Annual Report 2011 - Vivo Energy energy... · For year 2011, Vivo Energy Mauritius Limited recorded...

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Vivo Energy Mauritius LimitedCemetery RoadRoche Bois Tel: (+230) 206 1234Fax: (+230) 240 1043www.vivoenergy.com

Annual Report 2011

Notes to the Financial Statements 1

Our Vision and Mission 3

Our Values 3

Chairman’s Message 4

Managing Director’s Report 5

Review of Operations 7

Aviation 7

Marine 7

Liquefied Petroleum Gas (LPG) 8

Retail 9

Commercial 10

Lubricants 11

Customer Service Centre 11

Product Supplies and Distribution 12

Human Resources 12

Health, Safety, Security and Environment 13

History of Vivo Energy in Mauritius 15

Directors’ Report 18

Secretary’s Report 21

Corporate Governance Report 22

Independent Auditor’s Report 45

Statement of Comprehensive Income 47

Statement of Financial Position 48

Statement of Changes in Equity 49

Statement of Cash Flows 50


Contents

Vivo Energy Mauritius Limited Annual Report 2011


Vision and Mission 3


2

We make the difference through our people, a team of

dedicated professionals, who value our customers, deliver on

our promises and contribute to sustainable development.

To safely market and distribute energy and petrochemical

products while offering innovative value added services.

Vivo Energy employees share a set of core values – honesty,

integrity and respect for people. We also firmly believe in the

fundamental importance of trust, openness, teamwork and

professionalism, and pride in what we do.

Vivo Energy’s key principles are:

• safety

• entrepreneurial flair

• ambition

• dynamism

• responsiveness

• empowerment

• social and ethical responsibility

• environmental care

Our Vision and Mission

Our Values

Vision

Mission


Chairman’s Message4


Managing Director’s Report 5

Chairman’s Message Managing Director’s Report

2011 has been an eventful as well as successful year.

Sales volumes were 15% better than 2010 thanks mainly to

Aviation and Marine. On an equally satisfying note, operating

profits have improved across the various segments of the

Company. Distribution costs were up by 16%, in line with

the growth in sales volumes, as cost efficiency continues to

remain a pillar inside the operating structure. Administrative

expenses have been contained to within 7% increase

compared to last year.

2011 has been a year of expansion and growth. We have

extended our retail network by opening a new service

station at Ebene. We have acquired a new barge, Tristar

Glory, to replace l’Ami Constant. I have full confidence that

these two investments will individually provide the building

blocks as we pursue our journey for sustainable growth.

We have a good safety record as a result of our proactive

management of all risks. We have had three incident-free

years in a row. We have once again successfully delivered

on our “Goal Zero” target as far as accidents and incidents

are concerned, causing no harm to people, assets and the

environment.

Our main achievement however remains the successful

transition from Shell Mauritius Limited to Vivo Energy

Mauritius Limited in 2011. After more than a year of hard

work, we officially left the Shell Group on 01 December

2011 to join Vivo Energy, made up of Vitol, Helios and Shell.

At the root of this seamless transition remains our open

communication to all our groups of stakeholders. Aware

that there would be questions asked and uncertainties

felt, we proactively and regularly engaged our employees,

customers, the authorities, the wider business community

and the public at large.

Indeed, the fact that 90% of our minority shareholders

remained with the new company is a mark of confidence

and trust in this new entity, Vivo Energy Mauritius Limited will

certainly be retaining what used to constitute our strengths:

its people, the Shell brand and our Shell products. Coupled

with the new shareholders appetite to grow in Africa, we

now have a useful combination of aspirations that is set for

exciting time to come. We have ended 2011 at the dawn

of positioning Vivo Energy as the most respected energy

company in Mauritius and Africa.

On this note, I would like to thank our stakeholders for

bearing patience with us. I have full trust that they will

manner. Indeed, the challenge in 2011 was to keep the

focus to maintain the “Business as Usual” mindset, whilst the

transformation was happening.

I would like to congratulate and thank the staff of Vivo

Energy Mauritius Limited under the leadership of Mr Pawan

Juwaheer for the dedication and professionalism with which

they have gone about their day to day business, never losing

sight of the key business priorities, with an unrelenting focus

on safety. I would like to thank the management for delivering

quality results. I also wish to thank the board of directors for

their guidance and direction towards Vivo Energy Mauritius

Limited.

Now it is the time for us all to move on, with a real sense

of optimism and excitement at the future. A future that

combines the strength of the Shell brand and products

for our consumers with the greater growth ambition and

aspiration of our new majority shareholders.

Looking ahead, we aim to remain the leader in safety, to

continue to add value to the business of our customers

while delivering profitable growth and creating greater value

for our shareholders. We will work to make Vivo Energy the

most respected energy business in Mauritius and in Africa, a

business where the best people want to work.

I look forward to our making it happen with enthusiasm,

commitment, creativity and with the ambition to win. I am

confident that we have the portfolio, people and capabilities

required to make the most of the opportunities ahead.

Honore Dainhi

Chairman

18 April 2012

I am happy and excited to join the board, and I am honoured to become the chairman. I look forward to working with all so that together we continue Vivo Energy Mauritius Limited’s successful journey.

For year 2011, Vivo Energy Mauritius Limited recorded a

30.2% growth in revenue from Rs 9,454 million in 2010

to Rs 12,313 million. The company’s profit after tax was as

good as in 2010, Rs 325 million in 2011.

2011 has been a very challenging year, on one hand

with the economic downturn and on the other with the

transition from Shell Mauritius Limited to Vivo Energy

Mauritius Limited. After weeks and months of hard work,

the transition occurred in the most seamless and successful


Chief Executive Officer’s Report6


Review ofOperations

Aviation

The aviation business has shown a good recovery on

profitability in 2011 compared to 2010. The general aviation

industry recovered in 2011 with more flights in Plaisance

though very far away from its peak in 2008. The industry

still faces many challenges and the sustained rise in fuel costs

is a constant issue to airlines.

Having won a major share of the Air Mauritius tender late

2010 contributed to an increase in volumes in 2011. Though

there is a high level of competition in the aviation business

in Mauritius, resulting to very low margins, these volumes

helped us to decrease our unit costs and reversed the

business financial trend.

The sales of Shell shares to Vivo Energy implied a change

in the strategy of the local aviation business. As from 1st

Dec 2011, the company is no more trading under the

Shell Aviation Brand but under the Vitol Aviation brand.

Vitol Aviation has been present in the Americas, North

West Europe part of Africa and part of Asia and has quite

some years of presence and is operating and exceeding

JIG requirements. Vitol Aviation has been first new entrants

in airports of Paris and London in the past 25 years and

has aggressive plans in place to grow the aviation business

worldwide.

With Vitol Aviation backing Vivo Energy, we look forward to

a promising year 2012.

Marine

Our strategy in Marine has once more paid off in 2011. We

have made a record year in profitability while maintaining

good volumes.

For the past 70 years, Vivo Energy Mauritius Limited

(formerly Shell Mauritius Limited) has been actively engaged

in the marine business and has operated a dedicated

bunkering depot in the heart of Port Louis. The State

Trading Corporation (STC) exclusively imports fuels within

Vivo specifications for fuel oil and gas oil. Our customers

can obtain a certificate of quality upon request after

recertification in an approved laboratory.

Our aim at serving our customers with quality recertified

products, ensuring availability of products both marine

gasoil, marine fuel oil and a range of marine lubricants, at an

optimum price, serviced either through the quays or through

our barge, L’Ami Constant, whichever is more convenient to

the customer has proved to be a winning formula. We have

also seen a regain in activities at the port with more vessels

coming in for different purposes and at the same time, the

local marine business improved with more fishing vessels

calling at Port Louis and new players getting in the fishing

activities around Mauritius.

There has been a major change in the business model of

the Marine business with the sales of Shell shares to Vivo

Energy. Traditionally, local customers place their orders

directly with the company (formerly Shell Mauritius Limited)

while the internationally contracted customers place their

orders through the Shell group marketing network of Shell

Marine Products based in London, Singapore, Rotterdam,

Cape Town, Oslo, Tokyo, Hong Kong, South Korea and

various other marine locations. This has changed whereby

all customers now place their orders directly to Vivo Energy

Mauritius Limited (formerly Shell Mauritius Limited). We are

pleased to announce that despite this major shift in the way

of doing business, we have been able not only to maintain

but to increase our customer portfolio. End users of our

international customer base are mainly tankers, containers,

cruises, feeder vessels, fishing fleets and cargo vessels.

keep collaborating for the betterment of the company. In

particular, I am grateful to our staff for their full support and

enthusiasm during the transition process.

