The Board of directors recognises that good corporate governance is essential to protect the interests of all stakeholders. Business is conducted in accordance with the principles of openness, integrity and accountability, as advocated in the King Code of Governance for South Africa, 2009 (the King III Report). The Board is committed to applying and enforcing appropriate corporate governance principles, policies and practices within each of the Group’s operations. Ultimately, the Board is the focal point of the Group’s corporate governance system, and is accountable and responsible for ensuring compliance with King III.
The Board acknowledges its responsibility to ensure that the principles of good governance are observed, and the directors collectively and individually acknowledge their responsibilities and duties in terms of the JSE Listings Requirements and other relevant legislation.
The Board has reviewed the Group’s organisational structures and corporate governance procedures and has implemented measures to ensure ongoing compliance with good corporate governance practices. Through this process, all stakeholders can be assured that the Group is being managed according to prudently determined risk parameters and in compliance with generally accepted corporate practices. The Group’s audit committee is mandated with monitoring the Group’s compliance with King III and the Companies Act.
Changes during the year
Mr RC Bowen was appointed as independent non-executive director with effect from 28 September 2011.
Mr NJ Crosse resigned as chairman of the remuneration committee and Professor SS Loubser, an independent non-executive director, was appointed in his stead. Dr WT Marais stepped down as a member of the remuneration committee and Ms D Naidoo was appointed as a member of the remuneration committee.
The Board reviewed and approved the charter for the social, ethics and risk committee.
Statement of compliance
The JSE Listings Requirements require JSElisted companies to report on the extent to which they comply with the principles set out in the King III Report. During the year in review the Group has applied the recommendations of the King III Report, except for the following instances:
||The chairperson of the Board is not an independent non-executive director as defined by King III
||Mr Crosse, the non-executive chairman, chairs the Board. The Board is of the opinion that Mr Crosse’s experience and knowledge of the chemical industry and the Group, as set out in more detail below, is critical to his chairmanship and in helping the Board to set the strategic direction of the Group|
||Mr R Havenstein was, however, appointed as lead independent director in accordance with the recommendations of King III|
||The head of internal audit does not report functionally to the audit committee but to the Group finance director
||The Group finance director assumes overall responsibility for the finance function in the Group and therefore the Board deemed it appropriate that internal audit, as part of the finance function, should report to the Group finance director. The head of internal audit, however, does report on the execution of the internal audit function’s responsibilities and its findings to the audit committee|
||In addition, he has direct access to the audit committee if required and meets on occasion with the Group managing director|
||The Board does not have a nomination committee to assist with the appointments of new directors or the reappointment of retiring directors.
||The procedures for the appointments of new or retiring directors are a matter for the Board as a whole and all directors are invited to assist in nominating potential candidates for appointment to the Board, as more fully set out below|
||Sustainability reporting is not independently assured in accordance with a formal assurance process
||The Board has deemed that at present assurance of sustainability reporting by the audit committee and the social, ethics and risk committee is appropriate and sufficient|
||Management has adopted the CobiT® framework for IT Governance, and the audit committee is reviewing the progress of implementation
||This is considered as a continuous improvement process|
The Board of directors
As recommended by the King III Report, Omnia Holdings Limited has a unitary Board structure, comprising a majority of nonexecutive directors independent of management. As at 31 March 2012 the Board comprised 11 directors, of whom seven are independent non-executive directors, two are non-executive directors and two are executive directors. The Board as a whole selects and appoints new directors. A formal procedure applies to all appointments, which are confirmed by shareholders at the following annual general meeting.
The guidelines contained in the JSE Listings Requirements are used to test the independence and category most applicable to each director. Prior to any appointment, potential Board appointees are subjected to a fit and proper test, as required by the Companies Act (No 71 of 2008) and the JSE Listings Requirements.
To ensure a clear division of responsibilities, the roles of chairman and Group managing director are separate. The chairman and the Group managing director jointly provide leadership and guidance to the Group.
The Board met seven times during the 2012 financial year. Details of directors’ attendance of Board meetings during the year are provided in the annual report.
Mr Crosse has served as non-executive chairman since 2000. As chairman, he is responsible for ensuring the integrity and effectiveness of governance practices. His role is to provide continuity, experience, governance and strategic advice. He leads the Board and is responsible for representing the Board to shareholders. His particular areas of responsibility include strategic planning, maintaining relationships with principals, government and customers, transformation, corporate relations, top-level contact with regulatory bodies, and guidance on local and foreign acquisitions. Mr Crosse has been with Omnia for more than 30 years. His energy, enthusiasm and thorough knowledge of the chemical industry have helped guide the Group to its current success.
