Business Partners Limited

Chairman’s Address

24th Annual General Meeting

2005

Honoured Guests, Mr Schwenke, Members of the Board, Shareholders, Executive Management and Staff,

Welcome to the 24th Annual General Meeting of Business Partners Limited, South Africa’s leading investment

company for small and medium enterprises.

This year, despite growing competition in the financial services market, we have occasion to celebrate.

Business Partners has recorded significant growth over the 2004 financial year and this past year has been

the company’s most successful ever. Our investment in entrepreneurs is up 47% on last year, climbing to

R660, 5 million from R449 million in 2004, while our portfolios under management now total R1,06 billion. We

can be justly proud of these results, as they reflect the fact that we are fulfilling our mission of investing in

entrepreneurs in every way.

The key to this growth and stability has been a sure and steady strategic focus, which has nevertheless

allowed appropriate flexibility in order to meet the needs of a changing market. As more entrepreneurs enter

the economy, their need is not just for investment financing, but for more complete and contemporary

solutions to the challenges they face. Essentially, they require a full-service investment partner that is able to

offer them uniquely-structured investment packages, as well as the kind of added value services needed to

ensure sustainable success.

From an investment perspective, our internationally-recognised risk financing model continues to provide

access to business ownership for many people who would not otherwise have this access. In the true spirit of

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entrepreneurship, Business Partners actually partners with its clients, creating both individual and shareholder

wealth with each investment.

Over time, the implementation of our model has shifted from a product-focused approach to a service-focused

approach, concentrating on providing invaluable business advice both pre- and post-investment. This is

backed up by such services as consulting, mentorship, skills transfer programmes and property management.

The combination of professional investment advice, uniquely-structured investment packages and essential

added-value services remains one of the industry’s most effective entrepreneurship financing models.

As important to our success is the process we have recently begun of adding managed third party funds to our

portfolio. This not only extends our reach into the entrepreneurial sector, but also serves to secure our

specialist market position and long-term profitability.

The first of these managed funds, the Business Partners Umsobomvu Franchising Fund, was launched in

2003 and is proving to be a successful instrument for providing access to the benefits of franchising for young

entrepreneurs. The fund is targeted at young people from historically-disadvantaged communities who are

between the ages of 18 and 35 and, as such, is an important tool of both youth enablement and black

economic empowerment. The Franchising Fund takes our objective of investing in entrepreneurs a step

further. During the 2005 financial year, investments to the value of R40,8 million were approved through the

fund and three further funds of this nature are under discussion.

As to our broader results, 538 investments to the value of R660,5 million were approved during the year

totalling, as I have said, R660,5 million. Of this, R154,4 million was invested in businesses owned and run by

women and R265,9 million in entrepreneurs from historically-disadvantaged communities. Net profit, however,

decreased from R188,7 million to R102,6 million, largely as a result of fluctuations in interest rates. This has

kept dividends constant at 16 cents per share.

Our added-value portfolios continue to perform well. The rationalisation of the property portfolio over the past

three years has ensured that the company no longer carries the burden of under-performing or non-

performing assets. Further, the separation of property investments and property management has ensured

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more specialist management of these two aspects of the business. Property investments, like all other

investments, are now managed at fund level, enabling the property division to focus on providing a wide range

of property management services. Properties under management now account for more than 670 000 m2 of

lettable space and are occupied by 3 470 tenants. Indeed, Business Partners Properties has become a key

profit centre for the group and provides an invaluable service for entrepreneurs seeking to buy or rent own

premises.

Further, Business Partners Mentors is now a well-established aspect of the company’s total service offering

and is becoming a benchmark for entrepreneurial support and skills transfer. The division’s services provide

not only added value to our clients, but are an important risk management tool. As I have said before,

appropriate intervention at the right time can nurture a business through a difficult growth phase or mitigate

against outright failure when a business finds itself in trouble.

It is this balance between risk and innovation, contained within the framework of sound business principles

and carefully-managed process, that keeps our company on a steady course.

In closing, it is important to say that our course must be guided by our mission and our ideal - to empower

entrepreneurs, to create individual and shareholder wealth, to facilitate the creation of jobs and to contribute to

the long-term socio-economic stability of our country. Balancing profit and effectiveness, as measured against

the company’s mission statement, is delicate task and one which, I am proud to say, Business Partners

continues to do in a managed and measured way.

Of course, any business is only as good as the people who run it and, at Business Partners, we are privileged

to have some of the best professional and financial skills that the country has to offer.

In that regard, I would like to thank the members of the Board and of its committees for their on-going service

and dedication during the past year. These structures of corporate governance are a vital aspect of the

company’s on-going success. I would also like to thank the members of the various regional committees, who

work so hard to assess the viability of every deal, providing invaluable checks and balances during the

approvals process.

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I would naturally also like to thank the group’s staff in our offices across the country for their hard work and

innovative thinking. They are the lifeblood of the business and hold in their hands its day-to-day management.

Last, but certainly not least, a special note of thanks is due to our shareholders, who continue to show such

confidence in Business Partners. It is our vision and our goal to create a company that not only builds wealth

for its shareholders and clients, but which is a significant force for entrepreneurial empowerment in South

Africa. And it is our shareholders, first and foremost, who provide the private equity that makes this possible.

I thank you all and look forward to another successful and profitable year.

J P Rupert

Chairman of the Board

Business Partners Limited
5 Wellington Road
Parktown
Johannesburg
Company Registration Number: 1981/000918/06

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