ethics
Board committees
The Board is authorised to form committees to assist in the execution of its duties, powers and authorities. The Board has three standing committees, namely the audit and risk, remuneration and nomination, and investment committees. The terms of reference and composition of the committees were determined and approved by the Board during the financial period and have been adopted by the committees. The terms of reference of the committees will be subject to review and amendments on an annual basis. The Chairmen of the committees report to the Board on a regular basis.
AUDIT AND RISK COMMITTEE
Composition: N V Maharaj and C W Williams
The audit and risk committee consists of three non-executive directors of whom two are independent. The audit and risk committee is primarily responsible for overseeing the company’s financial reporting process on behalf of the Board, and assists the Board in discharging its fiduciary duties relating to the safeguarding of assets, the operation of adequate systems, control processes and the preparation of accurate financial reporting and statements in compliance with all applicable legal requirements and accounting standards.
The mandate of the audit and risk committee includes:
- consideration of the annual appointment and evaluation of the external auditors, the audit plan and audit fees;
- evaluation of the independence and effectiveness of the external auditors;
- consideration of non-audit services performed by them in respect of which a policy has been established;
- review of the interim report and annual financial statements, including the valuation of unlisted investments and loans, prior to submission to the Board;
- discussion of problems arising from external audit and review of the external auditors’ interim and final reports and identification of key issues;
- consideration of major findings of internal investigations and management responses;
- review of the adequacy of the systems of internal control and any legal matters which could significantly impact on the Group’s financial statements;
- review of compliance with the King Code and Listings Requirements in so far as these relate to the financial statements; and
- consideration of the appropriateness of the expertise and experience of the Financial Director.
All members of the audit and risk committee are directors and are financially literate. The Chairman of the audit and risk committee or, in his absence, another member of the committee nominated by him, attends the AGM to answer questions falling under the mandate of the committee.
The audit and risk committee is required to meet at least four times a year. Meeting attendances are detailed below. Various other informal meetings were held during the year.
| Formal meetings attended | |
| R G Freese | 4 |
| N V Maharaj | 3 |
| C W Williams | 4 |
REPORT OF THE AUDIT AND RISK COMMITTEE
In terms of Sections 269A and 270A of the Companies Act, 1973 (No 61 of 1973) as amended, the audit and risk committee of the company and the Group, including wholly-owned subsidiaries, discharged it functions as follows:
- considered the annual appointment and evaluated the external auditors, the audit plan and audit fees;
- evaluated the independence and effectiveness of the external auditors;
- considered non-audit services performed by the external auditors;
- reviewed the interim report and annual financial statements,
including the valuation of unlisted investments and loans, prior
to submission to the Board. In the course of the review the
audit committee:
- took appropriate steps to ensure that the annual financial statements are prepared in accordance with IFRS and the Companies Act, 1973 (No. 61 of 1973) of South Africa as amended, and
- considered and made recommendations, where appropriate, on internal controls;
- discussed problems arising from the external audit and review of the external auditors’ interim and final reports and identification of key issues;
- considered major findings of internal investigations and management responses;
- reviewed the adequacy of the systems of internal control and any legal matters which could significantly impact on the Group’s financial statements;
- reviewed compliance with the King Code and Listings Requirements in so far as these relate to the financial statements; and
- reviewed the risk management framework and made recommendations, where appropriate, to the Board.
In terms of JSE Listing Requirement 3.84(i), the audit and risk committee satisfied itself that the Group Finance Director has appropriate experience and expertise.
The Chairman of the audit and risk committee is required to report to the Board of directors on matters attended to by that committee, which he has done, and Board members received a copy of audit committee minutes.
REMUNERATION AND NOMINATION COMMITTEE
Composition: Messrs A W Bedford (Chairman), A Abercrombie and Ms N Mlambo
The members of the committee are non-executive directors. For as long as the committee also performs a nomination function, the Chairman is to be appointed by the committee. The remuneration and nomination committee reviews the design and management of executive salary structures and policies. The Group was until recently primarily an investment company where investee companies had their own remuneration committees, but with the LPM acquisition on 30 June 2010 will now also oversee a substantial operating business. The committee also regularly reviews the composition of the Board and makes recommendations to the Board on its composition, the appointment of non-executive directors, the re-election of retiring directors and the composition of the Board committees, in terms of the prerequisites set out in the Board charter.
The mandate of the remuneration and nomination committee requires the committee, inter alia, to:
- ensure that competitive reward strategies and programmes are in place in support of realising corporate objectives and in safeguarding shareholders’ interests;
- recommend the level of non-executive director and Board committee fees to the Board, having received the proposals/ recommendations of the executive directors and, where appropriate, independent remuneration consultants for consideration and approval by shareholders;
- ensure consideration is given to succession planning in the Group; and
- review and determine the remuneration of the executive directors, subject to consideration of the short- and longer-term components of remuneration and individual contributions and performance.
No executive director is present at meetings of the remuneration and nomination committee when his own remuneration is discussed or considered. The Chairman of the remuneration and nomination committee or, in his absence, another member of the committee, is required to attend the AGM to answer questions on the subject of remuneration.
The remuneration and nomination committee is required to meet formally at least once a year. A number of informal meetings were held during the year.
| Formal meetings attended | |
| A Abercrombie | 1 |
| A W Bedford | 1 |
| N Mlambo | 1 |
Directors’ fees
| Remunera- | Total | Total | ||||||
| tion and | remunera- | remunera- | ||||||
| Other | Director | Audit | nomination | tion | tion | |||
| Salary | benefits | Bonuses | fees | committee | committee | 2010 | 2009 | |
| Executive directors | R | R | R | R | R | R | R | R |
| A P Funkey | 1 660 726 | 213 168 | 131 168 | – | – | – | 2 004 977 | 1 254 000 |
| R J Hoption | 954 865 | 81 293 | 75 000 | – | – | – | 1 111 158 | 776 923 |
| 2 615 591 | 294 461 | 206 083 | – | – | – | 3 116 135 | 2 030 923 | |
| Non-executive directors | ||||||||
| H Adams | – | – | – | 1 002 981 | – | – | 1 002 981 | 905 958 |
| A Abercrombie | – | – | – | 102 500 | – | 30 750 | 133 250 | 80 000 |
| A W Bedford | – | – | – | 102 500 | – | 61 500 | 164 000 | 110 000 |
| R G Freese | – | – | – | 102 500 | 61 500 | – | 164 000 | 110 000 |
| N Mlambo | – | – | – | 102 500 | – | 30 750 | 133 250 | 95 000 |
| N V Maharaj | – | – | – | 102 500 | 30 750 | 133 250 | 95 000 | |
| C W Williams | – | – | – | 102 500 | 30 750 | 133 250 | 95 000 | |
| – | – | – | 1 617 981 | 123 000 | 123 000 | 1 863 981 | 1 490 958 | |
| 2 615 591 | 294 461 | 206 083 | 1 617 981 | 123 000 | 123 000 | 4 980 116 | 3 521 881 |
INVESTMENT COMMITTEE
Composition: Messrs H Adams (Chairman) and A Abercombie
GPI’s investment objective is to achieve above average returns for its shareholders by investing in undertakings and entering into joint ventures and other similar alliances, whereby it forms partnerships with entities contributing not only to capital, but also providing strategic managerial input, a high profile corporate identity and, most importantly, impeccable empowerment credentials. The investment committee meets formally at least twice a year and engages in regular informal discussions.