The chairman’s level of involvement is considered essential by the Board, given the intrinsic knowledge and experience he brings to the effective running of the Board and guidance of the management team. To this end he consults with and provides strategic input and advice to the Group managing director on a regular basis.
Omnia’s non-executive directors bring a diversity of experience, insight and independent judgement on issues of strategy, performance, resources and standards of conduct, while contributing to decision-making through their knowledge and experience. They are individuals of high calibre and integrity who provide a depth of wisdom based on their knowledge and experience. To protect shareholders’ interests, the independent directors ensure that no one individual director has unfettered powers of decision-making and authority.
The independent non-executive directors are subjected to an annual assessment of their independence by the Board. Non-executive directors who have served longer than nine years are subjected to a rigorous annual evaluation of their independence.
Being involved in the day-to-day business activities of the Group, executive directors are responsible for ensuring that the decisions, strategies and views of the Board are implemented.
Mr Humphris was appointed as Group managing director in 1999. He reports to the Board and is responsible for ensuring the smooth running of the day-to-day business of the Group, as well as guiding the implementation of policies and strategies adopted by the Board. In addition, he is responsible for developing and recommending to the Board a long-term strategy and vision for the Group that will generate stakeholder value, as well as developing and recommending to the Board annual business plans and budgets that support the Group’s long-term strategy.
Mr Fitz-Gibbon was appointed as Group commercial director in 2006 and as Group finance director in 2010. He reports to the Group managing director and is responsible for all the financial affairs of the Group and, in addition, has responsibility for information technology, the Group’s quantum initiative programme, internal audit, the supply chain centre of excellence, central transport services and the Group’s Mauritius-based investment holding and trading business, Omnia Group International Limited.
The Board charter
The Board has adopted a charter defining its responsibilities, the terms of which include:
- Providing strategic direction to the Group and being responsible for adopting strategic plans (such as strategies and plans originated by management) and, in particular, approving the five-year strategic plan
- Approving the annual business plan proposed by management
- Retaining full and effective control over the Group, and monitoring management’s implementation of the approved annual budget and strategies
- Appointing the Group managing director, who is accountable to the Board
- Preparing the Group’s financial statements, interim report and preliminary announcement, and ensuring the integrity and presentation thereof
- Assessing the viability of the company and of the Group on a going-concern basis
- Determining director selection, orientation and evaluation
- Ensuring the Group has appropriate risk management, internal control and regulatory compliance procedures in place, and that these are communicated to shareholders and other stakeholders openly and promptly
- Establishing subcommittees of the Board with clear terms of reference and responsibilities, as and when appropriate
- Monitoring the non-financial aspects relevant to the business
- Considering and, if appropriate, approving the declaration of dividends to shareholders (which are sanctioned by the shareholders when the annual financial statements are approved at the annual general meeting)
- Finding the correct between confronting to governance constraints and performing in an entrepreneurial way
- Evaluating its own performance as a whole, the performance of management and that of subcommittees of the Board, including reviewing both its charter and methods of self-evaluation from time to time
- Determining the appropriate code of ethics to ensure the integrity of the business affairs of the Group
Directors’ interests in terms of other Board positions and contracts are regularly declared, recorded and updated. Board members are required to recuse themselves when participating in deliberations or decisionmaking processes that could in any way be affected by a conflict of interest. During the year under review none of the directors declared a material interest in any contract or arrangement entered into by the Group.
The Board defines levels of materiality, reserving specific powers and delegating other matters with the necessary authority to management. The Board has adopted a formal resolution framework that serves as an authority matrix guideline.
Notwithstanding the mandate given to the audit, remuneration, and social, ethics and risk committees, the Board is ultimately accountable and responsible for the performance and affairs of the Group. Delegating authority to Board committees or management does not in any way mitigate or discharge the Board and its directors of their duties and responsibilities.
Selection and appointment
In terms of the company’s memorandum of incorporation, one-third of the directors retire annually and, if eligible, stands for re-election. Their names are submitted for re-election at the annual general meeting.
