The directors are committed to conducting the business of the Group with integrity and fairness and in accordance with good governance practice and the Code of Corporate Practices and Conduct, as set out in the King II Report on Corporate Governance for South Africa (2002) (King II). The directors have accordingly established mechanisms and policies which are appropriate to the business and risks of the Group and that will ensure the continuous reassessment of the quality of the Group’s corporate governance practices.
The directors have reviewed the King III Report on Corporate Governance for South Africa (2009) (King III) and will implement, where appropriate, the recommendations included therein during the financial year ending 30 June 2011.
At the date of this report, the Board comprised five executive directors and five non-executive directors. The Company previously regarded all of its non-executive directors as independent non-executive directors within the meaning of the word ‘independent’ as defined in King II. However, in terms of the King III definition of independence, four of these directors can no longer be considered independent. For the year ended 30 June 2010, the Board was chaired by Piet Nel, a non-executive chairman. The King III report recommends that the chairman of the Board is not a professional adviser to the Company or the Group other than in his capacity as a director. During the year under review, Piet Nel provided the Company and the Group with geological consulting services. The Board considers the amounts paid for Piet’s consulting to be immaterial and are not seen as impairing his independence. The amounts paid to Piet for consulting are disclosed in the schedule of directors’ emoluments (refer to page 14). Subsequent to 30 June 2010, at the request of the Company, Piet has accepted a temporary appointment as employer’s representative at SamQuarz Silica Mine and he remains a director of Petmin.
With effect from 1 July 2010, Ian Cockerill assumed the role of Executive Chairman. The Board of Directors has constituted a Board subcommittee to restructure the board in line with the recommendations of King III and has appointed John Taylor as the lead independent director. The composition of the Board is designed to procure the necessary professional skills and experience required to judge objectively matters of the strategic and business direction of the Group.
All directors are subject to retirement by rotation and re-election at the annual general meeting of the members.
There is a clear division of responsibilities at Board level that ensures a balance of power and authority. No one individual has unfettered powers of decision-making.
The Board is responsible for the proper management and ultimate control of the Group. In order to meet this responsibility to members and other stakeholders, the Board is responsible for setting the strategic objectives of the Group, determining investment and performance criteria, and taking ultimate responsibility for the proper management and ethical behaviour of the businesses of the Group.
The Board meets on a formal basis or via electronic media at least quarterly, with additional meetings convened when circumstances make this necessary. The Group’s overall daily operations are managed and overseen by the executive directors.
The Board's responsibility is to:
In order to facilitate the discharge of the duties and functions by directors, the Group will assist directors by arranging:
The Board's independence is maintained by:
The Board has a strong contingent of non-executive directors who bring their diverse experience, insight, and independent judgement to bear on issues of strategy, performance, resources and standards of conduct. For the year ended 30 June 2010, the non-executive directors had no service contracts with the Company and were appointed for specific terms. Subsequent to 30 June 2010, Piet Nel has accepted a temporary appointment as employer’s representative at the SamQuarz Silica Mine. Recommendation to members for re-appointment is not automatic, but considered individually, based on that person’s contribution. The King III report recommends that the majority of non-executive directors be independent. All of the non-executive directors of the Company are considered independent as defined in the King II report. The Board is in the process of reviewing restructuring proposals and will implement changes to the Board composition in the year ahead to comply with the provisions of King III or will explain cases of non-compliance.
As they are involved with the day-to-day business activities of the Group, the five executive directors are responsible for ensuring that the Board’s strategies are followed and its decisions implemented.
The Board has delegated certain of its functions to subcommittees. The following committees have been established: Audit Committee, Remuneration Committee and Transformation Committee. All the committees act within defined terms of references and meet at least twice per year (see the Annual Report 2010). (PDF - 4MB).
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Led by the Board, the Group subscribes to certain values and ethical practices and these apply throughout the organisation. These values and ethical practices are sustained by the directors’ belief in free and fair dealings in good faith and with respect for the law and regulations.
The Board places strong emphasis on achieving the highest level of financial management, accounting and reporting to shareholders. The Board is committed to compliance with International Financial Reporting Standards (IFRS) and their interpretations adopted by the International Accounting Standards Board (IASB), the AC 500 Standards, and the requirements of the South African Companies Act. It is the directors' responsibility to prepare financial statements that fairly present:
The external auditors observe the highest level of business and professional ethics and their independence is not impaired in any way. The external auditors were given unrestricted access to all financial records and related data, including minutes of all meetings of shareholders and the Board. The directors believe that all representations made to the independent auditors during their audit are valid and appropriate.
The external auditors provide an independent assessment of systems of internal financial control to the extent necessary for the audit, and express an independent opinion on whether the financial statements are fairly presented. The external audit function offers an opinion that the annual financial statements fairly present in all material respects the financial position of the Group at 30 June 2010. The audit provides reasonable, but not absolute, assurance as to the accuracy of financial disclosures.
The Board sets principles that were considered and accepted by the shareholders for using the external auditors for non-audit services.
The Company is committed to a policy of timeous and effective communication with shareholders and other stakeholders through shareholders’ meetings, the annual financial report and interim financial report. Matters of both financial and non-financial nature are communicated to shareholders in a timeous and transparent fashion.
All dealings by directors are regulated and monitored as required by the listing requirements of the Johannesburg Securities Exchange Limited (JSE) and the London Stock Exchange’s Alternative Investment Market (AIM). Details of directors’ shareholdings are provided every year in the directors’ reports of the Company’s audited annual financial statements.
© 2009 Petmin Limited
The directors are committed to conducting the business of the Group with integrity and fairness