We hold responsible citizenship close to our hearts and

have worked with the community in the fields of education,

sports, civic responsibility and environment. We worked

with local communities and the authorities on a national

education campaign to sensitize the general public on safety

precautions when using gas for domestic and automotive

purposes. We sponsored lifeskills training to vulnerable

children in partnership with the NGO, Junior Achievement

des Mascareignes. We supported the development of sports

through our contribution to Club Maurice for the Indian

Ocean Islands Games. Our commitment to environment

protection remains high on our agenda. We continued with

our projects of embellishment of Roche Bois area and the

rehabilitation and development of the Rivulet Terre-Rouge

Estuary Bird Sanctuary.

I encourage you to explore the highlights of our activities

and outcomes that contributed to the success of Vivo

Energy Mauritius in 2011.

Last but not least, I’d like to thank the outgoing Board

Chairman, Mamadou Sene for his invaluable guidance and

steer provided during the last five years. I wish him luck in

his future endeavours.

It is also with pleasure that I welcome our new Chairman,

Honore Dainhi. Honore Dainhi holds the position of Chief

Operating Officer of Vivo Energy. He has successfully grown

the business in a variety of roles and geographies. He brings

added value with his wealth of experience, new outlook and

vision. I look forward to having him aboard as we continue

to grow the company.

Finally, a special word of thanks to the board of directors for

their continued support.

Pawan K Juwaheer

Managing Director

April 20, 2012


Review of Operations8



We presently offer quite a few advantages to our customers

for the safe supply of marine fuels and lubricants, namely:

• having an overall storage capacity of over 38,000 metric

tons, making Vivo Energy Mauritius Limited (formerly Shell

Mauritius Limited) having the biggest storage capacity in

the country;

• supplier of a “recertified” marine fuel oil by an independent

and accredited international laboratory;

• having access to various quays A, D, E and Trou Fanfaron

fish quay;

• operating a barge in Port Louis delivering fuels and

lubricants to ships at all other quays including container

terminals and also at anchor outside of the harbour;

• owning a dedicated bunkering depot in Port Louis located

adjacent to the main harbour;

• using two private quays at Froid des Mascareignes

comprising five bunkering points; and

• marketing a wide range of marine lubricants.

We remain fully engaged in implementing our bunkering

strategy as Port Louis increases its traffic and expands as a

regional and strategic port. We are extending our pipeline

for bunkering along other quays 1 - 4 namely. The long going

project of replacing L Ami Constant with a double hull barge

has finally materialized. As from January 2012, we will be using a

newly built barge, TriStar Glory, for our bunkering activities. This

vessel is state of the art and provides all modern facilities for a

safe, efficient bunkering activity. As such, we are providing L Ami

Constant, after 41 years of loyal service, a well deserved rest.

Thank you L Ami Constant.

Liquefied Petroleum Gas (LPG)

LPG is still, by far, a competitive source of energy for

domestic applications as compared to electricity. It is also an

environmentally friendly product as well as a convenient and

clean source of fuel for a number of industrial applications

including use in the textile, hotel and food sectors. Overall

volume improved slightly last year mainly propelled by the

growth in the domestic sector even if the LPG sector is

facing fierce competition from solar in both domestic and

the hotel sector for water heating purposes.

Shellgas has a wide distribution network which consists of

some 900 resellers throughout the island. In addition, we

provide a home delivery service in selected regions through

a network of resellers. As usual we also offer a variety of

cylinder sizes for various applications: 12kg and 5kg for

domestic purposes; 50kg for both domestic and industrial

applications and 12/15kg for forklift applications.

Installation services for domestic hot water or industrial

applications are provided through a number of professional

contractors who are trained and certified by Shellgas. This

ensures that all installations carried out by our contractors

are in conformity with international standards. In order

to sensitise the public for the need to comply with safety

requirements, a number of safety workshops and seminars

were organised for both the resellers and end consumers.

Shell autogas was introduced in 2001 as it offers a cheaper

alternative to motorists and brings in a number of benefits

to the environment because of cleaner emissions. Despite

the fluctuating prices, autogas still remains competitive as

compared to motor gasoline but it still high compared to

fuel oil. There is a large gap in price between the subsidised

domestic cylinders and autogas. This has resulted in a

number of motorists starting to decant subsidised LPG

from cylinders into their cars using unsafe equipment. As

a result of this illegal practice in 2011, autogas volume has

declined in our stations. This practice is very dangerous and

after the issue had been addressed with the authorities, a

new legislation has come into force since1st February 2012

about the use of 12kg cylinders exclusively for domestic

purposes.

volume on the last quarter was slightly below 2010, giving

some indications of an economic slowdown. Moreover, the

industry landscape has had also some major changes with

a new entrant on the market, increased competition with

strong tactical promotions.

As for retail, we were able to reach 99% of our targeted

volumes. The year was dense and rich in efforts and actions,

where attention was given to each of the pillars making the

foundations of the business.

Starting with Health, Safety, Security and Environment

(HSSE), we continued training and raising competencies

of forecourt staff, contractors and customers with the aim

of developing a safe attitude in the handling of petroleum

products. We pursued “Talk not Tick” initiatives, engagement

sessions, sharing of best practices, in order to enhance their

knowledge and capabilities. We ran the campaign “Don’t

fool with fuel” on the whole network. This year again, we

achieved goal zero (“zero incident, zero accident”).

In relation with marketing activities, we organized the

“Shell Fuel Save Challenge” among drivers from both

private companies and members of the public. Under the

supervision of SGS, the participants drove a 100-kilometre

track across the island, representative of the local driving

conditions (mix of urban and extra urban conditions).

They realized an outstanding performance in terms of fuel

economy using Shell fuels and Shell economy driving tips.

The average savings against car manufacturers’ specifications

were established at 35% using Shell Unleaded and Shell

Diesel Extra.

During our numerous road shows in different parts of

the island, we also took advantage of communicating the

benefits of Shell fuel economy products and disseminating

safe and fuel economy driving tips.

Our effort to invest in this sector is aligned with the concept

of ‘Maurice, Ile Durable’. The Shell autogas network today

comprises eight retail outlets namely: Lataniers (Port Louis),

Roadway (Port Louis), Goodlands, Emeralda (West coast),

Saint Jean (Belle Rose), Floreal, Pineview (La Vigie) and Bel Air.

Energy Storage Company Limited

Energy Storage Company Limited (ESCOL) is a 50:50 joint

venture, with Vivo Energy Mauritius Limited and Total. The

company has a mounded storage capacity of 3,000 metric

tons split in 6x500 metric tons tanks built with best practice

technology and which offers safe storage of LPG. The main

purpose of ESCOL is to allow larger tankers to supply LPG

to the country thus reducing unit freight cost. The contract

with STC for the handling, receipt and storage of LPG came

to an end in December 2009 and has been renewed for a

further five years. In order to adapt to changes in the port

area, a new pipeline was commissioned in February 2010 to

connect the new oil jetty with ESCOL.

Retail

Retail markets Shell products through its well distributed

network of 42 Shell service stations. Shell fuels are the

sole differentiated fuels being offered to customers: Shell

Unleaded Extra and Shell Diesel Extra with fuel economy

formula are designed to run extra kilometers, ensuring better

efficiency and protection to engines, compared to ordinary

fuels. We also offer Shell Autogas, Shell Lubricants and Shell

Gas. Shell Card is an easy-to-use, convenient and secured

payment card which ensures an efficient monitoring of fuel

expenses. Our Select and Shell Shops offer convenience

retailing for quick purchases.

The retail industry registered a growth in 2011, but which

was overall below 2010 and 2009. Noticeably, the industry





With regards to operational excellence, we introduced

a new program “Mystery Motorist Program” whereby

an independent mystery shopper rates the service level

delivered on our forecourts and in our shops. This program

contributed in sustainably enhancing the service given to

our customers. Besides, we spent dedicated resources in the

training of our retailers, quality marshalls and forecourt staff.

