Appointment and re-election of
directors
Directors are subject to retirement
by rotation and re-election by shareholders
at an annual general meeting at least
once every three years in terms of
the company's articles of association.
The board charter is an integral
part of the conditions of appointment
of all directors. Procedures for
appointments are formal and transparent
and a matter for the board as a whole
to consider.
Non-executive directors retire
after reaching the age of 70 at the
next annual general meeting. Executive
directors retire from the board at
63 years of age at the following
annual general meeting.
Ms KW Mzondeki and Mr R van Rooyen,
having been elected to the board
during the year, are required to
retire at the next annual general
meeting, but being eligible, offer
themselves for re-election. Messrs
BP Connellan, KJ Makwetla and GH
Oosthuizen retire by rotation at
the next annual general meeting.
The nomination committee, at its
meeting held on 17 November 2009,
has recommended that they be re-elected
and they have offered themselves
for re-election.
Mr MJ Shaw who was requested by
the board to stay for another year
after turning 70 last year, resigned
as chairman of the board in May 2009.
Mr TS Munday was appointed chairman.
Messrs Fuller and Shaw, having reached
retirement age, will retire at the
forthcoming annual general meeting.
Mr SD Jagoe, who has started a financial
advisory business offshore, will
also step down from the board at
the forthcoming annual general meeting.
Details of remuneration, fees or
other benefits earned by directors
in the past year are detailed in
note 28 to the annual financial statements.
Board committees
In terms of the articles of association,
the board has the power to appoint
board committees and to delegate
powers to these committees. The board
has four sub-committees: the audit
and risk committee, the remuneration
commitee, the nomination committee
and the group executive and risk
management committee. Minutes are
kept of all committee meetings. These
committees can, at their own discretion,
seek independent, outside professional
advice when necessary. All committees
have charters approved by the Reunert
board. The committees are directly
responsible to the board.
Audit and risk committee
KS Fuller (chairman), BP Connellan,
SD Jagoe, Ms KW Mzondeki, MJ Shaw
and R van Rooyen.
Mr MJ Shaw was appointed to the
committee on 1 June 2009. Ms KW Mzondeki
and Mr R van Rooyen were appointed
to the committee on 1 November 2009.
The external auditor, chief executive,
financial director and head of internal
audit attend committee meetings by
invitation.
The audit and risk committee, chaired
by an independent non-executive director
comprises only independent non-executive
directors. The committee meets at
least twice a year and reviews the
group's internal and external audit
reports and agrees on the scope of
audits. The committee operates in
terms of its charter and assists
the board with regard to financial
and risk management matters in the
group.
In terms of the revised JSE Listings
Requirements, the committee has satisfied
itself of the appropriateness of
the expertise and experience of the
financial director.
The following is a list of key functions
which the committee performed during
the year:
- Monitoring the integrity of
the financial statements and other
relevant financial reports and
reviewing all judgements and inputs
to ensure that a balanced assessment
of the performance and financial
position of the group is presented.
- Satisfied itself of the adequacy
and appropriateness of the internal
control procedures of the group.
- Recommends the appointment of
the independent registered auditors.
- Determining the terms of engagement
and approving fees for external
audit and non-audit work appointments.
- Ensuring that the appointment
of the auditor complies with the
Companies Act and any other legislation
relating to the appointment of
auditors.
- Implementing corporate governance
policies.
- Monitoring the financial reporting
cycle and developments in accounting
standards.
- Supervision of the effective
operation of the internal audit
department.
- Overseeing the operation of
the risk management function that
incorporates insurance, security,
occupational health and safety
and environmental issues.
- Material litigation affecting
the group.
The terms of reference of the audit
and risk committee allows investigation
into any activity of the group and
it can seek information and advice
from any employee or expert in order
to carry out its duties. The committee
has not received any complaints relating
to accounting practices or other
matters for any of the operations
in the group.
The chairman of the audit and risk
committee has met on an individual
basis with external and internal
audit, the chief executive and financial
director without the attendance of
any other executives of Reunert.
The committee discharges its duties
with regard to its widely held subsidiaries
in the same meetings that are held
for Reunert Limited, as permitted
by section 269A of the Companies
Act.
During the year, the following
meetings took place:
| Date |
Apologies
tendered |
| 19 March 2009 |
- |
| 8 May 2009 |
- |
| 19 August 2009 |
BP Connellan (special
meeting) |
| 12
November 2009 |
- |
Executive remuneration policy
The remuneration of executive directors
and executives in operating divisions
is determined by a sub-committee
of the Reunert Limited board, the
remuneration committee. The committee
consists of at least three members
who are non-executive independent
directors of the board. The chairman
of the Reunert board may not act
as the chairman of the committee.
