflected as a contingent liability (refer note 27) and will remain a contingent liability until finality regarding the interpretation of the Act is obtained. It should be noted that had the liability been accounted for, the effect on the consolidated net asset value of the Group would have been nil, since both the liability and the asset would have been reflected. In addition, since any future surplus of the Fund will be allocated to the employer surplus account, any liability of the employer to the Fund will result in a corresponding asset of the Company, since it will be utilised for the economic benefit of the employer within the prescribed rules of the Act. Financial position of the Fund Assets Less Contingency reserves Less Past Service liabilities Surplus reflected as an asset of the Group 402 474 (30 397) (259 209) 112 868

15.2 Post-retirement medical aid obligation The Company has an obligation to provide post-retirement medical aid benefits to employees and pensioners in the service of the Company on or before 30 April 1999. The entitlement to these benefits is dependent upon the employee remaining in service until retirement age. The employer set the post-retirement medical aid subsidy for all participants (pensioners and employees) at a fixed amount since 1 January 2000 which increases annually by the same percentage granted as an increase to pensioners pensions in the previous calendar year. The main actuarial assumptions used in determining the liability are the investment returns expected in the Pension Fund which will afford the annual increase in pensions to which this liability is linked. An investment return of 9 percent (2006: 9 percent) per annum was applied, and a subsidy inflation equal to the investment returns in excess of 5 percent (2006: 5 percent) per annum was applied. The amounts recognised are as follows:
annual report
2007
BUSINESS PARTNERS
GROUP
2007 R000 Interest cost Current service cost Benefits paid Total included in staff costs Actuarial gains / (losses) recognised in statement of recognised income and expense Movement in liability recognised in the balance sheet Liability accounted for at beginning of year Total expense as above Liability accounted for at end of year 3 628 764 (1 770) 2 622 1 050 3 672 40 311 3 672 43 983 2006 R000 3 553 779 (1 821) 2 511 (1 676) 835 39 476 835 40 311
COMPANY
2007 R000 3 628 764 (1 770) 2 622 1 050 3 672 40 311 3 672 43 983 2006 R000 3 553 779 (1 821) 2 511 (1 676) 835 39 476 835 40 311
70

LEAVE PAY
R000 16. PROVISIONS Group At 1 April 2005 Provided for the year Utilised during the year At 31 March 2006 At 1 April 2006 Provided for the year Utilised during the year At 31 March 2007 Company At 1 April 2005 Provided for the year Utilised during the year At 31 March 2006 At 1 April 2006 Provided for the year Utilised during the year At 31 March 2007
BONUS
R000
TOTAL
R000
2007
15 558 15 558 2 311 (1 305) 16 564
18 034 18 034 17 587 (14 925) 20 696
33 592 33 592 19 898 (16 230) 37 260
13 762 2 919 (1 123) 15 558 15 558 2 311 (1 575) 16 294
14 837 20 776 (17 579) 18 034 18 034 17 587 (15 310) 20 311
28 599 23 695 (18 702) 33 592 33 592 19 898 (16 885) 36 605
71
BUSINESS PARTNERS
annual report
13 762 2 919 (1 123)
14 837 20 776 (17 579)
28 599 23 695 (18 702)

INTERNATIONAL OPERATIONS BUSINESS INVESTMENTS PROPERTY INVESTMENTS TOTAL
R000
2007
R000
R000
R000
annual report
17. SEGMENT INFORMATION For the year ended 31 March 2007 Revenue Profit before tax Total assets Total liabilities Other segment items Capital expenditure Depreciation For the year ended 31 March 2006 Revenue Profit before tax Total assets Total liabilities Other segment items Capital expenditure Depreciation
1 780 104 4 885 4 866 73 8
237 656 155 884 1 782 855 104 423 1 471 1 131 205 502 125 870 1 557 736 91 585 1 667 1 487
60 803 58 624 295 900 31 374 24 411 353 58 300 45 659 272 603 24 359 10 762 379
300 239 214 612 2 083 640 140 663 25 955 1 492 263 802 171 529 1 830 339 115 944 12 429 1 866
BUSINESS PARTNERS
The Company activities are concentrated in a number of business divisions: The International Operations division comprise a fund management company, currently busy with a pilot phase of establishing three small and medium enterprise investment funds with third party investors. The Business Investments division makes equity, as well as interest-bearing investments, with a range of investment products structured to address the requirements of the investee company. The Property Investments division earns property management fees from the management of commercial and industrial properties on behalf of the Company as well as other property owners. The Company also invests in property, either wholly-owned or partially-owned, on which rental income is earned and property related expenses are incurred. Other operations of the Company comprise the mobilisation and facilitation of Mentorship services, the management of surplus funds and providing corporate support services. These operations have been included in the Business Investments segment. The assets of the divisions consist primarily of business investments, investment properties, equipment, furniture and vehicles, inventories, receivables and operating cash. The liabilities comprise operating liabilities, taxation and borrowings. Capital expenditure comprises additions to investment properties, equipment, furniture and vehicles.
72