As for the network, we invested a total amount of MUR 60M

in the infrastructure. We opened our 42nd retail outlet, Shell

Ebène Service Station, located in the Cybercity area on Rose-

Hill along Réduit road. We also carried out brand upgrade

works on the whole network. Upon works completion,

Shell Brands International rated the overall network with a

score of 97%, the best rating in Africa. Extension works and

canopy installation initiated on other sites in end 2011 will be

completed during the first semester 2012.

Shell Card registered a good growth especially in the last

quarter when we achieved the best volume ever recorded,

despite a tougher environment.

Overall, the 2011 retail financial performance was beyond target.

2012 prospects are surrounded by more uncertainty.

Export-oriented industries are facing greater challenges

with shrinking revenues due to Eurozone crisis. Many local

businesses are having more difficulty in accessing funds to

sustain their development. GDP growth and inflation will be

key to the retail industry dynamics.

Whichever the scenario is, the foundations are in place for

retail and the team will show the same dedication to grow

the business beyond plan.

Commercial

Safety PerformanceHSSE continues to be the number one priority for the

F&B business and our licence to operate. Our customers

tremendously value our contribution to their business in

terms of increasing their teams’ HSSE awareness.

Business Performance2011 was a difficult year for the F&B business, with limited

visibility on orders for the textile and manufacturing sectors.

However, several of our customers have diversified their

activities towards new export markets hence resulting in

subdued growth. The business was also negatively impacted

by the loss of a major Government transport tender.

Enhanced Partnership with our Valued CustomersWith the restructuring of the F&B sales team, we continued

to deliver value to our customer’s business as evidenced by

several testimonials signed by our major customers. Several

customers have placed their trust in Vivo Energy again as

evidenced by major contracts that have been renewed this

year. Several customers also participated actively in initiatives,

such as Customer Week. Our customers have continued to

positively benefit from our range of differentiated fuels with

demonstrated benefits. The transition to Vivo Energy was

smooth with numerous face-to-face and group engagements

with our valued customers.

Lubricants

Despite economic challenges, the Lubricants business

has exceeded its targets in terms of volumes and shown

excellent results in 2011. The business has maintained its

clear leadership in the automotive market helped by the

excellent growth in the automotive sector with Helix and

Rimula remaining the preferred lubricants brand of vehicle

owners.

The transition to Vivo Energy was a real success and

customers were extremely delighted that the Shell brand is

remaining in the local market.

The continued efforts of the whole sales team now fully

structured around the essential Sales First tools, on the field

as well as in the office led to some key customer acquisitions

while many customers renewed their trust in Vivo Energy as

their lubricants supplier. Moreover, the numerous targeted

marketing initiatives were also key to the excellent 2011

results.

The Lubricants team maintained the focus on the Health,

Safety, Security and Environment (HSSE) aspect and once

more, no incident was reported and the target of “zero

incident” was achieved. On and above more customer HSSE

trainings and lubricants site audits held, the team also shared

HSSE “Hearts and Minds” tools with key distributors and

resellers hence reaching a maximum of channel players.

Shell Lubricants has been elected the clear

world leader for the fifth year in a row1. This

further motivates the local Lubricants team

to face the 2012 challenges to maintain Shell

lubricants as the market leader in transport

and consumer lubricants sector.

Customer Service Centre

The Customer Service Centre (CSC) was launched in 1997.

Since then, our CSC has gradually become key to the day-to-

day business activities of the company.

Our CSC is a one-stop shop for our valued customers.

Through a call centre, we provide basic services, namely order

taking from both retail and commercial customers for fuels

and lubricants, complaints handling, invoicing and responding

to queries on customer accounts.

Over the years, we upgraded and extended our services to

include debtor follow up, maintenance calls management,

lubricants and LPG milk-run delivery scheduling and planning

and telesales/telemarketing support to other businesses.

Our CSC receives about 80,000 calls a year. These are handled

by our trained agents who have been empowered to act

as business and service focal points for HSSE, Commercial,

Lubricants, LPG, Aviation and Marine.

CSC Mauritius has been scoring more than 99% in the customer

satisfaction index surveys since 2008 and is maintaining this

high score. Furthermore, we are the only operating unit in

Africa to deliver consistently on all our targets since 2007 and

ended the year once again ahead of all the African countries.

We face an ever-growing demand for services both internally

and externally. Our prime objective is to bring continuous

improvement to our service to distinguish ourselves on the

market and satisfy our customers through service excellence.

Vivo Energy Mauritius Limited is the only petroleum company

operating such comprehensive customer service in the country.

To that effect, we are continuously revisiting our processes

and striving to maintain high performance through focus and

emphasis on people development and staff motivation.

1 : Source: Kline & Company, Competitive Intelligence for the Global Lubricants Industry, 2008–2018.).





Supplies

Vivo Energy Mauritius Limited co-ordinates the replenishment

programme on behalf of the oil industry with the State

Trading Corporation (STC) for both main products and LPG.

Some 66,000 metric tons of LPG and 897,000 metric tons

of main products were imported in 2011. LPG is received in

consignments of 2,000-3,000 metric tons from LPG tankers;

white and black oils are received in 60,000 metric ton

tankers, combining oil industry and Central Electricity Board

requirements, after the commissioning of the new oil jetty in

November 2008 and the coming into operation of Red Eagle,

the Mauritian owned oil tanker.

Vivo Energy Mauritius Limited purchases from STC in 2011

amounted to 319,000 metric tons for main products and

32,000 metric tons for LPG, representing 35% and 48% of total

trade respectively.

The Shell group “SAFE” system for vetting tankers is

systematically utilised to ensure suitability of all vessels before

loading. Sub standards vessels are therefore avoided, thus

ensuring a better protection for Mauritian shores.

Distribution

Vivo Energy Mauritius Limited owns and operates two depots,

namely Roche Bois and Causeway. Roche Bois is mainly used

for the storage of white oils and includes an LPG depot with a

semiautomatic cylinder filling plant, as well as packed lubricants

stores. Causeway depot is essentially for the storage and

distribution of fuel oil to both marine and industrial customers.

These two depots constitute a storage capacity of 23,000

metric tons for white oils, 16,000 metric tons for black oils and

1,200 metric tons for LPG, representing 32%, 54% and 20%

respectively of total oil industry storage capacity in Mauritius.

Besides these two depots, Vivo Energy Mauritius Limited

operates three other depots on behalf of the oil industry, one

at Fort William for the storage of fuel oil on behalf of the

Central Electricity Board, the second one in Rodrigues Island,

and thirdly, a joint venture LPG storage, ESCOL, of 3,000

metric tons capacity, in which Vivo Energy Mauritius Limited

owns 50% equity.

Distribution to retail outlets, industrial customers and the

airport is effected by a fleet of 11 bulk delivery vehicles for

white oils and black oils. A fleet of 15 vehicles distributes

LPG cylinders across the island to retailers, while bulk LPG

is delivered through three specialised vehicles. Deliveries to

marine customers are effected either through bunkering barge

or through pipelines at quays.

Replacement of the bunkering barge with a new double has

been completed in 2011.

Human Resources

TalentMauritian talents continue to be recognised by the region. As

at end December 2011, 11% of our total workforce i.e. 13

out of 121 employees were holding regional positions from

Mauritius. In addition, two other Mauritians were in expatriate

assignments in Madagascar and South Africa; of which Pramoth

Domun, our previous B2B Manager, who in 2011 went to

Madagascar as Managing Director.

Change ManagementIn order to assist our people embrace the transition to Vivo

Energy, ‘Managing Change’ sessions were held for all the

employees. The sessions helped our people to effectively

manage the emotions linked to the change and helped them

articulate the benefits of the change. As such, despite the

uncertainty linked to the transition, our people remained

committed, focused and dedicated.

ResourcingDuring 2011, we welcomed seven newcomers in our

organisation. Two of them joined the Retail Department, two

others joined the Distribution Department and the remaining

three the B2B Department. The newcomers brought with them

a wealth of experience, skills and competences from different

fields, acquired either in Mauritius or abroad.

Learning and DevelopmentDuring 2011, the average training days per employee was 3.5

days with learning programmes ranging from HSSE, customer

service, compliance, media training to name a few.

