Dairibord Holdings Limited 2011 Annual Report 1 Vision, Mission and Corporate Profile Values Statement Dairibord Holdings Limited is a manufacturer and marketer of quality VISION milk, foods and beverages. The company is listed on the Zimbabwe Stock Exchange (ZSE). It is a prime example of successful privatisation To be the best and most successful food company in Africa, by the Government of Zimbabwe as it was originally a state owned commanding a position of sustainable growth driven by technology enterprise established for the purposes of processing and marketing and market share leadership. milk products . MISSION Dairibord Holdings has 100% ownership in Martindale Trading (Private) Limited t/a Lyons, Lavenson Investments (Private) Limited, To be the most sought after marketer of nutritious foods and NFB Logistics (Private) Limited, Kutal Investments (Private) Limited, beverages with domestic dominance and regional presence. 68.4% shareholding in Dairibord Malawi Limited and 40% in M E Charhon (Private) Limited. Kutal Investments is a property holding VALUES company which leases its properties to Group companies. Dairibord Malawi (Private) Limited has 100% ownership in Mulanje Peak Foods • Innovation: We are committed to innovation and addressing (Private) Limited. Lavenson Investments (Private) Limited has a 100% changing customers’ needs and we will continuously develop our ownership in Dairibord Zimbabwe (Private) Limited. processes to produce a wide variety of quality new products and services. The Group produces an extensive range of products which include • Commitment: Customer satisfaction is the yardstick against liquid milks (short and long shelf life milk), foods (yoghurt, ice which our company’s performance in all spheres will be creams, cheese, ice cream cone shells, condiments and spreads) and measured. Exceeding our customer needs and expectations will beverages (cordials, ready-to-drink dairy and non dairy, teas, mineral be a commitment shared by every person in the company. water) which are marketed in both the domestic and export markets. • Professionalism: We will recruit and develop a well-trained work As at December 2011, Dairibord Holdings had a staff compliment force in which job competence, performance and succession of 1,041 permanent employees and 613 contract employees. The stability are the primary objectives. complement of independent vendors stood at 1,079. • Integrity: Our integrity will be displayed to our customers, suppliers, employees, shareholders and to the environment. Dairibord Holdings Limited is one of the largest manufacturing and • Responsibility: As a corporate citizen, Dairibord Holdings Limited marketing companies in Zimbabwe with over 50 brands. The Group is committed to discharging itself responsibly in all its dealings has factories in Harare, Chitungwiza, Bulawayo, Gweru, Kadoma, with stakeholders. Mutare and Chipinge. The operations in Malawi are located in • Sensitivity: We will provide a safe and positive working Blantyre and Mulanje District environment for our employees. Openness, two way communication, personal development, trust and recognition of achievement will be fostered to achieve our mission. Our goal is to be responsible and accountable to our shareholders through value creation in which sustainable profitability is a key requisite. We have developed and maintained a well-documented management system supported by an internationally recognised up-to-date enterprise wide management system. • Fairness: We will be fair in all our dealings • Zero tolerance to corruption: Our strategies and operations are anchored on principles of sound corporate governance. To this end, the Group operates on a zero-tolerance-to-corruption policy. 2 Dairibord Holdings Limited 2011 Annual Report CONTENTS Corporate Policy Statement 5 Directorate and Professional Advisors 8 Board of Directors 9 Group Structure 10 Group Brands 11 Management 12 Financial Highlights 14 Chairman’s Statement 15 Group Chief Executive’s Report 18 Corporate Governance 25 Statement of Directors’ Responsibility 26 Report of the Directors 27 Independent Auditors’ Report 31 Statements of Financial Position 32 Statements of Comprehensive Income 33 Statements of Cashflows 34 Statements of Changes in Equity 35 Notes to the Financial Statements 36 Shareholder Analysis 68 Notice to Shareholders 70 Shareholders’ Calendar 71 Dairibord Holdings Limited 2011 Annual Report 3 Cascade and Quick Brew 2011 Superbrand Awards 4 Dairibord Holdings Limited 2011 Annual Report Dairibord Holdings Limited 2011 Annual Report 5 Corporate Policy Statements Quality Policy Our quality objectives are documented in the company’s strategic At Dairibord Holdings Limited we strive to: plan and are reviewed annually through a management review ‘Provide safe food and beverages that satisfy our customers’ process. Through our performance management system each expectations and comply with regulatory requirements, both employee of the company translates these objectives into desired nationally and internationally’. actions and values. In our operations we adhere to stringent hygienic practices and, The company policy is displayed openly as a sign of our commitment. where necessary, emphasize on maintenance of the cold chain to The policy is presented to all employees in our quality orientation assure the quality of the products that we present to our customers. awareness training and is continuously reinforced by management to Through active planning and control of every function, we strive ensure understanding and commitment at all levels. to provide products and services that consistently meet all quality, quantity, timing and cost objectives. Health And Safety Policy Dairibord Holdings Limited is committed to providing a safe Furthermore, we are dedicated to continually improving the quality environment for all employees by fulfilling the following: of our products and services in order to sustain market share • To provide adequate health and safety training for each employee leadership by regularly determining the current and future needs of in terms of the location and function of their job. our customers and reviewing our processes in order to satisfy these • To regularly review the design of the factories and equipment in needs. order to implement measures which will improve the safety of Through the implementation of ISO 9001:2000 and ISO22000:2005 the workplace. Quality management systems, we aim to achieve quality excellence, • To provide First Aid Equipment for use in the factories as well as the foundation for the management of our business. ISO 22 000: First Aid Training to designated members of the workforce 2005 is a combination of ISO 9001:2000 and Hazard Analysis • To comply with the Factories and Works Act concerning health Critical Control Points (HACCP). HACCP is a food safety standard and safety in the workplace. that operates on a framework of a structured management system • To run awareness training programs on HIV/AIDS targeted at all that is incorporated into the overall management activities of the employees. organization. The Standards Association of Zimbabwe (SAZ) ISO 22 000:2005 specifies requirements for food safety management systems These matters are covered comprehensively in our Health and Safety manual, which is available to all employees. where an organization in the food chain needs to demonstrate its ability to control food safety hazards in order to ensure that food is safe at the time of human consumption. Since food safety hazards can be introduced at any stage of the food chain, adequate control throughout the food chain is essential. 6 Dairibord Holdings Limited 2011 Annual Report Corporate Policy Statements Environmental Policy At Dairibord Holdings Limited we are genuinely and deeply concerned • We will work with and advise suppliers and contractors in order about the global destruction and damage to the environment. to minimize the impact of their operations on the environment. We are committed to a continual reduction of our negative environmental • We will foster openness and dialogue with employees and all effect. In line with the company’s commitment to environmental interested parties anticipating and responding to their concerns responsibility, we have a policy wherein: about potential hazards and impacts to Dairibord’s Operations. • We will actively move towards compliance with relevant environmental legislation and regulations. • We will measure environmental performance by conducting regular environmental audits. The company’s compliance to • We will publish the environmental policy in English, Shona, legislation and its own requirements as a responsible corporate and Ndebele where it can be viewed by all employees of the company. citizen will be regularly assessed and used as a basis of The policy will, on request be available to all externally interested determining future action on environmental relevance. parties. Environmental training will be used as a tool to spread environmental responsibility on a personal level throughout the company • We will allocate resources to the setting and achievement of environmental objectives and targets for the company and for management. Programs will be publicly displayed. • We will maintain continuous efforts to achieve continuous improvements in our environmental performance policies, programs and operations taking into account technical developments, scientific understanding, customer and community expectations. Our starting point is to comply