GROUP
2007 R000 18. REVENUE Revenue consists of: Interest on business investments Interest on cash and cash equivalents Royalty fees Financing fees Dividends received Fund management fees Rental income Property management fees Professional services rendered 148 037 25 085 38 301 6 958 4 493 14 186 48 641 10 605 3 933 300 239 19. OTHER OPERATING INCOME Profit on realisation of assets Recovery of property expenses Fair value adjustment of investment properties Fair value adjustment of financial instruments Interest on other loans Other 36 443 15 457 23 172 (1 685) 1 331 7 036 81 754 20. OPERATING EXPENSES Staff costs (refer note 22) Bad debts net of recoveries and impairment reversed Bad debts written off Bad debt recoveries Impairment on investments reversed Repairs and maintenance Other administrative overheads 114 690 6 701 32 613 (22 353) (3 559) 9 762 55 207 186 360 117 984 30 394 30 382 5 708 12 707 6 733 45 733 10 036 4 125 263 802 15 668 14 633 15 439 5 404 1 714 4 459 57 317 103 222 (308) 29 064 (19 344) (10 028) 6 932 52 340 162 186 147 633 24 649 38 253 6 958 2 867 12 412 43 397 12 918 3 933 293 020 37 313 13 108 22 868 5 673 1 262 3 217 83 441 111 210 7 331 31 776 (21 876) (2 569) 8 026 52 009 178 576 117 453 30 143 30 354 5 697 14 882 6 733 40 518 11 819 4 124 261 723 14 868 12 337 14 371 4 039 1 683 4 266 51 564 103 222 49 28 716 (19 222) (9 445) 5 781 50 229 159 281 2006 R000
COMPANY
2007 R000 2006 R000

GROUP
2007 R000
2007
COMPANY
2006 R000 2007 R000 2006 R000
21. PROFIT FROM OPERATIONS The following items have been included in arriving at profit from operations: Depreciation on property and equipment Interest paid Directors' emoluments as directors as management Auditor's remuneration audit other services Impairment on investments reversed Bad debts Repairs and maintenance Leasing charges equipment office premises Dividends on investments listed unlisted Income from subsidiaries dividends received Profit on sale of property and equipment Profit on sale of investment properties Profit on sale of investments Fair value adjustment on investment properties 1 492 276 1 866 55 1 249 76 1 127 9 190 1 124 160 3 559 32 613 9 762 15 1 460 4 4 489 60 6 554 29 851 23 172 1 224 154 10 028 29 064 6 932 16 1 457 2 12 705 96 3 990 11 459 15 439 881 160 2 569 31 776 8 026 15 5 917 4 2 863 2 174 60 4 654 32 621 22 868 1 631 52 809 10 744 1 163 154 9 445 28 716 5 781 16 4 724 2 14 880 2 175 96 2 700 11 971 14 371
BUSINESS PARTNERS
annual report
22. STAFF COSTS Salaries Bonuses Leave pay Pension costs (see note 15.1) Post-retirement medical aid costs Other costs
74 564 17 587 2 311 10 819 2 622 6 787 114 690
63 499 20 776 2 919 9 399 2 511 4 118 103 222
72 080 17 587 2 311 10 819 2 622 5 791 111 210
63 499 20 776 2 919 9 399 2 511 4 118 103 222
74