Health, Safety, Security and Environment

Vivo Energy Mauritius Limited operates under a common set of

business principles, supported by policies and business controls.

These include a Health, Safety, Security and Environment (HSSE)

Policy and Commitment, which require that our company shall

have a systematic approach to HSSE management. We have

put in place a mandatory procedure for an HSSE Management

System (HSSE MS), which is a structured set of controls for

managing the business and to ensure and demonstrate that

business objectives are met. This management system takes into

account HSSE MS implementation requirements, incorporated

in the business level HSSE MS as well as the various classes

of business HSSE MSs relevant to our operations. Classes of

business are distribution, aviation, marine, business-to-business,

LPG and retail. The elements of this management system are

organised according to the Vivo Energy guidance of how to

integrate HSSE into the business and manage HSSE matters as

any other critical activity. In line with our HSSE policy to achieve

continuous performance improvement, the individual classes of

business action plans have been well observed and completed.

An HSSE community has been built up, comprising staff holding

HSSE critical positions, to motivate better our employees,

contractors, retailers and customers at large. Our motto is

“Together, we continue to make our company safer”. This

is what motivates us at Vivo Energy Mauritius Limited, to

strive hard to make things happen. The HSSE community

has the full support of the Country Coordination Team who

continuously demonstrates their leadership and commitment,

thus enhancing HSSE culture and maintaining high standards of

HSSE performance.

Safety daySafety day was celebrated on 12 June 2011 with the participation

of both employees and contractors. The objectives of the day

were spelt out, namely re-commitment to ‘Do the Right Thing -

Today and Everyday’, to make it personal and to improve focus

on HSSE during the year, understand what makes a good and

HSSE performance 2009-2011

2009 2010 2011

Fatality zero zero zero

Total Recordable Cases zero zero zero

Total Recordable

Occupational Illness

Frequency zero zero zero

Exposure Hours 700,000 600,000 571,000

Lost Time Injury zero zero zero

Spills NIL NIL NIL

Kilometres driven 2, 321,000 2,100, 000 1, 997,000

Vivo Energy Mauritius Limited Annual Report 2011Vivo Energy Mauritius Limited Annual Report 2011


bad driver, how to be a good passenger and pedestrian, adopt

good practices and reduce the number of road and workplace

accidents and most importantly making things happen on

the ground through toolbox talks. Staff and contractors were

requested to gear their toolbox talk presentations on the safety

issues encountering at the moment or that issues they are

anticipating in upcoming jobs.

The session ended with staff and contractors HSSE recognition

and close out by the Managing Director. Follow up after safety

day is paramount. We need to find time to reflect on how

everyone will ensure they are doing the right thing. This will

definitely help to make our journey to goal zero a reality.

Goal zero initiativeSafety is a deeply held value, integral to our values of honesty,

integrity and respect for people. It means relentlessly pursuing

no harm to people and no significant incidents. Goal zero shifts

the way we think and act. We firmly believe that goal zero is

possible.

Life-saving rulesFar too many people still get hurt while working for Vivo

Energy. This is not acceptable and we must never make it seem

an inevitable consequence of working in dangerous industry.

By introducing the twelve life-saving consistent set of rules to

our staff, retailers and contractors, we believe that things will

be done differently by instilling the compliance culture. Twelve

high-risk operations at work have been identified and the aim

is to prevent harm to people. Each reported non-compliance

is now investigated and failure to comply results in discipline

and up to termination of employment or discharge in case of

contractors. Supervisors are held accountable to communicate

and ensure compliance. Employees and contractors comply

because it is the right thing to do and it saves lives. We must

adopt the principle of zero tolerance for non-compliance. If

anyone intentionally breaks any of our life-saving rules, that

person chooses not to work for Vivo Energy.

The Shell Company of East Africa Limited started its marketing

operations in Mauritius in 1905 through its managing agents,

Blyth Brothers and Company Limited. As such, Shell was the

first international oil company to set up business on the island

and its close partnership with Blyth has been the cornerstone

of a successful development. Most of the sites of current

service stations, depot and customer portfolio were acquired

during this time.

As part of a regional corporate reorganisation in the late

1950s, the Shell Company of East Africa was replaced by the

Shell Company of the Islands Limited, a branch of a company

incorporated in the United Kingdom. After the irreversible

turmoil on the international oil scene in the early 1970s and

recognising the need for oil companies to have their own

identity and direct dialogue with Government, Shell and Ireland

Blyth Limited, who was then the oldest Shell agents in the

world, negotiated the terms of the agency agreement. In 1976,

therefore, Shell took over its own business management in

Mauritius, directly promoting its activities, engaging its own staff

and opening its own offices.

As a result of a decision made by the Shell and BP groups to

deconsolidate their joint business interests in Africa in 1982,

BP Ocean Islands Limited’s activities in Mauritius were taken

over by Shell to become Shell Ocean Islands Limited. Both The

Shell Company of the Islands Limited and Shell Ocean Islands

Limited were given the status of a Public Limited Company (plc)

as a result of a change in British Company Law. On January

1st 1991, the businesses of the local branch of both The Shell

Company of the Islands plc and Shell Ocean Islands plc were

transferred to a locally incorporated company, Shell Mauritius

Limited, in exchange for shares in the latter. This change in

corporate structure underlines Shell’s confidence in the future

of Mauritius and the current shareholders’ desire to further

consolidate Shell’s association with the island. In addition, the

newly incorporated company was floated on the Mauritian

Stock Exchange and the Mauritian public currently owns 25%

of its shares.

On 30 November 2011, Vitol, Helios and Shell finalised the

acquisition of the majority shareholding in Shell’s downstream

business in Mauritius as well as six other countries: Cape Verde,

Madagascar, Mali, Morocco, Senegal and Tunisia. This marked the

beginning of Vivo Energy Mauritius Limited.

During its 107-year presence in Mauritius, Vivo Energy has built

up a comprehensive business network in the energy scene,

backed up by strong infrastructural investments, good technical

know-how and professionalism. Vivo Energy Mauritius Limited

accounts for nearly half of the imported energy demand of the

island and is present in all sectors of this business activity.

Vivo Energy Mauritius Limited is a leader in the provision of both

automotive fuels and lubricants to the Mauritian downstream

market through its extensive network of service stations,

business-to-business commercial clients and aviation fuel at

Plaisance airport. It supplies both national and international

shipping with bunker fuels and lubricants at Port Louis and the

surrounding area.

Vivo Energy Mauritius Limited is a large supplier of Liquefied

Petroleum Gas (LPG) in the country, which is used for both

domestic cooking purposes and commercial uses. In order

to ensure continuity of supplies of this essential product for

the country and also to have tonnage available for export to

other countries of the region, Vivo Energy Mauritius Limited

has effected a substantial investment in 3,000 metric tons of

storage capacity at Roche Bois through its joint venture, Energy

Storage Company Limited.

Global Environmental StandardsWe all strive to have an environmental performance we can

be proud of. We have in place a system for reporting and

investigating environmental incidents and we have completed

a risk-based assessment of our sites and all actions have been

closed.

Competence assessmentPeople are one of the key barriers we have in place to mitigate

risks. We want to assure ourselves that the people barriers are

robust and competent to do this important job. We want to

be able to provide assurance that:

• An employee is competent for the job or task they are

performing

• We know they are competent through testing and recorded

outcomes

• The tests we use are valid, reliable, and recognized by

regulators, stakeholders, and other external parties

Our predominant focus is on proficiency level “skill”.

HSSE Culture LadderTaking on board initiatives started during previous years and

with the commitment of all staff and contractors, Vivo Energy

Mauritius Limited has reached the proactive level on the HSSE

culture ladder.

6. History of VivoEnergy in Mauritius

Shell Mauritius Limited Annual Report 2011



Financial Statements


Directors’ Report18


Directors’ Report 19

DIRECTORS’ REPORT

The directors present their annual report and the audited

financial statements of Vivo Energy Mauritius Limited (formerly

Shell Mauritius Limited) (the “Company”) for the year ended

31 December 2011.

PRINCIPAL ACTIVITIES

The Company’s principal activity is the marketing and

distribution of petroleum products. Its joint venture, Energy

Storage Company Limited, is involved in the provision of LPG

terminal usage facilities.