Non-executive directors have no service contracts with the company and are appointed for specific terms. The Board has adopted a policy on the procedure for the appointment of directors. All directors are invited to assist in the identification and nomination of potential candidates. New appointments to the Board are confirmed at the following annual general meeting in terms of the company’s memorandum of incorporation.
Mr FD Butler, Mr NKH Fitz-Gibbon, Mr RB Humphris and Prof SS Loubser will be retiring at the forthcoming annual general meeting and will stand for re-election. Brief CVs are provided in the notice of the AGM sent out together with the integrated annual report.
Induction and development
Newly appointed directors undergo an induction exercise appropriate to their needs. The company secretary assists the chairman and the Group managing director with the induction and orientation of directors, including arranging specific training if required.
The Group is committed to continuing director development in order to build on their expertise and develop a more detailed understanding of the business and the markets in which the Group operates.
In addition, individual directors may, after consulting with the chairman and Group managing director, seek external independent professional advice on matters concerning the affairs of the Group, and in connection with the discharge of their responsibilities as directors, at the expense of the Group.
While the Board remains accountable and responsible for the performance and affairs of the company, it delegates to management and Board committees certain functions to assist the Board in properly discharging its duties.
Each Board committee acts within agreed, written terms of reference that are reviewed and updated from time to time. The chairperson of each Board committee reports back to the Board on the deliberation of the committee meeting, and minutes of Board committee meetings are provided to the Board for comment and noting.
The chairperson of each Board committee is required to attend annual general meetings to answer questions raised by shareholders. The established Board committees are as follows:
- Audit committee
- Social, ethics and risk committee
- Remuneration committee
During the financial year under review, the audit committee comprised three independent non-executive directors, appointed by shareholders at the 2011 annual general meeting.
The chairman, Ms HH Hickey, is an independent non-executive director. The Group managing director, finance director, head of internal audit and the external audit partner are invited to attend meetings. The audit committee met on three occasions during the year under review. Details of the attendance at meetings by members of the audit committee are provided in the annual report.
The audit committee operates according to the provisions of the Companies Act and written terms of reference approved by the Board, which were reviewed in the year in accordance with the King III Report and the Companies Act. The responsibilities of the audit committee include:
- Oversee integrated reporting, and in particular all factors and risks that may impact the integrity of the integrated report
- Review the interim and annual financial statements and consider whether they are complete, consistent with information known to the committee members and reflect appropriate accounting principles
- Review the adequacy of management’s efforts in maintaining effective internal control systems, including information technology security and control
- Review the performance of the external auditors and exercise final approval on the appointment or discharge of the auditors
- Review the performance of internal audit and ensure that no unjustified restrictions or limitations on their activities exist
- Review the Group’s finance function to satisfy itself of its expertise, resources and experience, assess the expertise and experience of the Group finance director and disclose the results of the review in the audit committee’s report in the company’s annual financial statements
- Exercise oversight of financial reporting risks, internal financial controls, fraud and non-compliance risks as these relate to financial reporting and IT risks as these relate to financial reporting
Services rendered by the external auditors during the year under review, and approved by the audit committee, comprised mainly compliance and other assurance-based engagements, including opinion work not related to or associated with any prohibited services in terms of current policy.
Both the internal and external auditors have unrestricted access to the audit committee. The external and internal auditors may report findings to the committee in the absence of members of executive management. It is a duty of the audit committee to ensure that the independence of the external auditor is not impaired.
During the financial year under review PricewaterhouseCoopers Inc. acted as the external auditors of the company. The audit committee is satisfied that the external auditors observe the highest levels of business and professional ethics and that their independence is not impaired. The audit committee has also reviewed the external auditor’s registration requirements in terms of the JSE Listings Requirements and is satisfied that the external auditors are compliant.
The audit committee is responsible for recommending to the Board and shareholders at the annual general meeting, for consideration, the approval and appointment of the external auditors.
The audit committee has, in accordance with the JSE Listings Requirements as amended, evaluated the experience and expertise of the Group finance director and is satisfied that he has the requisite experience and skills to fulfil his responsibilities competently.
Members of the audit committee conducted a self-evaluation exercise to identify areas that require attention and appropriate action.
Based on this self-evaluation exercise, the audit committee will focus on strengthening its oversight role in relation to legal compliance and ensuring appropriate continuous development for audit committee members. At the end of each financial year the audit committee reviews compliance with its terms of reference and makes recommendations to address any areas which may require improvement. During the year under review the audit committee has satisfied its obligations in accordance with its terms of reference. The audit committee has also evaluated its compliance with the Companies Act and the amendments to the JSE Listings Requirements, as and when applicable. The members were satisfied that the committee met all of the requirements.