GROUP
2007 R000 23. TAX EXPENSE 23.1 Income statement charge South African normal tax Current year Deferred tax current year Secondary tax on companies Tax of associated companies Capital gains tax 23.2 Reconciliation of rate of taxation South African normal tax rate Adjusted for: Income not subject to normal tax Secondary tax on companies Capital gains tax Other Total effective rate on profit before taxation 24. EARNINGS PER SHARE Basic earnings per share are calculated by dividing the net profit by the number of ordinary shares in issue during the year. 24.1 Basic earnings per share Net profit Weighted number of ordinary shares (000) Basic earnings per share (cents) For the diluted earnings per share calculation the number of ordinary shares in issue are adjusted on the assumption that all remaining share options are exercised. The net profit is adjusted for interest earned on the capital received from the share trust for the full repayment of the loan. 160 821 161 594 99,5 130 398 161 035 81,0 2006 R000
COMPANY
2007 R000 2006 R000
2007
41 045 3 711 44 756 2 661 2 997 3 377 53 791 29,00% -3,94% -5,72% 1,24% 1,57% -1,03% 25,06%
31 717 775 32 492 3 319 3 976 1 344 41 131 29,00% -5,02% -4,96% 1,94% 0,78% -2,78% 23,98%
39 186 5 557 44 743 2 661 3 377 50 781 29,00% -3,33% -6,09% 1,35% 1,71% -0,30% 25,67%
31 376 (1 196) 30 180 3 319 1 344 34 843 29,00% -6,37% -5,80% 2,16% 0,87% -3,60% 22,63%
75
BUSINESS PARTNERS
annual report

GROUP
2007 R000
2007
COMPANY
2006 R000 2007 R000 2006 R000
annual report
24.2 Diluted earnings per share Net profit Interest received (net of tax effect) Net profit used to determine diluted earnings per share Number of ordinary shares in issue ('000) Adjustment for share options Number of ordinary shares used to determine diluted earnings per share Diluted earnings per share (cents) 24.3 Headline earnings per share Net profit Capital profit on sale of equipment Profit on sale of property investments Headline earnings Headline earnings per share (cents) 24.4 Diluted headline earnings per share Headline earnings Interest received (net of tax effect) Diluted headline earnings Diluted headline earnings per share (cents) 25. DIVIDEND PER SHARE Dividend in respect of 2006 of 18 cents per share paid on 11 August 2006 to shareholders registered on 25 July 2006. Dividend in respect of 2005 of 16 cents per share paid on 12 August 2005 to shareholders registered on 26 July 2005.
160 821 1 842 162 663 167 750 11 085 178 835 91,0
130 398 2 312 132 710 161 035 17 800 178 835 74,2
BUSINESS PARTNERS
160 821 (60) (6 554) 154 207 95,4
130 398 (96) (3 990) 126 312 78,4
154 207 1 842 156 049 87,3
126 312 2 312 128 624 71,9
28 987 25 766 28 987 25 766
32 190 28 614 32 190 28 614
A dividend in respect of 2007 of 20 cents per share was declared on 17 May 2007, payable to shareholders registered on 25 July 2007, payable on or about 10 August 2007.
76

GROUP
2007 R000 26. COMMITMENTS AND LEASE AGREEMENTS Business investments approved but not yet paid out Capital committed to En Commandite partnerships (refer note 4). Unexpired portion of lease agreements less than 1 year 1 year to 4 years 5 years All commitments will be funded from own resources. 27. CONTINGENT LIABILITIES Defined benefit pension fund # Guarantees * 252 421 28 975 2 582 6 064 1 143 291 185 2006 R000 230 930 39 583 2 672 6 286 3 215 282 686
COMPANY
2007 R000 252 421 28 975 2 582 6 064 1 143 291 185 2006 R000 230 915 39 583 2 672 6 286 3 215 282 671
21 001 487 21 488
9 829 756 10 585
21 001 487 21 488
9 829 756 10 585
The existence of the liability by the employer to the pension fund is uncertain, and the final amount is subject to an agreement between the Trustees of the Fund and the employer (refer note 15 for more details). The effect of the potential liability will be negated by the fact that any surplus/asset of the Fund will be reflected as an asset of the Company. The guarantees are issued to third parties on behalf of clients and will be paid should the clients default on their obligations to the third parties.