CHANGE OF NAME

During the year, the Company changed its name from Shell

Mauritius Limited to Vivo Energy Mauritius Limited.

RESULTS AND DIVIDENDS

The Company’s profit for the year is Rs 324,860,000

(2010 - Rs 324,923,000).

The financial statements of the Company for the year ended 31

December 2011 are set out on pages 47 to 88. The auditor’s

report on these financial statements is on pages 45 and 46.

DIRECTORS

The directors of the Company since 01 January 2011 and at

the date of this report are:

Mr Mamadou Sene (resigned on 15 December 2011)

Mr Pawan K Juwaheer

Mr Patrick Crighton

Mr Roger K F Leung Shin Cheung

Mr Antoine Delaporte

Mr G Honore Dainhi (appointed on 29 February 2012)

CONTRACTS OF SIGNIFICANCE

Until 30 November 2011, the only contracts of significance

between the Company and its related partners were:

(a) a Cost Contribution Agreement for Business Support

Services and Research and Development and Technical

Support Services, and

(b) a Management Advisory Services Agreement,

both with Shell International Petroleum Company, a subsidiary

of the ultimate parent.

With effect from 01 December, the company entered into the

following contracts with related parties:

(a) licence agreement for the branding of retail automotive

fuel sites and other assets with Shell Brands International

AG; and

(b) contract for the provision of services with Africa

Downstream Oil Products (Proprietary) Limited.

The Company declared and paid thefollowing dividends during the year:

Dividend per share

2011 2010

Rs Rs

Declared on:

25 March 2011 6.10 5.00

22 November 2011 5.00 5.00

11.10 10.00

For the year ended 31 December 2011, the Company

made a profit of Rs 11.08 (2010 – Rs 11.08) per share and

declared a total dividend of Rs 5.00 (2010 - Rs 5.00) per

share of which Rs Nil (2010 - Nil) was paid during the year.

Subsequent to the year end, the company has through a

board resolution dated 26 March 2012 declared a final divi-

dend of Rs 6.10 ( 2010:Rs 6.10) per share.

DIRECTORS’ REPORT (CONTINUED)

STATEMENT OF DIRECTORS’RESPONSIBILITIES IN RESPECT OF THEFINANCIAL STATEMENTS

Company law requires the directors to prepare financial

statements for each financial year which present fairly the

financial position, financial performance and cash flows of the

Company. In preparing those financial statements, the directors

are required to:

• select suitable accounting policies and then apply them

consistently;

• make judgements and estimates that are reasonable and

prudent;

• state whether International Financial Reporting Standards

have been followed, subject to any material departures

disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis

unless it is inappropriate to presume that the Company will

continue in business.

The directors confirm that they have complied with the above

requirements in preparing the financial statements.

The directors are responsible for keeping proper accounting

records which disclose with reasonable accuracy at any time

the financial position of the Company and to enable them

to ensure that the financial statements comply with the

Mauritian Companies Act 2001. They are also responsible for

safeguarding the assets of the Company and hence for taking

reasonable steps for the prevention and detection of fraud and

other irregularities.


Directors’ Report20


Secretary’s Report 21

MAJOR SHAREHOLDERIn February 2012, Vivo Energy Mauritius Holdings BV

(Netherlands) bought 631,627 shares from minority

shareholders and as a result, holds 22,623,316 shares (77.15%)

at the end of February 2012.

SEGMENTAL ANALYSISA business segment analysis of sales and results is given in Note

5 to the financial statements.

SERVICE CONTRACTSMessrs Patrick Crighton and Pawan K Juwaheer have service

contracts without an expiry date.

Service contracts of other directors are terminable with a 3

months’ notice period by either party.

DIRECTORS’ INTERESTSThe directors have no interests in the ordinary share capital of

the Company, either directly or indirectly.

THREE YEAR SUMMARYA three year financial summary is set out in Note 29 to the

financial statements.

DONATIONSDuring the year, the Company made donations of Rs 69,370

(2010 - Rs 106,350).

AUDITOR

The fees charged by the auditor, PricewaterhouseCoopers, for

audit and other services were:

2011 2010

Rs’000 Rs’000

Statutory audit 1,746 2,008

Audit related services 630 600

PricewaterhouseCoopers has indicated its willingness to

continue in office and will be automatically reappointed at the

Annual Meeting.

Approved by the Board of directors on 26 March 2012

and signed on its behalf by:

}

}

} DIRECTORS

}

SECRETARY’S REPORT TO THE MEMBERS OFVIVO ENERGY MAURITIUS LIMITEDUNDER SECTION 166(D) OF THE COMPANIES ACT 2001

We certify that we have filed with the Registrar of Companies all such returns as are required of

the Company under the Companies Act 2001.

Executive Services Limited

As per Christian Angseesing ACIS

CORPORATE SECRETARY 26 March 2012

DIRECTORS’ REPORT (CONTINUED)

Vivo Energy Mauritius Limited Annual Report 2011 Vivo Energy Mauritius Limited Annual Report 2011


MAURITIUS CODE OF CORPORATE GOVERNANCE COMPLIANCE

The disclosures contained in this report are intended to

provide the reader with a description of Vivo Energy

Mauritius Limited (formerly Shell Mauritius Limited)

corporate governance policies and practices. The directors

firmly believe in and support high standards of corporate

governance, which are critical to our business integrity.

The Board confirms compliance to the Mauritius Code of

Corporate Governance.

HOLDING STRUCTURE

BOARD OF DIRECTORS

The Board of directors of Vivo Energy Mauritius Limited

(formerly Shell Mauritius Limited) remains stringent when

it comes to upholding the highest standards of integrity

and transparency in their governance of the company.

The importance and the value of a balanced interplay

between directors, management and shareholders within

the company has long been a major principle governing the

conduct of Vivo Energy Mauritius Limited (formerly Shell

Mauritius Limited).

A Board of directors consisting of five directors manages

Vivo Energy Mauritius Limited (formerly Shell Mauritius

Limited). Directors are appointed at the annual meeting of

shareholders. They hold office until they retire or submit

their resignation, unless removed earlier from office by the

annual meeting of shareholders.

The board delegates the day-to-day running of the company

to the Managing Director. The board delegates operational

issues to the management team and is directly accountable

to the shareholders for the performance of the company.

During the year ended December 31, 2011, ten board

meetings were held.

The offices of Chairman and Managing Director were

separated on November 17, 2003 in order to align

board governance with the Mauritius Code of Corporate

Governance. A Non-executive Director occupies the Office

of Chairman and an Executive Director occupies the office

of Chief Executive. The Chairman and Managing Director

ensure that the members of the board receive accurate,

timely and clear information.

HVInvestments BV

(Netherlands)

80%

Shell OverseasInvestment BV

(Netherlands)

20%

Vivo Energy Holding BV(Netherlands)

100%

Vivo EnergyMauritiusHolding BV(Netherlands)

75%

LocalShareholders

25%

Vivo EnergyMauritius Ltd

CorporateGovernance Report

Profile of directors

OUTGOING CHARIMAN INCOMING CHARIMAN

Mr Mamadou Sene, aged 48(resigned on 15 December 2011)

Chairman and Non-Executive Director

Honore Dainhi, aged 45(appointed on 29 February 2012)

Chairman and Non-Executive Director

CORPORATE GOVERNANCE REPORT (CONTINUED)

Mamadou Sene joined Shell in 1993 in Senegal from

Ernst and Young. During the last 17 years, he has held

various positions in operating units and central offices. He

worked in Finance in Senegal then in Mali before taking

the responsibility of Commercial Manager and Country

Chair in Mali. Thereafter, he moved to London to join the

Oil Products Finance Planning and Business Performance

department in Shell Centre. Before taking his current role

of Sales and Operations Vice President South East Africa

Oil Products, he was leading the Planning and Business

Performance department for Shell Oil Products Africa.

