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  • Mustek Integrated Annual Report 2011

    www.mustek.co.za unlocking potential

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  • www.mustek.co.za


    Mission stateMent IFC

    Caution on forward looking stateMents IFC

    sCope and boundary of the report IFC

    group profile 1

    Mustek’s integrated annual report

    for the 2011 finanCial year 2

    board responsibility stateMent 2

    Corporate Vision 3

    finanCial highlights 3

    siX-year finanCial reView 4 – 5

    Material issues 6

    group struCture 7

    Core Values 8

    ChairMan’s and Chief eXeCutiVe

    offiCer’s reView 8 – 14

    awards and reCognition 15

    operational reView 15 – 16

    Value added 17

    sustainability 18 – 31

    huMan Capital 18

    enVironMental sustainability 25

    soCial iMpaCts 31

    Culture, ethiCs and Values 31

    Corporate goVernanCe report 32 – 39

    reMuneration report 40 – 41

    risk ManageMent 42 – 43

    board of direCtors 44

    annual finanCial stateMents 45 – 137

    notiCe of annual general Meeting 138 – 142

    forM of proXy 143

    Corporate inforMation IBC


    Mustek assembles, markets and distributes iCt (information Communication technology) products and services. Mustek provides competitive, value-added services to our customers and creates wealth for shareholders. Mustek meets its objectives through strong relationships in the international iCt market, and by continually nurturing the entrepreneurial spirit of our people and business associates.


    Certain forward-looking statements are made regarding Mustek’s operations, economic performance or financial condition. these include statements concerning the economic and technological outlook for the iCt industry. although Mustek regards these forward-looking statements as being reasonable from its available information, no assurance can be given that such expectations will prove to be correct. outcomes may differ materially from those set out in the forward-looking statements as a result of, among other factors, changes in economic conditions, results from business and operating initiatives, regulatory changes, exchange rate fluctuations, technological advances or disruptions, and actualised risks. Mustek is not obliged to update publicly or release any revisions of these forward-looking statements to reflect events or circumstances after the dates of the annual financial statements, or to note unanticipated events. all subsequent written or oral forward-looking statements attributable to Mustek or any other person acting on its behalf are qualified by this cautionary statement.

    SCOpE ANd bOuNdAry Of ThE rEpOrT

    this report covers Mustek’s operations in south africa, elsewhere in africa and in australia for the financial year of 1 July 2010 to 30 June 2011. where reporting value and insights can be added by including post-30 June 2011 events and information, this has been done and recorded as having occurred subsequent to the reporting period.

    this integrated annual report and annual financial statements are prepared in accordance with international financial reporting standards (ifrs), the Companies act (act 71 of 2008), as amended, the Jse limited listings requirements, and the king report on governance for south africa 2009 (king iii).

    this integrated annual report covers the entire group and all its subsidiaries.

  • grOup prOfIlE

    Mustek, from its corporate headquarters in Midrand, south africa, oversees the activities of its business units operating in its chosen markets in africa and australia. the group invests heavily in its core resource – competent people – by pursuing a comprehensive programme of training and people development. the tenets of the group’s philosophy embrace transparency of operation, imaginative application of technology and accountability to all stakeholders. Mustek’s ongoing success is attributable to a clear and forward-looking strategic vision, responsible management, technically adept workforce, high quality products and superior service levels. the group aims to continue sustainably growing headline earnings and creating long-term shareholder value by remaining focused on its business model. this model provides cost-efficient, world-class distribution, after-sales support and added value services for quality iCt brands that include Mustek’s own well-established Mecer brand.

    increasing market share

    Mustek Integrated Annual Report 2011 1

  • 2 Mustek Integrated Annual Report 2011

    Mustek’s integrated annuaL report

    for the 2011 financiaL year

    This integrated annual report constitutes a major step along

    Mustek’s road to the full integration of the Group’s

    management reporting systems with the spirit and principles

    of the King Code of Governance Principles for South Africa

    2009 (King III). Mustek has reported to the extent that its

    internal management systems and reporting policies enable

    at this stage, and will develop its reporting processes in the

    areas on which the Group is not yet in a position to report in

    terms of King III.

    The Integrated Reporting Committee of South Africa defines

    an integrated report as “a report that incorporates, in clear

    language, material information from these and other sources

    to enable stakeholders to evaluate the organisation’s

    performance and to make an informed assessment about

    its ability to create and sustain value. An integrated annual

    report should provide stakeholders with a concise overview of

    an organisation, integrating and connecting important

    information about strategy, risks and opportunities and

    relating them to social, environmental, economic and financial


    This form of annual reporting integrates economic,

    environmental, social and governance issues into a single

    concise report that also emphasises company risks and


    Mustek’s engagement of King III and its process of producing

    all-inclusive integrated reports will influence the Group’s

    business thinking, consequent management decisions and

    systems of information gathering. This 2011 report meets the

    integrated reporting scope to the fullest extent that Mustek

    can provide at this time. Future reports will build upon this


    Board responsiBiLity stateMent

    The Mustek Board of Directors (the Board) acknowledges its

    responsibility to ensure the integrity of its integrated annual

    report for the 2011 financial year. The Board has accordingly

    applied its mind to the integrated annual report and in its

    opinion this integrated annual report addresses all material

    issues, and presents fairly the integrated performance of the

    organisation and its impacts. This integrated annual report

    has been prepared in accordance with the recommendations

    of principle 9.1 of the King III Code, to the extent that current

    Mustek management policies and processes allow. The

    Board has authorised the integrated report to be presented

    as part of the 2011 annual report.

  • Mustek Integrated Annual Report 2011 3

    corporate Vision

    Mustek will achieve its corporate objectives through:

    Leadership in its chosen markets.

    Increasing market share while maintaining margins.

    Maintaining its leadership position by introducing

    technology advances to the marketplace ahead of other


    Superior procurement, manufacturing and distribution

    capabilities, ensuring that high-quality, competitively priced

    products and services are delivered to customers.

    Equity in the workplace through focused empowerment


    Growth and value through targeted initiatives with larger,

    high-value customers.

    RevenueRevenue R3,5 billion billion (2010: R3,4 billion)(2010: R3,4 billion)

    EBITDAEBITDA R179 million million (2010: R155 million)(2010: R155 million)

    Headline earnings per share Headline earnings per share up 55% toup 55% to

    89 cents (2010: 58 cents) cents (2010: 58 cents) Dividend per shareDividend per share up 42% toup 42% to

    17 cents (2010: 12 cents) cents (2010: 12 cents) Distribution, administrative Distribution, administrative and other operating expenses upand other operating expenses up

    1,7%% Net finance costs downNet finance costs down

    44 % % Margin expansion; operating marginMargin expansion; operating margin

    5,1% (2010: 4,5%)% (2010: 4,5%)

    financiaL highLights

  • Six-year Financial Review

    4 Mustek Integrated Annual Report 2011

    2011 R000

    2010 R000

    2009 R000

    2008 R000

    2007 R000

    2006 R000

    SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Revenue 3 506 373 3 409 515 3 481 903 3 420 798 3 354 661 3 200 206 Cost of sales (2 990 485) (2 923 883) (2 916 547) (2 853 007) (2 803 598) (2 692 283)

    Gross profit 515 888 485 632 565 356 567 791 551 063 5