GROUP
2007 R000
2007
COMPANY
2006 R000 2007 R000 2006 R000
annual report
28. CASH FLOW INFORMATION 28.1 Cash generated from operating activities Profit before taxation Adjustments Depreciation Profit on sale of assets Dividends received Income from associated companies Adjustment to the carrying value of properties Fair value adjustment of inventories and assets held for resale Fair value adjustment of financial instruments Non-cash movement in borrowings Provisions and write-offs Changes in working capital Decrease / (increase) in inventory and assets held for resale Decrease / (increase) in accounts receivable (Decrease) / increase in accounts payable Finance cost
214 612 (43 270) 1 492 (36 443) (4 493) (19 255) (23 172) 833 1 685 (310) 36 393 6 338 2 814 (3 075) 6 599 276 177 956
171 529 (39 016) 1 866 (15 668) (12 707) (12 651) (15 439) 306 (5 404) (2 069) 22 750 8 414 5 061 1 500 1 853 55 140 982 (18 220) (41 131) 775 3 976 16 713 (37 887) (143) (28 614) 2 847 116 (25 794)
197 809 (31 059) 1 249 (37 313) (2 867) (22 868) 833 (5 673) (310) 35 890 6 807 2 814 1 481 2 512 76 173 633 (16 520) (50 781) 5 557 26 258 (35 486) (116) (32 190) 25 (32 281)
153 954 (25 308) 1 631 (14 868) (14 883) (14 371) 306 (4 039) (2 069) 22 985 7 143 5 061 1 299 783 52 135 841 (18 119) (34 843) (1 196) 16 520 (37 638) (143) (28 614) 116 (28 641)
BUSINESS PARTNERS
28.2 Taxation paid Taxation liability at beginning of year Tax provision for the year Deferred tax Paid by associated companies Taxation liability at end of year 28.3 Dividends paid Dividends payable at beginning of year Dividends declared Share trust dividends Dividends payable at end of year
(16 713) (53 791) 3 711 2 997 27 893 (35 903)
(116) (32 190) 3 203 25 (29 078)
78

GROUP
2007 R000 29. RELATED PARTIES 29.1 Loans to related parties Loan to the Business Partners Employee Share Trust Balance at the beginning of the year Fair value adjustment Loan repaid during the year Balance at the end of the year Loans to subsidiaries Balance at the beginning of the year Loans advanced during the year Balance at the end of the year Dividends received from subsidiaries 29.2 Directors' remuneration Executive directors as management gains made on the exercise of share options Non-executive directors 29.3 Loans to associates Balance at the beginning of the year Loans advanced during the year Loan repayments received Loans written off Balance at the end of the year These loans form part of the normal business activities and are included under business investments (refer note 4).
COMPANY
2006 R000 2007 R000 2006 R000
2007
24 953 7 358 (23 342) 8 969 20 830 5 018 25 848 2 174
29 069 (1 266) (2 850) 24 953 25 938 (5 108) 20 830 2 175
9 190 7 219 1 127 477 074 218 079 (119 102) (6 506) 569 545 410 912 178 864 (103 441) (9 261) 477 074 472 150 217 743 (117 829) (6 506) 565 558
10 744 809 405 895 178 864 (103 348) (9 261) 472 150
BUSINESS PARTNERS
annual report