Honore Dainhi joined Shell in Cote D’Ivoire 1996 as Retail

Sales & Operations Manager. In 1998, he was promoted to

Retail Manager. Between 2000 and 2001, he was appointed

Audit Manager for Global LPG based in London. For part

of 2002, he was Retail Business Advisor for the South Zone/

Africa Retail Core Team. Between 2002 and 2004, he took

the job of Regional Retail Manager for West & Central

Africa covering 600 retail stations & 110 staff spread in

13 countries. In 2004, he moved to The Hague where he

took the job of Senior ID Adviser for Sub-Saharan Africa. In

2006, he was appointed Regional Vice-President for West

Africa where his main responsibilities were to oversee

SOPAF business in 8 countries across West Africa and

provide strategic/tactical direction to the various operating

companies. Since December 2011, he was appointed Chief

Operating Officer of vivo Energy.

Mr Dainhi holds an Engineering degree in electronics from

Ecole Nationale Supérieure d’Electronique et de Radio-

électricité’ (ENSERB): engineering school in Bordeaux

(France). In 1990, he completed a post-graduate degree

in international business management (specialisation in

marketing/sales management) - ‘Ecole des Hautes Etudes

Commerciales’ (EDHEC): business school in Lille (France)

In February 2012, Vivo Energy Mauritius Holdings BV bought

631,627 shares from minority shareholders and as a result,

holds 22,623,316 shares (77.15%) at the end of February 2012.


Corporate Governance Report24



Mr Patrick Crighton, aged 52Executive Director and Finance Manager

Mr Antoine Delaporte, aged 51Independent and Non-Executive Director

Mr Roger Leung (aged 65) Independent and Non-Executive Director

CORPORATE GOVERNANCE REPORT (CONTINUED) CORPORATE GOVERNANCE REPORT (CONTINUED)

Fellow of the Association of Chartered Certified Accountants, Mr Crighton joined

Vivo Energy Mauritius Limited (formerly Shell Mauritius Limited) in January 1987

as Management Accountant. Thereafter, from 1989 to 1993, he occupied the

position of Legal and Tax Accountant before taking over the position of Treasury

and Corporate Accountant up to 1995. He was then appointed Credit Manager and

in 1997 became a member of the JD Edwards team before being the Corporate

Accountant. In 2001, Mr Crighton was appointed Finance Manager. Mr Crighton

is also the holder of a Masters in Business Administration from Napier University.

On January 18, 2005, he was appointed a director of Shell Mauritius Limited (now

Vivo Energy Mauritius Limited) and since October 29, 2009, he is also a Director of

Societe Malgache des Petroles Vivo Energy (formerly Societe Malgache des Petroles

Shell).

Associate of the Chartered Institute of bankers in UK and a fellow member of the

Mauritius Institute of Directors, Mr Leung has been appointed a director of Vivo

Energy Mauritius Limited (formerly Shell Mauritius Limited) on June 30, 2006. He

retired from Barclays Bank in September 2005 as Regional Corporate Director. He

has been trustee of the Barclays Employees Pension Fund and a director of the

Barclays Leasing Company (Mauritius) Limited. Mr Leung is now a director of MDIT,

IPRO Fund Ltd and Bank One Limited. He presently works as Consultant in business

restructuring and performance optimisation.

Antoine Delaporte was appointed a director of Vivo Energy

Mauritius Limited (formerly Shell Mauritius Limited) on June

30, 2006. He is the founder and Managing Director of I&P

Management Limited, a private company managing private

equity funds in Africa. Since 2000, he is also Chairman of

the boards of Karina International Limited and of Karina SA

in Madagascar. Before that, Antoine was an entrepreneur in

Madagascar and he had been a manager at Bain & Co, a

leading strategic Consulting firm. Graduated of the ESCP-

Paris business school, he holds an MBA from INSEAD,

France. He is a member of the boards of Ciel Textile and

CEAL. He is also Chairman of the Boards of Newpack SA in

Madagascar, Grand Hotel du Louvre SA in Madagascar and

of C.B.E. Ngazidja in Comoro Islands.

2011 2010

0 – Rs 200,000 2 2

Between Rs 200,000 to Rs 1 m 1 1

Between Rs 1 m to Rs 3 m 0 0

Above Rs 3 m 2 2

During the year ended 31 December 2011, executive

directors received an aggregate amount of Rs 15,065,891

(2010 - Rs 9,969,097) as remuneration and benefits from

the Company. The non-executive directors received an

aggregate amount of Rs 759,751 (2010 - Rs 402,800) as

remuneration and benefits from the Company during the

same period. Out of the Rs. 15,065,891, Rs. 1,052,609 has

been claimed to Shell International.

Directors’ emoluments

Mr Pawan K Juwaheer, aged 48Managing Director and Vice-President

Indian Ocean Islands

Mr Juwaheer studied mechanical engineering at the University of Manchester

Institute of Science and Technology, UK. Joining the company in 1986, he has

occupied different positions across the business. He worked as Lubricants Sales

Technical Assistant, Consumer Sales Representative, Retail Planner and Supervisor

and Retail Sales Manager in Mauritius. He acquired experience working overseas as

Retail Visual Identity focal point and Retail Engineering Manager for Shell in Tunisia

and later as East Africa Retail Network Manager and Regional Retail Manager for

Shell East Africa based in Nairobi.

Mr Juwaheer was appointed Managing Director of Vivo Energy Mauritius Limited

(formerly Shell Mauritius Limited) in July 2006 and has since been a member of the

board. He is a Director on Energy Storage Company Limited and State Informatics

Limited boards and a former Chairperson of the Mauritius Chamber of Commerce

and Industry. Since March 2012, he is also a member of the Local Advisory Board

of Barclays Bank.





Profile of management team

The Vivo Energy Mauritius Limited (formerly Shell Mauritius Limited) management team is responsible

for supervising the general course of business of the company and advises the Board of directors.

The team comprises the Managing Director, Mr Pawan K Juwaheer, the Finance Manager, Mr Patrick

Crighton, and the following managers:

Mr Maurice Lionnet Distribution Manager

Mr Abhinesh DussainMarine and Aviation Manager

Mrs Nancy YoungCluster Human Resource Manager

Mr Eric HufouyeRetail Manager

Mr Rajanah DhaliahBusiness-to-Business Manager

Appointed Distribution Manager in August 2005, Maurice Lionnet joined Vivo Energy Mauritius

Limited, formerly Shell Mauritius Limited, in 1976. Mr Lionnet has held various senior positions

both locally and overseas in Supply & Distribution (Aviation, Terminal/Depot and Supplies),

Marketing (Retail, Commercial and LPG); At Shell Djibouti - Operations Manager from 1984

to 1986; At Shell Mauritius Limited - Retail and Commercial Manager, from 1986 to 1990,

then Supplies and Installation Manager, from 1990 to 1997 and subsequently, Team Leader for

the implementation of JD Edwards Logistics from 1997 to 1999; Marketing Manager for the

launch and setting up of the newly formed Shell Madagascar (SMPS) from 1999 to 2002; LPG

Manager for Vivo Energy Mauritius Limited (formerly Shell Mauritius Limited) from 2002 to

2006.

Maurice Lionnet is also Managing Director for ESCOL (Energy Storage Company Limited),

an associate company of Vivo Energy Mauritius Limited (formerly Shell Mauritius Limited). He

holds a Masters Degree in Business Administration from the University of Surrey, UK, and is a

Member of the Society of Petroleum Engineers.

Mrs Young joined Vivo Energy Mauritius Limited (formerly Shell Mauritius Limited) in 1990

as Assistant to the Personnel and Services Manager. As from April 1999, she occupied the

position of Human Resources and Services Manager. In January 2005, Mrs Young was appointed

Cluster Human Resource Manager.

Before joining the company, she was a freelance consultant with Core Services Limited and

was involved in the job evaluation exercise for Air Mauritius. Mrs Young is a certified graduate

interviewer and assessor and a registered trainer in Human Resources Management. She holds

a Masters degree in Psychology with specialisation in Industrial Psychology from the University

of Bordeaux, France.

Holder of a Bachelor Tech in Civil Engineering from the Indian Institute of Technology, Bombay

and a Master of Science in e-Business from the University of Mauritius, Abhinesh Dussain joined

Vivo Energy Mauritius Limited (formerly Shell Mauritius Limited) in 2002 as Lubricants Sales

Engineer. In 2004, he was appointed Lubricants Business Manager. He managed the Lubricants

business for three years and in March 2007, he took over the Commercial Business as Fuels and

Bitumen Sales Manager. Beginning of 2009, Abhinesh was sent to Shell Botswana as Business-

to-Business Manager for an assignment and, after its completion, returned to Mauritius at the

end of 2009. Following short term assignment, in 2010, Mr Dussain took over the B2B role and

as well as the Marine and Aviation Manager for major part of the year. He was then appointed

full time Marine and Aviation Manager in 2011.