The Group maintains systems of internal control over financial reporting and the safeguarding of assets against unauthorised use, acquisition or disposal. The internal audit function monitors these systems of internal control and reports its findings and recommendations to management. Corrective action is taken as and when control deficiencies or opportunities for improvement in the systems are identified.
The purpose, authority and responsibility of the internal audit function are formally defined in an internal audit charter, which has been approved by the Board and is consistent with the recommendation of the Institute of Internal Auditors.
The adequacy and capability of the Group’s internal audit structure is subject to review by the audit committee to ensure that adequate, objective internal audit assurance standards and procedures exist within the Group. In this regard, appropriate recommendations are made by the audit committee from time to time to ensure the continued improvement of the internal audit department.
The audit committee tables audit plans for each business annually. Follow-up audits are conducted in areas where major weaknesses are identified.
The system of internal control is designed to manage rather than eliminate the risk of failure to achieve business objectives and can provide reasonable, but not absolute, assurance against material misstatement or loss.
The Group maintains a vigilant stance against corporate crimes and to that end a whistleblowing mechanism has been implemented with reports submitted directly to the audit committee through internal audit.
The whistle-blowing line is intended to ensure that a proactive approach is applied to fraud with a focus on prevention, detection and investigation. This provides assurance to stakeholders that fraud risks within the company are being managed and mitigated.
Social, ethics and risk committee
During the year under review the Board reviewed the charter of the risk committee and deemed it appropriate to extend it to include the functions and responsibilities of the social, ethics and risk committee, as required by the Companies Act.
The social, ethics and risk committee is thus responsible for ensuring the Group’s compliance and adherence to appropriate risk management processes as recommended by the King III Report and approved by the Board. It also monitors the Group’s activities and standing in relation to the promotion of social and economic development, good corporate citizenship (including the promotion of equality, and environmental, health and public safety), good labour conditions and good business ethics, as required by the Companies Act.
It comprises members of the Board and executive management, and is chaired by Mr Butler, an independent non-executive director. It is the Board’s view that management has the requisite experience and knowledge to identify and appropriately manage the business risks of the Group.
A separate management risk committee operates in accordance with the framework and guidelines of a written risk policy. It reports to the Board social, ethics and risk committee and has established itself as an important management function, with inputs from all levels of management.
The social, ethics and risk committee acts in accordance with the provisions of the Companies Act and written terms of reference as approved by the Board. Its responsibilities include:
- Monitoring the Group’s activities and policies to ensure compliance with the provisions of section 72(4) to (10), as read with Regulation 43 of the Companies Act, and to ensure that employees comply with these policies
- Drawing matters within its mandate to the attention of the Board as occasion requires
- Reporting to the shareholders at the company’s annual general meetings on matters within its mandate
- Reviewing the regular reports provided by the management risk committee
- Review and debate the risk register of strategic and major risks in these reports
- Reviewing any major incidents
- Debating specific risk areas of concern
- Applying a risk-based approach to the analysis of strategic risk issues within the Group and its wider environment
- Identifying risk-retention capacity and values at risk
- Recommending risk tolerance levels
- Ensuring that the Group risk management process is being adequately controlled and continuously assessed
- Undertaking an annual internal assurance review
- Reviewing the material findings of any examinations by regulatory agencies on risk-related issues
- Reviewing the process for communicating King III to Group employees and for monitoring their risk-related compliance
- Obtaining bi-annual updates from management and Group legal counsel regarding compliance and other legal matters
- Reporting to the Board on how it has discharged the duties and activities assigned to it by the charter and Board
- Reviewing any other reports the Group issues that relate to risk
- Assuring the audit committee that it has monitored the risk management processes within the Group and that it is satisfied that current processes are appropriate and effective
The risk management responsibilities of the committee are informed by the Group’s risk management philosophy, which are summarised as follows:
- Risk is an inherent part of operating a business, in that taking no risk implies no reward
- Ensure a culture of open and frank debate on risk
- Know, understand and manage the risks affecting the business, consistent with achieving business objectives and enhancing shareholder value
- Reduce the cost of risk over the long term
- Minimise the possibility of catastrophic loss
- Carry the costs of the risks within the business as far as possible, depending on assessments of the Group’s current strength of cash flow
- Ensure flexible and appropriate responses to changes in the business and legislative environment that impact risks
- Continuously develop and implement an ongoing risk management process throughout the Group
- Purchase adequate level of indemnity and cover, where economical and appropriate
The social, ethics and risk committee met three times during the year under review. Details of attendance by members of the risk committee are provided in the annual report.