30. SHARE INCENTIVE SCHEME 17 800 000 shares of R1 each were reserved to meet the requirements of the Employee Share Incentive Scheme in terms of the shareholders resolution dated 18 August 1998. The Business Partners Employee Share Trust has acquired the full allocation of shares (refer note 12.2) Unallocated options The movement in the scheme during the year is summarised as follows: Shares under option at beginning of the year Share options allocated Options exercised during the year Options forfeited during the year @ 300 cents @ 325 cents @ 250 cents @ 262 cents Under option at the end of the year The shares under option are available for exercise as follows: After 1 October 2002 @ 300 cents After 1 October 2003 @ 325 cents After 1 October 2004 @ 300 cents After 1 October 2004 @ 250 cents After 1 October 2005 @ 325 cents After 1 October 2005 @ 250 cents After 1 October 2006 @ 300 cents After 1 October 2006 @ 250 cents After 1 October 2007 @ 325 cents After 1 October 2007 @ 250 cents After 1 October 2007 @ 262 cents After 1 October 2008 @ 250 cents After 1 October 2009 @ 250 cents After 1 October 2009 @ 262 cents After 1 October 2010 @ 250 cents After 1 October 2011 @ 262 cents The expiry dates of these share options are as follows: at 30 September 2007 at 30 September 2008 at 30 September 2009 at 30 September 2010 at 30 September 2011 at 30 September 2012 During the year no share options were allocated to executive directors. Total outstanding share options allocated to current executive directors are: @ 300 cents @ 325 cents @ 250 cents
2007 No. of shares 000
2006 No. of shares 000
2007
5 553
5 011
annual report
12 789 (6 715) (276) (100) (166) 5 532 191 826 191 508 826 314 191 511 826 314 2 511 314 2 3 2 5 532 573 2 479 1 524 941 10 5 5 532 217 501 620
13 764 0 0 (617) (188) (169) (1) 12 789 2 521 860 2 521 552 860 325 2 521 555 860 325 2 555 325 2 3 2 12 789 7 565 2 579 1 655 975 10 5 12 789 2 623 501 620
80
BUSINESS PARTNERS

SHARES AT COST
2007 R 31. PRINCIPAL SUBSIDIARIES Business Partners International (Pty) Ltd Business Partners Mentors (Pty) Ltd Business Partners Property Brokers (Pty) Ltd Business Partners Venture Managers (Pty) Ltd Business Partners Ventures 1 (Pty) Ltd Cussonia Trust (Pty) Ltd Finance for the Third Millennium (Pty) Ltd JRC Properties (Pty) Ltd Lindros Investments (Pty) Ltd Miriam Patsanza Property (Pty) Ltd Unitrade 106 (Pty) Ltd Share trust Franchize Partners (Pty) Ltd indirectly held 1 Business Partners International Madagascar Socit Anonyme indirectly held 2 Business Partners International Kenya Limited - indirectly held 3 100 100 100 100 100 3 100 100 4 000 1 000 100 2006 R 100 100 100 100 100 3 100 100 4 000 1 000 100 2007 R000 (32) (3 706) 1 497 693 (1 363) (89) 27 155 6 810 8 969
LOANS
2006 R000 84 394 1 778 693 (1 411) (763) 17 481 7 691 24 953
5 803
5 803
39 934
50 900
All subsidiaries are wholly owned unless otherwise stated. All holdings are in the ordinary share capital of the entity concerned and are unchanged from 2006.
1
Franchize Partners (Pty) Ltd is a wholly owned subsidiary of Business Partners Ventures 1 (Pty) Ltd. Business Partners International Madagascar Socit Anonyme is a wholly owned subsidiary of Business Partners International (Pty) Ltd. Business Partners International Kenya Limited is wholly owned by Business Partners Limited (5 percent shareholding) and Business Partners International (Pty) Ltd (95 percent shareholding).

2007 R000
2007
2006 R000
32. INTEREST IN JOINT VENTURES The Company has a 50 percent interest in a joint venture with ZASM. The following amounts represent the Company's share of the assets and liabilities and revenue and results of the joint venture, and are included in the consolidated balance sheet and income statement: Business investments Current assets Current liabilities Net assets Revenue Profit before taxation Taxation Net profit 1 103 4 489 (815) 4 777 515 773 (226) 547 1 559 3 103 (657) 4 005 480 330 (98) 232
82
BUSINESS PARTNERS
annual report
NOTICE CONVENING THE ANNUAL GENERAL MEETING

