Companies Act No 71 of 2008 and Regulations (new Companies Act)
With the coming into effect of the new Companies Act, it has been necessary for the group to address certain key governance and/or corporate
administrative factors prescribed in the new legislation. At the time of drafting this report, the group was in the process of assessing the Act
to determine the extent of non-compliance and to formulate a work plan to address those. On the next two pages we outline initial relevant
areas we have identified.
||Annual financial statements to bear, on the first page of
the statements, a prominent notice indicating whether the
statements are audited or reviewed and who prepared or
supervised the preparation of those statements.
||A statement confirming these details is disclosed on the
first page of the annual financial statements with the
statement of responsibility by the board of directors.
||Preparation of annual financial statements is required
within six months after the end of the group’s financial
||The group’s annual financial statements are prepared and
released within two months after its financial year end.
||Companies must include particulars on remuneration (as
defined in sub-section (6)) received by each director or
individual who holds or has held any prescribed office in
||Particulars on the remuneration received by each director
and prescribed officer in the group are provided on
pages 72 to 76 of this integrated report.
||The board of a company may resolve to issue shares of the
company at any time, but only within classes and to the
extent that the shares have been authorised by the
Memorandum of Incorporation.
||Issue of authorised but unissued shares is subject to
consideration and approval of the board.
||The board of a company may set a record date for the
purpose of determining which shareholders are entitled to
receive notice of a shareholders’ meeting, participate in
and vote at a shareholders’ meeting, decide any matter by
written consent or electronic communication, as
contemplated in Section 60; exercise pre-emptive rights,
as contemplated in Section 39; receive a distribution; or
be allotted or exercise other rights.
||The group has set a record date for shareholders’
eligibility. Refer to the notice of AGM on page 256.
||Remuneration of directors may be paid only in accordance
with a special resolution approved by the shareholders.
||A special resolution for approval by shareholders is
included for the forthcoming annual general meeting
(AGM) agenda. Refer to page 256.
||Board resolutions must be dated and sequentially
numbered and are effective as at the date of the
resolution unless otherwise stated.
||Board resolutions are dated and sequentially numbered.
||The audit committee (comprising at least three members)
to be elected at each AGM.
||Members of the audit committee are recommended to the
AGM for shareholder approval.
|In the process of ensuring compliance
Retain the following documents, in written form, for a
period of seven years:
||Record of directors
||Copies of all reports presented at an AGM
||Annual financial statements and accounting records
||Notices, minutes and resolutions of shareholders’
||Notices, minutes and resolutions of all board, audit,
||Registration of company secretary and auditors
||The group currently has a five-year record keeping policy
in place. This will be addressed immediately.
||Approval by shareholders via special resolution for the
provision of loans and other financial assistance to
directors, prescribed officers, related and/or inter-related
companies. If the board adopts a resolution it is required
to advise shareholders and trade unions within ten days.
||The group does not provide financial assistance to
directors or to prescribed officers. It does, however,
provide financial assistance to its subsidiaries in varying
forms. This financial assistance was largely in place by
1 May 2011. The board has included a special resolution
for approval by shareholders at the forthcoming AGM
requesting general authority to issue such financial
assistance. The group notes that there continues to be
much debate as to the application of this section. It has
developed a work plan to address the Act requirements
and has sought external legal advice in support of
|Section 72(4) to (10)
||The Minister of the Department of Trade and Industry may
by regulation prescribe that a company or a category of
companies must have a social and ethics committee, if it
is desirable in the public interest, having regard to its
annual turnover, the size of its workforce, or the nature
and extent of its activities.
||The board has not yet established a committee with a
mandate to oversee the responsibilities envisaged by the
Act for the social and ethics committee. This forms part
of the group’s work plan to close out gaps of noncompliance
with the Act. The group is required to have
addressed this by May 2012.
||If a director of a company acquires a personal financial
interest in an agreement or other matter in which the
company has a material interest, or knows that a related
person has acquired a personal financial interest in the
matter, after the agreement or other matter has been
approved by the company, the director must promptly
disclose to the board, or to the shareholders in the case of
a company, the nature and extent of that interest and the
material circumstances relating to the director or related
person’s acquisition of that interest.
||The group maintains a Conflict of Interest Policy. This
requires all directors, prescribed officers and business
unit directors to confirm any conflict of interest which may
arise when the individual acquires a personal financial
interest in an agreement or other matter in which the
group has a material interest or knows that a related
person has acquired a personal interest. This is declared
on a quarterly basis. The policy, however, only states that
disclosure needs to be made at each quarterly board
meeting and not when the conflict arises. The policy has
been amended and will be presented to the board for
approval and implementation.
The board is of the view that the group is compliant with the
Companies Act to the extent required and where practically possible.
It has initiated a process of addressing areas of non-compliance to
gain full compliance.
King III report
The group continued to address gaps identified through the King III
analysis conducted in F2010. Various initiatives implemented by the
group in response to these have resulted in the streamlining of
governance areas. This includes, for example, the establishment of
the IT steering committee, an advisory committee of the group’s
IT function and management that reports on an annual basis to the
audit committee. Other notable changes include the first stages in the development of succession plans for executive directors and a
review of the board structure, in particular the composition of
board committees, such as the audit committee.
An external appraisal of the effectiveness of the board was conducted
during the period. The appraisal was benchmarked against the group’s
strategic requirements to ensure the capacity of the board to deliver
these requirements and to strengthen the diversity and sector expertise
of directors. The outcome of the appraisal was mainly positive, with the
board being reported to be vigilant in terms of its role on governance
and strategy. Contributions made by the board to operational issues
were, however, found to be reactive. To address this, selected audit committee and risk committee members joined executive management
on a site visit to the Middle East to independently assess macro risks.
During the period under review, the board also accepted and approved
a revised board charter and the terms of reference for all board
committees in line with King III requirements. The key areas addressed
were the annual appointment of the chairperson of the board and the
annual performance review process of board committees. This
especially includes the audit committee whose members are subject
to formal approval by shareholders at an annual general meeting.
Areas identified for improvement include ensuring the development
of a formal induction process, which was not addressed in the period
under review, continuing education of directors and a requirement
to recruit additional directors with relevant experience and industryspecific
expertise to further strengthen the skills of the board.
This has been addressed with the appointment in August 2011 of
two new directors, Mr OA Mabandla and Mr DDS Robertson.
Although directors attend strategy sessions with management twice
a year and attend site visits and internal industry-specific awareness
programmes from time to time, the group currently does not have a
formal induction process. The board’s succession plan must also be
presented to the board for consideration and approval.
Following the assessment of the main board, in the coming year the
group will access the effectiveness of the sub-committees.
Employee share scheme
The company secretary is responsible for administrating the group’s
broad-based employee share scheme, the share appreciation rights
scheme and the black managers’ scheme together with an external
service provider. During the year, there were a number of issues that
required attention. These included errors resulting in delayed delivery
of shares to the beneficiaries of these schemes. In the coming year, we
will focus on completing an automation process and addressing
all administrative issues.
Tip-offs anonymous line
The company secretary is also responsible for administrating the
group’s Tip-offs Anonymous line. The group experienced an increase in
fraudulent and unethical behaviour during the year. Pleasingly, a 48%
increase was seen in the number of tip-offs received through the
group’s ethics line and directly by the risk department. We believe this
indicates that increased awareness and training has resulted in
employees being more observant and willing to report incidents.
Management’s swift action in response to unethical acts has also
communicated a clear message and potentially increased
employee confidence in the process.