GOLD BRANDS INVESTMENTS LIMITED

Transcription

1 Applied/ Chapter 1 - Ethical leadership and corporate citizenship 1,1 The Board should provide effective leadership based on an ethical foundation. The Board and the Company subscribe to a Code of Ethics and all directors and employees of the Company are expected to abide by that Code. 1,2 The Board should ensure that the Company is and is seen to be a responsible corporate citizen. More focus will be given to the area by the Social and Ethics Committee this year. Partially 1,3 The Board should ensure that the Company's ethics are managed effectively. More focus will be given to the area by the Social and Ethics Committee this year. Partially Chapter 2 - Boards and directors 2,1 2,2 The Board should act as the focal point for and as custodian of corporate governance. The Board should appreciate that strategy, risk, performance and sustainability are inseparable. 2,3 Refer principle 1.1 above 2,4 Refer principle 1.2 above 2,5 Refer principle 1.3 above 2,6 Refer to Chapter 3 2,7 Refer to Chapter 4 2,8 Refer to Chapter 5 2,9 Refer to Chapter 6 2,10 Refer to Chapter 7 2,11 Refer to Chapter 8 2,12 Refer to Chapter 9 The Board does not monitor the relationship between management and the stakeholders of the Company at present. The Board does appreciate that strategy, risk, performance and sustainability are inseparable.

2 2,13 Refer to Chapters 7 and 9 2,14 The Board and its directors should act in the best interests of the Company. 2,15 2,16 The Board should consider business rescue proceedings or other turnaround mechanisms as soon as the Company is financially distressed as defined in the Companies Act of 2008 ("the Act"). The Board should elect a Chairman of the Board who is an independent nonexecutive director. The CEO of the Company should not also fulfill the role of Chairman of the Board. The Board and its directors do strive always to act in the best interests of the Company. The solvency and liquidity of the Company is continually monitored to ensure that business rescue proceedings are never required. The Board has elected a Chairman of the Board who is an independent non-executive director. 2,17 The Board should appoint a Chief Executive Officer and establish a framework for the delegation of authority. 2,18 The Board should comprise a balance of power, with a majority of non-executive directors. The majority of the non-executive directors should be independent. The Board has appointed a Chief Executive Officer, who is not the Chairman of the Company. However, a framework for the delegation of authority still has to be developed and established. At present there is a majority of non-executive directors on the Board, the majority of whom are independent. 2,19 Directors should be appointed through a formal process. The Board is in the process of adopting a policy for nominations to the Board and will document and set out the formal process for the appointment of directors in due course. PARRTIALLY 2,20 2,21 2,22 2,23 The induction of and ongoing training and development of directors should be conducted through formal processes. The Board should be assisted by a competent, suitably qualified and experienced Company Secretary. The evaluation of the Board, its committees and the individual directors should be performed every year. The Board should delegate cerain functions to wellstructured committees but without abdicating its own responsibilities. There is no formal process in place for this at present. However, all directors have attended the JSE Director s Induction course.?? The Board is assisted by a competent, suitable qualified and experienced Company Secretary. An evaluation of the Board and its Committees has not been carried out yet as the company is in its first couple of months of listing on the JSE. There is an intention at present to evaluate individual directors in due course.?? The Board has constituted an Audit and Risk Committee, a Remuneration and Nominations Committee and a Social and Ethics Committee, all of which will report back to the Board in due course.

3 2,24 A governance framework should be agreed between the Group and its subsidiary boards. 2,25 2,26 2,27 Companies should remunerate directors and executives fairly and responsibly. Companies should disclose the remuneration of each individual director and certain senior executives. Shareholders should approve the Company's remuneration policy. The Board Committees take on their particular function for all of the Group subsidiary companies. However, there is no document which sets out the levels of authority as between the Board, the Executive and the subsidiaries at present. A remuneration policy still needs to be developed by the Remunerations Committee. The Company does disclose the remuneration of each individual director and prescribed officer in its Remuneration Report in the Annual Integrated Report.. Shareholders will be asked at the Company's Annual General Meeting to approve the Company's remuneration policy by way of a non-binding advisory endorsement. Chapter 3 - Audit committees 3,1 The Board should ensure that the Company has an effective and independent Audit Committee. The Board has ensured that the Company has an effective and independent Audit Committee. 3,2 Audit Committee members should be suitably skilled and experienced independent non-executive directors. 3,3 The Audit Committee should be chaired by an independent non-executive director. 3,4 The Audit Committee should oversee integrated reporting. 3,5 3,6 The Audit Committee should ensure that a combined assurance model is applied to provide a co-ordinated approach to all assurance activities. The Audit Committee should satisfy itself of the expertise, resources and experience of the finance function. All of the Company's Audit Committee members who are independent, are either chartered accountants or have qualifications that are relevant to the functions of the committee and are suitably experienced. The Audit Committee is chaired by an independent non-executive director who is not the Chairman of the Company. The Audit Committee will interrogate the Annual Integrated Report before it is finalised and sent to the printers. This is a work in progress The Audit Committee still has to satisfy itself of the expertise, resources and experience of the finance function and will report back to the Board in this regard.