Holder of a postgraduate degree in Commerce, Management and Finance from Ecole

Supérieure de Commerce de Pau, France, Mr Hufouye joined Vivo Energy Mauritius Limited

(formerly Shell Mauritius Limited) as Retail Manager in October 2008. Before that, he has been

Project and Development Manager, Export Manager and Project Team Leader. Mr Hufouye

has strong experience in Project and Operations Management, ranging from business process

review to electronic payment systems development and implementation, both in Mauritius and

in the African region.

Mr Rajanah Dhaliah is holder of a degree in Mechanical Engineering and a Masters Degree

in Business Administration from the University of Mauritius. He joined Vivo Energy Mauritius

Limited (formerly Shell Mauritius Limited) in 1990 as Lubricants Sales Engineer. In 1995,

he acted as head of the Business Process Improvement Project for the company. He was

appointed LPG coordinator for Shell Gas Mauritius business from 1996 to 2000. He then

worked as Retail Manager for Mauritius from 2000 to 2004, and as such, formed part of the

Retail management team for East Africa.

After this, Mr Dhaliah became the Competence and Learning Manager for Africa and MECAS

(Middle East Central Asia South) for the Global Lubes Organisation until 2009. Mr Dhaliah

then became the B2C Marketing Manager for Commercial businesses within Africa until 2011.

He was appointed Business to Business Manager for Vivo Energy Mauritius Limited (formerly

Shell Mauritius Limited) in July 2011.

CORPORATE GOVERNANCE REPORT (CONTINUED)CORPORATE GOVERNANCE REPORT (CONTINUED)






Board meetings

The board meets on a regular basis and has a formal schedule

of matters reserved for it. This includes matters such as

approval of the Annual Report, approval of interim dividends

and recommendation of final dividends, approval of material

contracts and nomination of candidates for board membership.

The shareholders elect the board members each year at the

annual meeting. Each director is elected by a separate resolution

for a term of one year. The full list of matters reserved to the

board for decision is available from the Company Secretary.

Attendance of board meetings in 2011

In 2011, the attendance of the directors was as follows:

Constitution

The ARC, established by the Board of the company, shall

consist of at least two but not exceeding three Non-

executive Directors (NED). The Chairperson of the

committee shall be an independent NED (as defined by the

Code of Corporate Governance of Mauritius).

Each member shall be financially literate. At least one

member must have accounting or related financial expertise.

Members shall be appointed for two (2) years term of

notice so long as they remain a director of the company.

Audit committee members shall not serve simultaneously

on the audit committee of companies in the same field as

the present company and of more than two other public

companies without the approval of the full board.

Objectives

The audit committee shall assist the board in monitoring and

overseeing its financial responsibilities. Its main objectives

shall be to:

• oversee the integrity of the financial reporting process and

ensure the transparency and performance of published

financial information.

• review the effectiveness and performance of the

company’s internal financial control and risk management

system.

• evaluate the work of the internal audit function and of the

external auditors.

• review the company’s process compliance with legal and

regulatory requirements affecting financial reporting and,

if applicable, its code of business conduct.

The ARC committee will maintain effective working

relationships with the board of directors, management,

and the external and internal auditors. The duties and

responsibilities of a member of the audit committee are in

addition to those set out for a member of the board of

directors.

Meetings

Only committee members will attend meetings. A quorum of

any meeting shall be two (2) members. The audit committee

may invite such other persons (e.g. other directors, the

General Manager, head of finance, head of internal audit and

external audit senior partner) to its meetings, as it deems

necessary.

The external and internal auditors shall be invited to make

presentations to the audit committee as appropriate. At

least once a year, the committee shall meet with the head

of internal audit and senior partner of the external auditors

without the presence of executive management to discuss

any matters that either the committee or these two parties

believe should be discussed privately.

The committee shall meet as often as it determines necessary

or appropriate but not less frequently than quarterly.

The committee chairman shall convene a meeting upon

request of any committee member who considers it

necessary.

The secretary of the audit committee shall be the company

secretary, or such other person as nominated by the board.

The secretary of the committee shall circulate the minutes,

agenda, and background materials of meetings to the

Terms of Reference of Audit and Risk Committee (ARC)

Board committees

The Board has three standing committees made up of Executive

and Non-executive Directors to assist in the discharge of its

duties. The committees, which are set out below, meet regularly

under the terms of reference set by the board.

As from March 27, 2007 the Nomination and Remuneration

committee forms part of the Corporate Governance

committee.

Feb 17 Mar 25 May 13 Aug 11 Oct 13 Nov 11 Nov 22 Nov 30 Dec 02 Dec 16

2011 2011 2011 2011 2011 2011 2011 2011 2011 2011

Chairman

Mr Mamadou Sene X X X X X X

Managing Director

Mr Pawan Kumar Juwaheer X X X X X X X X X X

(Chairperson) (Chairperson) (Chairperson) (Chairperson) (Chairperson)

Directors

Mr Patrick Crighton X X X X X X X X X X

Mr Antoine Delaporte X X X X X X X X X

Mr Roger Leung X X X X X X X X X X






members of the committee and to the chairman of the

board at least a week before the meeting.

The background material must include all such management

accounts, financial statements, internal and external audit

reports and internal control evaluations that are available.

The chairman of the committee or another member of

the committee shall attend the board meeting at which the

financial statements are approved.

The committee should meet with in-house legal adviser on

a regular basis (if one is appointed). Meetings with outside

legal adviser should be held if it is deemed necessary.

Board authority

The board authorises the audit committee, within the scope

of its responsibilities to:

• Investigate any activity it deems appropriate,

• Appoint independent advisers and professionals

(accountants, lawyers and so on) as it deems necessary to

carry out its duties,

• Instruct any officer or employee of the company to

attend any meetings and provide pertinent information as

necessary and appropriate,

• Have unrestricted access to members of management,

employees and relevant information,

• Establish procedures for dealing with concern of

employees regarding accounting, internal controls and

auditing matters,

• Make recommendations to the board in relation to the

appointment, termination and remuneration of external

auditors and evaluate the work of the latter,

• Review the performance of the external auditors and

exercise final approval on the appointment or discharge

of the auditors; and

Key responsibility in respect of internal control

The committee shall:

• Discuss the internal controls, adhered to by the company’s

management, financial, accounting and internal audit

personnel,

• Discuss with management the company’s major risk

exposures and the steps management has taken to

monitor and control such exposures,

• Evaluate the overall effectiveness of the internal control

and risk management frameworks and consider whether

recommendations made by the internal and external

auditors have been implemented by management,

• Ensure that significant findings and recommendations

noted by the internal auditors and management’s

proposed response are discussed and appropriately acted

on; and

• Evaluate the internal control matrix of the company on

a quarterly basis and obtain management comments on

fluctuations in the score.

Key responsibility in respect of internal audit


• Ensure that the company has an appropriate internal

audit function,

• Review the effectiveness of the internal audit function

and ensure that it has appropriate standing within the

company; and

• Evaluate the internal audit department and its impact on

the accounting practices internal controls and financial

reporting of the company.

Key responsibility in respect of external audit


• Review on an annual basis the performance of the external

• pre-approve all audit services fees and terms as well as

review policies for the provision on non-audit services by

the external auditors.

The internal audit manager reports functionally to the

chairman of the audit committee (and administratively to

the General Manager).

Main responsibilities

The basic responsibility of the members of the audit

committee is to exercise their business judgment to act in

what they reasonably believe to be in the best interests of the

company and its shareholders. In discharging that obligation

members should be entitled to rely on the honesty and

integrity of the company senior executives and its outside

advisors and auditors, to the fullest extent permitted by law.