While operational risk can never be fully eliminated, the Group endeavours to minimise it by ensuring that the appropriate infrastructure, controls, systems and human resources are in place throughout its business units.
At the operational level, senior management identifies major risks, promotes awareness, introduces an applicable control environment and procedures, and applies risk monitoring. The philosophy of the Group’s short-term insurance programme is to self-insure inevitable and smaller losses that are not administratively cost effective to submit to insurers, and to develop self-insurance and aggregate deductibles over the longer term. The Group transfers only potential catastrophic losses to insurers. Apart from motor vehicles, assets are traditionally insured for full replacement values. The Group has profiled and listed a wide range of risks, which are continually updated.
The top current headline risk sources are listed in the following table, along with their primary mitigation strategies:
|Headline risk source
|Foreign exchange rate fluctuations
||Hedging committee and appropriate hedging policy|
|Global volatility of commodity prices
||Hedging committee and appropriate hedging policy|
|| Appropriate stock management|
|Supply chain for imported ammonia – dependency on Transnet
||Dedicated personnel to manage the supply chain|
|| Increased buffer storage|
|Poor plant/site performance
||Planned maintenance and spares management|
||Emergency response plan|
|Shrinking of South African manufacturing industry
||Stringent cost management|
|Poor product quality
||Quality assurance policy|
||Own ISO qualified laboratories|
||Effective quality control|
|Competition Law litigation
||Annual compliance declaration by employees|
|Labour relations/employment equity and talent management
||Share and incentive schemes|
||Bursaries and training|
The Group has adopted a more balanced profile and made great strides in recent years to reduce its risk exposures to any single product, industry or customer type. The committee reviewed the risk management profile of the Group during the year and has made appropriate recommendations to address any identified gaps.
To ensure sufficient impartiality, the remuneration committee was restructured during the year and now comprises three non-executive directors and is chaired by an independent non-executive director. The Group managing director and the Group human resources director attend meetings by invitation.
Other directors and remuneration specialists may be invited to attend meetings to offer special expertise, or to explain the performance of an incumbent under review. The committee met three times during the 2012 financial year. Details of the attendance of members of the remuneration committee are provided on page 101 of this report.
The remuneration committee operates under written terms of reference, which are reviewed from time to time. The main responsibilities of the remuneration committee are to:
- Obtain research on market-based compensation practices and levels
- Annually review and decide on the compensation packages and other terms of employment of the executive directors, and the Group managing director’s immediate reports. Benchmarks are annually obtained through a customised survey conducted by leading compensation consultants
- Review and decide on the annual allocation of short-term incentives of the executive directors and the senior management of the Group
- Develop, implement and review the participation of the executive directors and other senior managers in the Group’s long-term share incentive schemes
- Establish and decide on guidelines relating to the annual review of the compensation and benefit arrangements for all employees of the Group
The remuneration committee’s overall strategy is to ensure that the Group’s pay practices remain competitive and that employees are rewarded for their contribution to the Group’s operating and financial performance. To remain competitive, remuneration is regularly benchmarked against the broader industry and revised annually through internal mechanisms such as remuneration committee meetings and external discussions at industry bargaining forums.
The chairman’s compensation does not form part of the mandate of the remuneration committee. A proposal is prepared annually by the non-executive members of the Board and presented for approval to the shareholders at the annual general meeting, for implementation in each October.
Succession planning for the Group managing director is not dealt with by the remuneration committee, but by the Board as a whole.
The Group’s remuneration policy is not only aimed at attracting and retaining top talent, but is also designed to ensure that its people are challenged and appropriately rewarded for exceptional performance. To this end, the annual packages of management and the majority of professional and skilled staff include a fixed portion and a variable portion. The amount awarded in the variable portion takes into account the performance of the individual, the division where he or she works and the overall performance of the Group. These calculations are made annually and, based on recommendations from management, approved by the remuneration committee. In addition to competitive salaries and short-term incentives, employees also have access to the typical fringe benefits offered by large companies such as medical aid, retirement funds and death and disability assistance.