4 3,7 3,8 3,9 3,10 The Audit Committee should be responsible for overseeing of internal audit. The Audit Committee should be an integral component of the risk management process. The Audit Committee is responsible for recommending the appointment of the external auditor and overseeing the external audit process. The Audit Committee should report to the Board and Shareholders on how it has discharged its duties. Part of the specific functions set out in the committee s charter include the review of the company s internal financial control system. The Audit Committee is an integral component of the risk management process. Included in the Committee Charter is the review of the company s risk management system and the monitoring and review of the effectiveness of the company s internal audit function in the context of the company s overall risk management system. At the beginning of each financial year the Audit and Risk Committee will review the independence of the external auditor and oversee the external audit process. A report by the Audit Committee on how it discharged its duties will appear each year in the Annual Integrated Report. Chapter 4 - The governance of risk 4,1 The Board should be responsible for the governance of risk. 4,2 The Board should determine the levels of risk tolerence. 4,3 The risk committee or audit committee should assist the Board in carrying out its risk responsibilities. The Board does accept responsibility for the governance of risk. The Board does determine the levels of risk tolerence. The Board will delegate the responsibility for oversight of risk management to the Audit and Risk Committee, which will report back to the Board at each Board meeting. 4,4 The Board should delegate to management the responsibility to design, implement and monitor the risk management plan. The Audit and Risk committee has instructed management to develop a risk management policy and report back to it. The risk management plan is an ongoing work in progress. 4,5 The Board should ensure that risk assessments are performed on a continual basis. The Audit and Risk Committee meeting is open at all times to all members of staff who have concerns about new areas of risk. These risks are assessed, monitored and managed by the Audit and Risk Committee. Material and significant risks and their management will be reported on at each Audit and Risk Committee meeting. 4,6 The Board should ensure that frameworks and methodologies are implemented to increase the probability of anticipating unpredictable risks. Through the Audit and Risk Committee the Board will ensure that frameworks and methodologies are implemented to increase the probability of anticipating unpredictable risks. 4,7 The Board should ensure that management considers and implements appropriate risk responses. Management will report to the Audit and Risk Committee which in turn reports to the Board.

5 4,8 The Board should ensure continual risk monitoring by management. 4,9 The Board should receive assurance regarding the effectiveness of the risk management process. Through the Audit and Risk Committee the Board will ensure this. The Audit and Risk Committee will report back to the Board in this regard after receiving sufficient information from management. 4,10 The Board should ensure that there are processes in place enabling complete, timely, relevant, accurate and accessible risk disclosure to stakeholders. There is no formal process in place at the moment. Chapter 5 - Governance of Information Technology 5,1 The Board should be responsible for information technology (IT) governance. 5,2 5,3 IT should be aligned with the performance and sustainability objectives of the Company. The Board should delegate to management the responsibility for the implementation of an IT governance framework. 5,4 The Board should monitor and evaluate significant IT investments and expenditure. 5,5 IT should form an integral part of the Company's risk management. 5,6 The Board should ensure that information assets are managed effectively. 5,7 A risk committee and Audit Committee should assist the Board in carrying out its IT responsibilities. IT risk is an area that is currently and will in the current financial year be a focus area for the Board through the Audit and Risk Committee. The Audit and Risk Committee does assist the Board with regard to IT risk. Chapter 6 - Compliance with laws, codes, rules and standards 6,1 The Board should ensure that the Company complies with applicable laws and considers adherence to nonbinding rules, codes and standards. This is monitored by??? who reports to the Board throughxxxxxxxxxxx. 6,2 The Board and each individual director should have a working understanding of the effect of the applicable laws, rules, codes and standards on the Company and its business. There is no formal CPD process in place to ensure all directors are current. 6,3 Compliance risk should form an integral part of the Company s risk management process. Compliance risk does form an integral part of the Company's risk management process. 6,4 The Board should delegate to management the implementation of an effective compliance framework The Board will delegate the implementation of an effective compliance framework and processes to management at the next board meeting..

6 and processes. Chapter 7 - Internal audit 7,1 The Board should ensure that there is an effective risk based internal audit. The Board, through the Audit and Risk Committee, will ensure that there are effective risk based internal audit processes in place.?? 7,2 Internal audit should follow a risk based approach to its plan. The internal audit processes that are in place do not follow a risk based approach. This is still a work in progress. Internal audit should provide a written assessment of the effectiveness of the 7,3 The Company does not have a separate Internal Audit Department at Company's system of internal control and risk management. present. 7,4 The Audit Committee should be responsible for overseeing internal audit. The Audit and Risk Committee had accepted responsibility for overseeing internal audit. 7,5 Internal audit should be strategically positioned to achieve its objectives. Chapter 8 - Governing stakeholder relationships 8,1 8,2 The Board should appreciate that stakeholders' perceptions affect a Company's reputation. The Board should delegate to management to proactively deal with stakeholder relationships. The Board is not aware of this, however, stakeholder relationships in general will be receiving attention from the Board in the current financial year. Whilst management does deal pro-actively with stakeholder relationship, this will be a focus area for the Board. 8,3 The Board should strive to achieve the appropriate balance between its various stakeholder groupings, in the best interests of the Company. 8,4 8,5 Companies should ensure the equitable treatment of shareholders. Transparent and effective communication with stakeholders is essential for building and maintaining their trust and confidence. 8,6 The Board should ensure that disputes are resolved as effectively, efficiently and expeditiously as possible. Chapter 9 - Integrating reporting and disclosure 9,1 The Board should ensure the integrity of the Company's integrated report. The Board will ensure the integrity of the Company's integrated report. PARICALLY 9,2 Sustainability reporting and disclosure should be integrated with the Company's financial reporting. The Company will issue an annual integrated report which incorporates sustainability reporting with financial reporting.

7 9,3 Sustainability reporting and disclosure should be independently assured. The Audit and Risk Committee will assist the Board by reviewing the annual integrated report to ensure that the information contained in it is reliable and does not contradict the financial aspects of the report. External assurance is not believed to be necessary at present.