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Corporate Governance AUDIT, COMPLIANCE & RISK MANAGEMENT COMMITTEE REPORT These are identified at all levels within the organisation and absorbed into DCP’s strategic plan for execution with close monitoring until fruition. The opportunities identified in 2016 were stemmed from mitigation strategies considered and employed in managing foreign exchange and business risk exposures. Export trades The volatilities experienced in local economies such as Nigeria and Ethiopia resulted in scarcity of currency and the associated challenges of sourcing of spare parts and raw materials. To meet its foreign currency based needs, an aggressive move to build the necessary infrastructure for increased export sales was embarked on. Key export trades by DCP Nigeria are to Niger, Togo and Ghana whilst DCP Zambia exports to the Democratic Republic of Congo, Malawi, Burundi and Zimbabwe. This generates more foreign currency based income for the organisation required for meeting its international procurements and invisible payments. Coal mining Options explored for effective management of energy and power costs in DCP Nigeria opened up the idea of using coal to power kilns instead of Gas and LPFO. Gas supply was erratic and even with coal facilities operational on some lines, Ibese and Obajana had to resort to use of imported LPFO. Furthermore, the devaluation of the Naira resulted in increased production costs, which adversely impacted EBITDA. Although we were able to use coal in 2016, it was mostly imported and therefore subject to foreign currency exposure. A decision was made at parent company level to develop coal mines in Nigeria to improve fuel security, improve margins and reduce Dangote Cement’s foreign currency requirement by sourcing coal locally in Nairadenominated transactions. This opportunity will be pursued in any other of the Group’s countries of operation if local coal deposits can be mined to reduce costs at the plant. Truck Officers’ Scheme The need to improve efficiency levels in the Group’s transport management led to the introduction of a Truck Officers’ Scheme, which assigned a maximum of five trucks to a “Truck Officer” who will be responsible for supervising the drivers of these trucks and ensuring improved turn-around time to meet performance benchmarks. This new scheme has greatly improved transport management in DCP Nigeria, where the pilot scheme is running. Summary of Key Risk Indicators tracked at Dangote Cement Risk type People risk Process risk System risk External risk events Scope of KRIs Recruitment process; attrition rate; career management; employee productivity; succession planning; staff grievance management; annual leave management; age and gender profiling; internal fraud; staff injury, illness and death. Transport/logistics; HSE; budget and financial management; procurement and supply chain management; strategic milestone monitoring; production and control; quality control; sales and marketing; physical security; infrastructure and equipment manufacture. SAP issues; IT general control lapses; System availability issues; network maintenance issues; disaster recovery issues; equipment failures. Vendor and supplier management; contractor management; regulatory sanctions; customer complaints management; negative public perception. Number of KRIs 30 103 46 15 Annual Report 2016 105

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