Short-term incentives for senior management are based on an economic value added (EVA) formula. The annual EVA incentive is calculated as a percentage of the EVA that the Group generates in that year. A portion of the annual EVA incentive is allocated and paid to senior management in the year that it is generated, and the balance is allocated and paid over each of the following two years. This rolling three-year allocation and payment policy is to prevent a “feast or famine” scenario and to encourage the retention of participants. Other employees, where applicable, participate in target-based commission and other short-term incentive schemes, which are regularly reviewed to drive defined performance targets and behaviours.
The Omnia Board has long recognised the need for significant management and employee ownership participation within the Group and believes that the Group’s success is related to the excellence and long-term dedication of its people. The Board also believes that an effective partnership arrangement between the shareholders of Omnia, its management and its people enhances the wealth of the Group.
According to these objectives, the Group has the following share schemes in place:
Executive Share Scheme “Nanotron”
The executive scheme referred to as Nanotron (as per the circular to shareholders dated 26 November 2009) runs concurrently with Omnia’s five-year plan cycle and depends on the Group achieving its five-year targeted 8% per annum real growth rate. The current five-year cycle ends on 31 March 2014. A limited number of senior managers participate in the scheme. Nanotron differs from other schemes in that participants use their own resources to buy into the scheme and consequently bear a higher investment risk.
Partnership with Management Scheme “Partner 4 Scheme”
The general staff scheme referred to as “Partnership with Management Number Four” is linked with Omnia achieving its current five-year plan targets in a similar manner to Nanotron. This scheme is limited to middle management and professional staff. It is based on the payment of a bonus, of which the after-tax amount is used to purchase Omnia shares on the open market on behalf of the participant. Participants are required to retain their shares for at least two years before these can be traded in any manner.
Phantom “Share” Scheme
While the Partner 4 Scheme only applies to South African employees, selected employees in countries outside South Africa participate in the cash-settled “Phantom Share Scheme”, which is also based on achieving Omnia’s five-year plan targets.
Omnia Share Option Scheme and Share Appreciation Rights Scheme
The equity-settled Share Option and the cash-settled Share Appreciation Rights schemes are not target-based and are only used as retention mechanisms for a limited number of key employees. Both schemes run over a five-year period and accrue at the rate of 20% of the allocation after two years, a further 20% at the end of year three and four and 40% at the end of year five. They do not run concurrently with the five-year Nanotron and Partnership with Management schemes and are subject to employment criteria.
Sakhile 1 and 2
As part of its BBBEE initiative, Omnia established in 2007 the Sakhile equity scheme for employees, which places 10% of the company in the hands of our South African employees. At the time of the launch, eligible employees were awarded 1 000 shares each. The Sakhile initiative ensures that the Group’s broader employee base benefits directly from its growth over the longer term, thus aligning their interests with those of shareholders. As a separate legal entity, Sakhile Initiative (Pty) Limited is now overseen by a Board of directors who are nominated to their positions by members.
A second phase of the employee share scheme, Sakhile 2, was launched during 2010. Aimed at black members of Omnia’s management and professional teams, a portion of the shares allocated to the scheme are to be used to attract skilled individuals to the Group and to retain talented black Board members, executives and employees.
Further detail of the share schemes are provided in the annual report.
Detail of the remuneration paid to directors and prescribed officers are provided in the annual report.
The Group managing director has an employment contract containing a six-month notice period and a restraint of trade for a period of three years. The Group finance director and prescribed officers have employment contracts that contain three calendar months’ notice period and restraints of trade that vary between one and two years.
Integrated annual report
The directors are responsible for the preparation of the integrated annual report. Management fulfils its responsibilities by maintaining adequate accounting records to ensure the integrity of the integrated annual report. This is accomplished by systems of internal control designed to provide reasonable assurance on their reliability. Such controls provide the Group with the assurance that its assets are safeguarded, transactions are executed in accordance with management’s authorisations, and financial and other records are reliable. This is augmented by the Group’s ethics and prescribed policies and procedures, which are regularly updated to take cognisance of shifting circumstances in the financial and operational environment.
The journey to full compliance with integrated reporting will take a few years and will entail continuous improvement to evolving standards.