Key responsibility in respect of financial reporting


• Review the interim financial statements, annual financial

statements and preliminary announcements prior to their

release,

• Meet with management internal auditors and the external

auditors to review the financial statements, the critical

accounting policies and practices, and the results of their

audit,

• Ensure that significant adjustments, unadjusted differences,

disagreements with management and management letter

are discussed with the external auditors; and

• Review the other sections of the annual report before

its release and consider whether the information is

understandable, consistent with members’ knowledge of

the company and unbiased.

auditors based on the scope and results of their work and

make recommendations to the board of the appointment,

reappointment or termination of the appointment of the

external auditors,

• Consider the independence and objectivity of the external

auditor.

• Discuss and review the external auditors’ proposed

audit scope, planning and approach in the light of the

company’s circumstances and changes in regulatory and

other requirements; and

• Ensure that significant findings, accounting adjustments

and recommendations noted by the external auditors

and management’s proposed response are discussed and

appropriately acted on.

Responsibility in respect of compliance with laws and regulations


• Review the effectiveness of the system for monitoring

compliance with laws and regulations and the results

of management’s investigation and follow-up (including

disciplinary action) of any fraudulent acts or non-

compliance,

• Oversee the company’s compliance with legal and

regulatory provisions, its articles of association, code of

conduct, by-laws and any rules established by the board;

and

• Conduct and authorise investigations into any matters

within the audit committee’s scope of responsibilities.

Evaluating performance and reporting responsibilities


• Assess the achievement of the duties specified in the

Terms of Reference of Audit and Risk Committee (ARC) Terms of Reference of Audit and Risk Committee (ARC)






charter annually and make regular report of their findings

to the board,

• Review and reassess the adequacy of its charter every

two (2) years and discuss any required changes with the

board; and

• Recommend approval of the annual report and accounts

to the board.

Corporate Governance committee (Remuneration and Nomination committee)

Mr Antoine Delaporte (Chairman)

Mr Pawan K Juwaheer

Mr Roger Leung

Audit and Risk Management committee

Mr Roger Leung (Chairman)

Mr Antoine Delaporte

The main attribution of the Corporate Governance

committee is to provide guidance to the Board on aspects

of Corporate Governance and to recommend the adoption

of policies and best practices as appropriate to the company.

The Corporate Governance committee is also responsible

for remuneration and nomination matters within the

company.

Terms of reference of the Nomination committee

The Nomination Committee (if separately constituted)

or the Corporate Governance committee that has

responsibility for board and senior executive nominations

should:

• Ascertain whether potential new directors are fit and

proper and are not disqualified from being directors.

Prior to their appointment, their backgrounds should be

investigated thoroughly;

• Ensure that the potential new director is fully cognisant of

what is expected from a director, in general, and from him

or her in particular ;

• Ensure that the right balance of skills, expertise and

independence is maintained;

• Ensure that there is a clearly defined and transparent

procedure for shareholders to recommend potential

candidates;

• Ensure that potential candidates are free from material

conflicts of interest and are not likely to simply act in the

interests of a major shareholder, substantial creditor or

significant supplier of the company. This is of particular

importance when a candidate has been nominated

by virtue of a shareholders’ agreement, or other such

agreement. In any case, candidates so nominated cannot

be considered independent (see Section 2, chapter 4,

clause 7).

• Ensure that those directors who, in the opinion of

the board, have either acted in accordance with the

instructions of a third party or have not discharged their

duties as directors to the satisfaction of the board, not be

nominated for re-election.

Terms of Reference of Audit and Risk Committee (ARC)

Terms of Reference of the Corporate Governance Committee

Mar 18, 2011 Nov 22, 2011

Chairman

Mr Antoine Delaporte X X

Directors

Mr Pawan Kumar Juwaheer X X

Mr Roger Leung X X

Mar 18, 2011 May 06, 2011 Aug 05, 2011 Nov 14, 2011

Chairman

Mr Roger Leung X X X X

Director

Mr Antoine Delaporte X X X X






Directors in joint venture

Energy Storage Company Limited

Vivo Energy Mauritius Limited (formerly Shell Mauritius Limited) holds 50% of the shares of Energy Storage Company Limited.

The Board directors of ESCOL and their attendance to the ESCOL board meeting in 2011 are as follows:

May 17, 2011 Nov 08, 2011

Chairman

Mr Bashirally A Currimjee X X

Directors

Mr Mamadou Sene (Mr Pawan Kumar Juwaheer as alternate) X

Mr Pawan Kumar Juwaheer X X

Mr Maurice Lionnet X X

Mr François Gauthier de Charnacé X X

Mr Jean Jacques Papee X X

People in Vivo Energy are critical to the achievement of

our business objectives. Vivo Energy compensation policies,

practices, and systems are intended to recognise and

support:

• Individual and business performance; both short and long

term;

• Vivo Energy core values, business principles and people

principles;

• Business and people strategies;

• Our strong commitment to sustainable development;

• Market competitiveness and the importance of internal

relationships; and

• Different business and country economic, social, legal, and

regulatory environments.

ObjectivesVivo Energy companies will operate performance, reward

and benefit systems that:

• Align employee and shareholder interests;

• Support the attraction and retention of the best talent at

all levels who fit our business needs;

• Assist mobility and avoid creating barriers to movement

within a business, country or Vivo Energy;

• Recognise both common interests and individual

preferences; and

• Are transparent and well explained

In addition to these shared objectives, the different elements

of the total compensation package focus on different,

although complementary, goals.

Performance and rewards• Differentiate on the basis of performance and value to

the business; and

• Encourage growth and development as individuals and

team players.

Benefits• Provide a standardised platform that allows other

elements of the reward strategy to differentiate on the

basis of performance;

• Are cost effective and tax advantaged, where Vivo Energy

purchasing power provides leverage over individual

purchasing power to provide for cost reduction and risk

sharing;

• Support long-term social objectives for the communities

within which we work;

• Recognise the legislative environments and competitive

markets within these environments; and

• Support sharing of responsibility between the state, the

employer and the employee.

StandardsAll reward and benefit programmes within any country

need to comply fully with appropriate laws and regulations,

Statement of General Business Principles, country Codes

of Conduct, and be market competitive. To determine the

latter, Vivo Energy has established:

Our competitive reference

To compare to representative employers in the industries

and communities in which we do business or where we

compete for talent.

Our competitive objective

To have pay and benefits that results in a strong market

position among the competitive reference group, which

enables us to attract and retain the best talent at all levels

that fit our business needs. The pay element within the total

mix is more important than benefits in our competitive

positioning.

Health, Safety, Security and Environment policies and practicesVivo Energy Mauritius Limited (formerly Shell Mauritius

Limited) operates under a common set of business

principles, supported by policies and business controls. These

include a Health, Safety, Security and Environment (HSSE)

Commitment and Policy, which require that our company

shall have a systematic approach to HSSE management. We

have put in place the Vivo Energy mandatory procedure

for an HSSE Management System (HSSE MS), which is a

structured set of controls for managing the business and

to ensure and demonstrate that business objectives are

met. This management system takes into account HSSE MS

implementation requirements, incorporated in the business

level HSSE MS as well as the various classes of business

HSSE MSs relevant to our operations. Classes of business

are distribution, marine, business-to-business, LPG and retail.

The elements of this management system are organised

Performance and reward policies should help people excel,

foster affiliation with Vivo Energy, and encourage behaviour

that leads to the achievement of business and personal

objectives.

Benefits that are provided or enabled by Vivo Energy

companies are another important component of the

employee value proposition and support our attraction

and retention strategies. Benefits that are common foster

affiliation and community spirit and offer a foundation for

the total compensation package.

Our pay and benefits philosophy, objectives and standards

apply to Vivo Energy companies that employ people on

Vivo Energy terms and conditions and should be broadly

communicated and understood by all.

Vivo Energy HR performance, rewards and benefits philosophy






according to Vivo Energy guidance of how to integrate

HSSE into the business and manage HSSE matters as any

other critical activity. In line with our HSSE policy to achieve

continuous performance improvement, the individual classes

of business action plans have been well observed and

completed.

Policies and practice on ethics

Our approach to business integrity

Our commitment to business integrity is clear and

unequivocal; Vivo Energy Mauritius Limited (formerly Shell

Mauritius Limited) insists on honesty, integrity and fairness

in all aspects of our business and expects the same in our

relationships with all those with whom w

Annual Report 2011 - Vivo Energy energy... · For year 2011, Vivo Energy Mauritius Limited recorded...

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