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CHAIRMANS STATEMENT

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					c H aIr ma n ’s statem en t
l en Kon A R c hairma n

We are pleased to report a solid performance with further improvement in revenues and operating profit.

Dear Shareholder Review of Results Steinhoff’s robust performance in a challenging and volatile global market demonstrates the value of our geographic diversity and significance of the flexibility within our integrated business operations. Our performance was further strengthened by the positioning of our retail operations and the scale of our manufacturing, sourcing, and logistics operations. Of the group’s R50,9 billion revenue, 37% was generated from the European Union, 6% from Asia Pacific, 19% from the United Kingdom and 38% from southern Africa. CoRpoRate aCtivity The group’s deliberate working capital investment strategy within the current year, resulted in growth within previously unexplored territories, and bodes well for continued penetration in these territories off the existing supply chain. The group continued to invest and further strengthen existing partnership arrangements with strong European retailers in order to expand our retail distribution base. The group successfully implemented, the broad-based black economic empowerment (B-BBEE) transaction approved by our shareholders on 1 December 2008. The B-BBEE transaction, funded by the group, resulted in 19 000 Steinhoff Africa employees participating in the allocation of 40 million shares. In excess of 70% of the participants benefitting from this transaction come from a previously disadvantaged background. DeClaRation of Capital DistRibution anD shaRe awaRD We are pleased to report that the board decided to maintain its capital distribution for 2009 on the back of stable results compared to that of last year. All shareholders will receive capitalisation shares, unless they electe to receive instead, a cash distribution of 60 cents per share in respect of all or part of their shareholding. Our policy has been to pay an annual dividend/capital distribution covered at least four times by attributable earnings.
chAi R mAn’S StAteme n t • S te i n h off A n n u A l R e p oR t 2009 • 17

DiReCtoRate Steinhoff’s board comprises an appropriate balance of expertise and spread of local and international experience. The board enhances the group’s ability to recognise, consider, analyse and consequently manage the risks and challenges introduced by the financial crisis, whilst remaining committed to achieving our long-term goals and objectives. We take this opportunity to wish Mr Dirk Ackerman, our colleague since 1998, a restful and rewarding retirement. Mr Ackerman contributed to the success of the group in his capacity as a non-executive director of the board for the past 11 years. We welcome Dr Steve Booysen who was appointed as an independent non-executive director on 8 September 2009. Dr Booysen’s skills and experience will add tremendous value to the group. RemuneRation At Steinhoff, we are committed to the principle of sensible market-related remuneration, structured to align our business objectives with long-term shareholder interests. Steinhoff’s strategic objectives focuses on delivering sustainable value over time. The board of directors and executive management measure Steinhoff’s progress against these strategic objectives. Progress is then benchmarked using both financial and nonfinancial measures and performance appropriately rewarded as described in more detail within the remuneration report included on pages 196 to 204. ReseaRCh anD Development We continue to invest in research and development in existing and new lines of business that will contribute to our long-term growth. Our future growth is dependent on delivering innovative, appropriate and valued products and service solutions through our integrated platform.

Long-term sustainable growth will be further enhanced through technological innovation, operational excellence, and a commitment to delivering respected and valued products and services to customers and partners. sustainable Development Our commitment to be good corporate citizens remains in tact. This includes our commitment to all the stakeholders that we serve, including the communities and environments in which we operate. A separate corporate responsibility (sustainability) report is available highlighting our commitment, activities and achievements in this regard. Risk Over the years we have embedded robust risk, capital management and internal controls group-wide. Events during the year have powerfully reinforced the need for boards to have a clear understanding of the risks their businesses face. We believe the Steinhoff board and its committees have set a high standard in this regard and we continue to improve the manner in which we evaluate, formulate, communicate and manage the broad spectrum of risks our businesses are exposed to. The more pertinent risks are highlighted within the corporate governance, finance and sustainability reports. Our existing risk practices, frameworks and procedures proved relatively robust during the year under review and no major changes to the risk management process proved necessary. tRansfoRmation In its broadest sense, transformation is a central and strategic priority at Steinhoff Africa. We are committed to empowerment and transformation across all divisions and all levels. Our skills development and training programmes continue to make good progress and achieve success; these will ensure continuity and high quality future leaders and will greatly assist in meeting our future skills requirements.

18 • S t e i n ho f f Annu A l Rep oR t 2 0 0 9 • ch A i R m A n’S StAtement

employees We thank our employees for the part they have played in sustaining Steinhoff’s performance. Steinhoff is committed to provide support for employees which include, learning and development, diversity and inclusion, and providing an environment in which achievement and performance are respected and rewarded. Less complexity means we can now clearly identify top performers – both businesses and individuals – and reward them appropriately. We believe in developing and retaining market-tested leaders with the skills and experience needed to perform in a broad range of economic conditions. We invest substantial time and resources in training at all levels of the group. We see the greatest return on this investment in tough economic times like these. We have a core team of leaders that is prepared to handle the difficult conditions we face – and to protect and grow value over the long term. CoRpoRate GoveRnanCe Steinhoff and its directors, are fully committed to sound corporate governance and to the principles of fairness, transparency, accountability, responsibility and integrity in dealing with shareholders and all other stakeholders. We endorse the Code of Corporate Practices and conduct recommended in the King Report on Corporate Governance in South Africa 2002 (“King II Report”). We are positioned to adopt the King III Report on Corporate Governance that was released on 1 September 2009. Good governance is the foundation of our ongoing ethical approach to business. The board continued its focus on promoting the high standards of conduct we expect of our employees, customers and suppliers around the world, recognising that our leadership and actions speak louder than words. A comprehensive governance report is published on pages 62 to 83 of this report. The tone at the top and within the board has fostered an environment in which we are committed to high ethical standards, full compliance with legal requirements and resistance to market pressures for short-term results.

Our vision, our values and our commitment to accountability will keep us focused on our pursuit of excellence, regardless of how challenging the road ahead is. During the year under review, we completed a review of the board charter and board committees, including an examination of the respective committee charters, and a performance review of each director, including the chairman, to ensure that our board criteria are maintained. We believe in the importance of culture and ethics in business. Steinhoff’s longstanding traditions of financial strength, long-term customer relationships and entrepreneurial yet responsible management are as important today as ever. appReCiation We pay tribute to our board of directors, whose forethought and steadfastness in pursuing our strategic goals have been critical to our success. We also express our gratitude to our executives, managers and staff who have shown tremendous dedication and skill in challenging circumstances. We are grateful, too, to our stakeholders, to our business partners and to you, our shareholders, for your support during the year.

len Konar 8 September 2009

chAi R mAn’S StAteme n t • S te i n h off A n n u A l R e p oR t 2009 • 19


				
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