The company secretary
The company secretary is responsible for providing the Board collectively, and each director individually, with guidance on the discharge of their responsibilities in terms of the legislative, regulatory and governance requirements. All the directors have unlimited access to the advice and services of the company secretary. The company secretary plays a pivotal role in the company’s corporate governance process and ensures that, in accordance with the pertinent laws, the proceedings and affairs of the Board of directors, the company itself and – where appropriate – shareholders are properly administered. The company secretary also acts as the compliance officer and delegated information officer of the Group, and is responsible for the execution of statutory requirements applicable to those responsibilities.
Code of conduct
Omnia prides itself on its reputation for ethical conduct that it has built up with all its stakeholders over many years. This stems from the uncompromising belief that honesty, integrity, professionalism and service must underpin every relationship entered into with employees, management, customers, suppliers, the government and the communities in which the Group operates.
The Group has developed a Code of Conduct (the Code), which has been fully endorsed by the Board and applies to all directors and employees. The Code is regularly reviewed and updated as necessary to ensure that it reflects the highest standards of behaviour and professionalism. The directors believe that the ethical standards of the Group as stipulated in the Code are adequately monitored and are being met. Where there is non-compliance, the appropriate disciplinary procedures are consistently enforced. The Group responds promptly to offences to prevent their recurrence.
In summary, the Code requires that, at all times, all company personnel act with the utmost integrity and objectivity and in compliance with the letter and the spirit of national laws and company policies. The Code is provided to each employee as part of induction training, and employees annually sign declarations confirming their compliance with the Code.
Dealing in securities
The Group has a policy in place to ensure that it is compliant with all laws and regulations governing insider trading and trading during prohibited periods. This policy and practice complies with the Securities Services Act, the JSE Listings Requirements and all other relevant legislation. To comply with this policy and practice, the Group restricts its directors, officers and other employees from dealing in the company’s securities prior to any formal announcement in respect of its financial results, or during any other period where such dealings may be considered price sensitive. The policy also regulates the dealings by directors in Omnia Holdings’ securities, as required by the JSE Listings Requirements. This policy is implemented and monitored by the company secretary. To comply with JSE Listings Requirements, the chairman approves all share transactions by the company and major subsidiary directors prior to each transaction. The Group managing director approves all share transactions by the chairman prior to each transaction. This policy is reviewed and updated from time to time to ensure that it remains compliant with any changes in legislation.
Attendance at Board and Board committee meetings
The record of attendance by each director at Board meetings and Board committee meetings for the financial year ended 31 March 2012 is set out below:
||Social, ethics and risk committee
||Remuneration committee |
| Number of meetings held
| NJ Crosse
| RC Bowen*
| FD Butler
| NKH Fitz-Gibbon
| R Havenstein
| HH Hickey
| RB Humphris
| Prof SS Loubser
| Dr WT Marais
| SW Mncwango
| D Naidoo**
||Appointed 28 September 2011|
||Appointed to remuneration committee 27 October 2011|
Relations with shareholders and stakeholders
The Group pursues dialogue with institutional investors based on constructive engagement and the mutual understanding of objectives having regard to statutory, regulatory and other directives overseeing the dissemination of information by companies and their directors. Management communicates the strategy and performance of the Group with investors and analysts through various presentations and meetings. The preparation of this information is based on the standards of promptness, relevance and transparency.
The Group makes every effort to ensure that information is distributed via a broad range of communication channels; with regard for security and integrity, while bearing in mind the need for critical financial information to reach all shareholders simultaneously and timeously. In communicating the Group’s strategy and results, the Group makes use of communication channels such as the Omnia website (www.omnia.co.za), Security Exchange News Service (SENS), as well as print, radio and television media.
The Board accepts its duty to present a balanced and understandable assessment of the Group’s position in reporting to stakeholders. Greater demand for transparency and accountability regarding non-financial matters is always taken into account. All stakeholders with a legitimate interest in the Group’s affairs can obtain full, fair and frank accounts of its performance.
One Capital Advisory (Pty) Limited acted as the company sponsor during the year under review.
The Group acknowledges the importance of its shareholders attending the annual general meeting, as this is an opportunity for shareholders to participate in discussions relating to agenda items and to raise additional issues. Explanatory notes setting out the effects of all proposed resolutions are included in each notice of meeting.
At the end of each year the Board assesses whether the Group continues to be a going concern and whether any factors have significantly changed since the goingconcern assessment at the interim reporting stage. The Board has decided that there is a reasonable expectation that the Group has adequate resources to continue to operate for the foreseeable future, and has therefore prepared the financial statements on a going-concern basis.