The following general principles apply
to executive remuneration in the Reunert
group:
- The aim with remuneration is
to ensure long-term, sustainable
performance while ensuring that
staff of the right calibre is attracted
and retained.
- A significant portion of the
total remuneration is linked to
value creating objectives.
- Components of the reward structure
are intended to provide alignment
between senior executives and shareholders.
- The total remuneration paid to
executives is made up of a fixed
pay component (cash and benefit
costs), a short-term incentive
(variable) component and a long-term
incentive.
Fixed remuneration
Fixed remuneration is reviewed
annually and determined with due
regard to market factors such as
size, complexity, strategic requirements,
profits and asset base.
Variable remuneration
A significant portion of senior management's
reward is variable and is based
on the following principles.
Short-term incentives
- The incentive is self funding,
where a percentage of returns in
excess of the required growth is
available for distribution to management
and is smoothed over a period of
time to avoid opportunism.
- All executives have, in addition
to their financial targets, additional
non-financial objectives that form
part of the short-term incentive
scheme. The scheme is structured
to find an appropriate balance
between financial and non-financial
objectives as well as performance
and behavioural criteria.
- The potential pool for distribution
to executives is determined by:
- An economic value-added reward
structure linked to long-range
targets in respect of executive
management in operating divisions.
A portion is coupled to the performance
of the group. In addition, stretch
targets are in place to reward
exceptional performance; however,
all bonuses are capped. Depending
on performance, bonus payments
are banked and released over
a three-year period to guard
against rewarding non-sustainable
performance.
- Growth in basic headline earnings
per share for executive directors.
This is aimed at achieving an
adequate balance between growth,
economic value-added and adequate
investment.
- The committee has discretion
in the payment of short-term
incentives.
Long-term incentives
- Long-term incentives have been
provided for many years through
share option schemes. Options are
normally allocated biennially.
The committee has the discretion
to issue options more frequently
if it deems appropriate.
- Options are allocated to employees
who have the capability of contributing
towards the group achieving its
objectives.
- The maximum number of options
that may be awarded is capped.
Options are capable of being exercised
in tranches over three-, four-
and five-year periods, after the
options are granted.
- Reunert offers a finance scheme
to employees to encourage ownership
of shares when options are exercised.
The loans granted to employees
are bearing interest at a rate
prescribed by the South African
Revenue Services.
- The group has the option to cash
settle options instead of issuing
shares. The appropriateness of
the settlement method is constantly
being reviewed.
- Participation in the long-term
incentive scheme is limited and
the overall number of shares under
the option scheme is limited to
10% and has historically been less
than 3% of Reunert's issued shares
at any time.
Remuneration committee
SD Jagoe (chairman), TS Munday, MJ
Shaw and JC van der Horst. The committee
meets at least twice a year to make
recommendations to the board on the
framework of executive remuneration.
These recommendations include granting
share options in terms of the Reunert
Share Option Scheme and performance-based
incentives. The chief executive attends
these meetings by invitation.
In the past year, the remuneration
committee met on:
| Date |
Apologies
tendered |
| 13 May 2009 |
- |
| 2 September 2009 |
- |
| 17
November 2009 |
- |
Nomination committee
TS Munday (chairman), SD Jagoe, MJ
Shaw and JC van der Horst. Mr MJ Shaw
resigned as chairman of the committee
on 13 May 2009 and was replaced by
the new chairman, Mr TS Munday.
This committee comprises independent
non-executive directors only and
meets at least annually to make recommendations
to the board on the composition of
the board and to identify and nominate
candidates to fill any vacancies.
In addition, the committee is tasked
to advise the board on succession
planning. The chief executive attends
by invitation. The committee met
on the following dates:
| Date |
Apologies
tendered |
| 13 May 2009 |
- |
| 2 September 2009 |
- |
| 17
November 2009 |
- |
Group executive and risk management
committee
G Pretorius (chairman), BP Gallagher,
GJ Oosthuizen and DJ Rawlinson.
The group executive and risk management
committee comprises executive directors
only and is constituted to assist
the chief executive to manage the
group. Executive directors and senior
executives meet regularly to guide
and control the overall direction
of the group and to identify potential
risk areas. The committee has met
at least 23 times during the past
year. The internal audit department
assists the board and management
in monitoring the risk management
process.
