AFRICAN DAWN ANNUAL REPORT 2019 Application of principles in King IV™ continued Principle 8: The governing body should ensure that its arrangements for delegation within its own structures promote independent judgement, and assist with balance of power and the effective discharge of its duties. Delegation of responsibilities are allocated to the board and executives and to the Audit and Risk, Remuneration and Social and Ethics Committee. There is Board Charter delegating roles and putting committees in place. The committees have charters setting out their responsibilities. There is no nominations committee and once the size of the Company increases this will be implemented. The three independent Board members have been committed to seeing out the difficult times the Company has been through. The Social and Ethics Committee has an independent non-executive director and executives as members. Despite not consisting of a majority of non-executive directors as envisaged by King IV™, the Board is of the opinion that the current composition of the Social and Ethics Committee is satisfactory to discharge the Committee's roles and responsibilities. With a small Board the cross-membership of the committees is in place. There is a balanced distribution of power and no one individual is able to dominate the other Board members. There is an Audit and Risk Committee report in the Annual Financial Statements setting out their role, responsibility and focus. 19 With the additional Board member this will need to be reviewed during the year. Principle 9: The governing body should ensure that the evaluation of its own performance and that of its committees, its chair and its individual members, support continued improvement in its performance and effectiveness. The governing body should evaluate the performance of the independent and executive members. An informal evaluation of the Board members is done annually. A discussion is held at the Remuneration Committee meeting and any issues would be raised with the individuals should this become necessary. Once the Company grows it will be necessary to review this process and put formal processes in place. Principle 10: The governing body should ensure that the appointment of, and delegation to, management contribute to role clarity and the effective exercise of authority and responsibilities. The governing body appoints the CEO. The CEO is accountable to the governing body. He is not a member of the Audit and Risk or Remuneration committee but attends the audit and risk committee meetings together with the CFO. When the previous CEO left the current CEO took over the role as a temporary measure. He has since also been appointed acting Chairman. Now that the new major shareholder has been appointed to the Board, he has taken on the role of the Chairman and the CEO has reverted to his position. The roles are now separate but the Chairman is non-independent as he is a major shareholder of Afdawn. The lead independent director is still in place. The governing body should ensure it has access to professional and independent guidance on governance and legal duties. Statucor has been engaged to perform the company secretarial duties of the Company, the JSE sponsor is PSG Capital and a firm of lawyers assists with legal matters of the Company.
AFDAWN AR FINAL 2019
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