Notice is hereby given that the twenty-sixth Annual General Meeting of the Company will be held on Tuesday, 24 July 2007 at 15h30, in the auditorium of The Court House, 2 Saxon Road, Sandhurst, Sandton, to: 1. 2. 3. receive and adopt the audited annual financial statements for the year ended 31 March 2007. consider and pass special resolutions, with or without modification, to amend the Companys Articles of Association by inserting articles 15.5 and 15.6, which provisions were erroneously replaced when the existing articles 15.3 and 15.4 were inserted during 2001, in order to provide for: 3.1 the payment of additional remuneration to a director appointed as managing director or to any other executive office (article 15.5); and 3.2 directors to entrust and confer upon the managing director or other executive officer powers and authorities vested in them (article 15.6). 4. transact any other business that falls within the scope of the meeting.
elect directors (in terms of the Articles of Association, directors retire, but are eligible for re-election).
A member who is entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and speak on his/her behalf and, on poll, to vote in his/her stead. Such proxy need not be a member of the Company. By order of the Board of Directors
Ms C M Gerbrands Company Secretary 17 May 2007
CORPORATE INFORMATION
BUSINESS PARTNERS LIMITED
COMPANY REGISTRATION NUMBER 1981/000918/06
2007
TELEPHONE +27 (0)11 480 8700 FAX +27 (0)11 642 2791 E-MAIL enquiries@businesspartners.co.za WEBSITE www.businesspartners.co.za AUDITORS PricewaterhouseCoopers Inc. BANKERS ABSA Bank Limited Standard Bank of South Africa Limited
annual report
COMPANY SECRETARY Ms CM Gerbrands REGISTERED OFFICE 5 Wellington Road Parktown Johannesburg 2193 PO Box 7780 Johannesburg 2000
TRANSFER SECRETARIES Computershare Investor Services 2004 (Pty) Limited 70 Marshall Street Johannesburg 2001 PO Box 61051 Marshalltown 2107 SHARE TRADING Business Partners Limited shares can be traded by contacting the Company Secretary.
84
BUSINESS PARTNERS
A business model that assures another strong performance

Business Partners: 2007 Annual Report

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Business Partners: 2007 Annual Report

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Investing in entrepreneurs

ensures sustained economic growth

annual report 2007

Broad-Based Economic Empowerment Value added Statement FINANCIAL STATEMENTS

Financial and Corporate

Net profit per employee

Business investment approvals

Assets per employee

VISION, MISSION, GOALS AND VALUES

Our values are:

2007/2008 STRATEGIC FOCUS

Employer of Choice Initiative

The Corporate Structures are:

Expanding our investment in innovative entrepreneurs

FIVE YEAR SUMMARY

Mr Johann Rupert 1,4

Mr Theo van Wyk 1,2,3,4,5,6

Mr Div Geeringh 1,2,3,4

Dr Paula Huysamer 1,4,5,6

Mr Friedel Meisenholl 2,3

Mr David Moshapalo 3,4

Mr Themba Ngcobo 3,5,6

Dr Zavareh Rustomjee 1,2,4,5,6

Mr Xola Sithole 1,2,4

Mr Gerrie van Biljon

Mr Nazeem Martin (45)

Mr Ben Bierman (41)

Mr Christo Botes (46)

Mr Pierre Mey (46)

Ms Lorraine Nakene (31)

Mr Gerrie van Biljon (49)

Mr Willem Bosch (52)

Ms Petro Bothma (48)

Ms Marjan Gerbrands (33)

Mr Mark Paper (41)

Complete business solutions tailored to meet the specific needs of clients

Business Partners Limited (South Africa)

Distribution of investment by product

Dedicated to advancing South Africas entrepreneurs

Distribution of investment by product

Distribution of investment by product

Geographically-defined business units

Distribution of investment by province

Facilitating real empowerment through equity participation

Specialist Investment Funds

Distribution of investment by sector

Distribution of investment by sector

Business Partners International (Pty) Limited

PROPERTY MANAGEMENT SERVICES

PROPERTY MANAGEMENT SERVICES

Sectoral breakdown of portfolio

Property Ownership, Investment and Sales

Geographic Distribution and Penetration

PROPERTY MANAGEMENT SERVICES

Management fees received

TECHNICAL ASSISTANCE, MENTORSHIP AND CONSULTING SERVICES

Professional support services to facilitate ongoing business success

TECHNICAL ASSISTANCE, MENTORSHIP AND CONSULTING SERVICES

Objectives and Focus

The Role of Technical Assistance, Mentorship and Consulting

TECHNICAL ASSISTANCE, MENTORSHIP AND CONSULTING SERVICES

Stakeholders and Joint Ventures

Number of assignments completed

OPERATIONAL SUPPORT SERVICES