Company secretary
The board has access to the advice
and services of RMS. RMS fulfils
the role of company secretary and
administer the share option schemes
and all statutory requirements of
the company and the group. The board
believes the management of RMS has
the requisite attributes, experience
and qualifications to fulfil its
company secretarial commitments effectively.
Sponsor
The company continues to use RMB
as its sponsor. RMB’s services include
advising the board on the interpretation
of, and compliance with, the listing
requirements of the JSE and reviewing
all notices required in terms of
its statutes and JSE rules and regulations.
External audit
The board has appointed Deloitte & Touche
to perform an independent and objective
audit on the group’s annual financial
statements. The financial statements
are prepared in terms of IFRS. The
board has considered the extent of
non-audit related services provided
by the external auditors and is satisfied
that the independence of the external
auditors is not compromised.
Accounting and internal controls
Accounting and internal controls
focus on critical risk areas. The
controls are designed to provide
reasonable assurance that assets
are safeguarded from loss or unauthorised
use and those financial records may
be relied on for preparing the financial
statements and maintaining accountability
for assets and liabilities. The identification
of risks and the implementation and
monitoring of adequate systems of
internal, financial and operating
controls to manage such risks, are
delegated to senior executive management.
The risk management policies are
communicated directly to executive
management and the appropriate levels
of management in the various entities.
The board acknowledges its responsibility
for ensuring that management implements
and monitors the effectiveness of
systems of internal, financial and
operating controls. The board, via
the audit and risk committee, receives
regular reviews from management on
the effectiveness of established
controls and procedures to ensure
the accuracy and integrity of the
accounting records and monitors the
wider group’s businesses, risks and
performance.
The board has not been informed
by executive management or internal
audit of any issue that would constitute
a material breakdown in the functioning
of these controls during the financial
year under review.
Internal audit
Instituted, comprehensive internal
controls assist management and the
directors in fulfilling their responsibility
for preparing the annual financial
statements, safeguarding assets and
providing answers on transactions
that are executed and recorded in
terms of company and group policies
and procedures. The audit and risk
committee concurred on the appointment
of the head of internal audit.
Internal audit responds to these
requirements by performing periodic
independent evaluations of the adequacy
and effectiveness of all controls,
financial reporting structures and
the integrity of all information
systems and records. Bi-annual risk
assessments are performed by the
internal audit function and the internal
audit work plan is approved by the
audit and risk committee.
Internal audit reports to the audit
and risk committee and has unrestricted
access to the chairman of the board.
Non-financial matters
Reunert is committed to upholding
and maintaining best international
practices in the social, ethical,
safety, health and environmental
spheres of its business and acknowledges
the responsibility it bears as a
corporate citizen in society. The
group sets the highest level of ethical
standards for all its officers and
employees in conducting business
and dealing with all stakeholders.
Employment equity
The group supports employment equity
and is committed to providing equal
opportunities for all employees.
All business units have employment
equity programmes that comply with
legislative objectives and requirements.
Various skills development, mentoring
and training programmes exist within
the group. An in-depth review of
Reunert’s focus on people development
is available
in the sustainability report.
Environmental issues
Systems and policies are in place
to control or influence issues that
may have an impact on the environment.
To see more on how we address these
issues click
here.
Communication with stakeholders
Reunert is committed to ongoing
and effective communication with
all stakeholders. It subscribes to
a policy of open, frank and timely
communication in line with JSE guidelines
and sound corporate governance practice.
Executive directors conduct one-on-one
interviews during open periods, while
executive management interacts with
investors and shareholders through
participative, open investor days.
Numerous channels are used to disseminate
information according to the preferences
of the intended target audiences.
These include ongoing dialogue with
institutional investors, analysts
and the media and a corporate website
with up-to-date information on the
group.
Dealing in the company’s shares
and closed periods
Employees are restricted from dealing
either directly or indirectly in
the company’s shares on the basis
of privileged price-sensitive information
before it is publicly announced to
the market.
Senior executives require permission
from the chief executive before shares
are purchased or sold. All directors
require permission from the chairman
before dealing in the company’s shares.
The group operates a closed period
prior to the publication of its interim
and year-end results. During these
periods, the group’s directors, officers
and senior management may not deal
in the shares of the company, nor
may they discuss the group’s financial
prospects with any outside party.
Additional closed periods are enforced
as required by any corporate activity.
Code of ethics
The group’s code of ethics can
be found here. All
employees are required to adhere
to this code.
Whistle blowing function
The group has designed and is testing
a whistle blowing programme which
will be implemented throughout the
whole group in the next financial
year. |
