BOARD CHARTER REVIEWED ON 17 FEBRUARY 2014 1 INTRODUCTION The board of directors ( the board ) of Reunert Limited ( the Company ) primarily derives its responsibilities and duties to the Company from: the Companies Act, 2008 ( the Companies Act ) the JSE Listings Requirements the Company s Memorandum of Incorporation ( MOI ) the King Code on Corporate Governance in South Africa ( King III ) South African common law 2 PURPOSE The purpose of this charter is to amplify certain aspects of the board s duties and responsibilities. The charter does not provide a list of such duties or responsibilities nor does it replace any applicable requirement or prescription in the Companies Act, the JSE Listings Requirements, the MOI or other applicable South African law. 3 CHARTER TO FORM PART OF APPOINTMENT TERMS This charter, as amended from time to time, forms part of each director s conditions of appointment as director. Page 1 of 10
4 INTEGRITY AND REPUTATION Each of the board members recognises that their professional and personal reputation has a direct and material impact on their involvement with the Company. Therefore, each of the directors undertakes to conduct themselves, both professionally and personally, with integrity, in accordance with the ethics and values of the Company and the laws of South Africa. Each of the directors will conduct themselves at all times with due regard to the reputation and interests of the Company. 5 KING III Unless indicated otherwise, the board considers itself bound to and is responsible for the implementation of the King III principles. The duties and responsibilities of the board, its committees, executive management and the company secretary as contemplated in the King III principles apply to the board (unless indicated otherwise) and, although not repeated in this charter, are binding on the board and its individual members. The board has a preference to follow the recommended practices of King III, but is not bound by them. The board is responsible for publishing a report, at least annually, on the Company s application of the King III principles. 6 SUSTAINABILITY In addition to its fiduciary duties, the board recognises its responsibility to conduct and grow the Company and its interests in a sustainable manner, with due regard to all stakeholders. Page 2 of 10
7 COMPOSITION OF THE BOARD In addition to applicable legislation, the MOI and King III, the composition of the board should aim to reflect professional, racial and gender diversity. 8 RETIREMENT FROM THE BOARD Non-executive directors will retire from the board no later than the shareholders meeting after that non-executive director reaches the age of 70 and upon reaching the age of 70 will not be eligible for re-election as director. Executive directors will retire from the board no later than the shareholders meeting after that executive director reaches the age of 63 and will thereafter only be eligible for election to the board as non-executive director, provided the applicable King III principles and practices have been complied with. The board may extend the retirement age for executive directors in certain instances up to no more than 70 years of age if it believes such extension to be in the best interest of the Company. 9 INTERACTION WITH SHAREHOLDERS The board must deliberate all matters that require shareholder approval before it refers these matters to shareholders for decision making. Where appropriate the board may make recommendations to shareholders. The board will provide material and accurate information to shareholders on matters to be considered by shareholders. The chairman of the board, the chairman of the audit committee, the chairman of the social, ethics and transformation committee, the chairman of the remuneration committee and all executive directors will be required to attend shareholders meetings. Other directors must make themselves available to attend any shareholders meetings and to answer questions posed by shareholders when requested to do so by the chairman of the board. No non-executive director may interact with shareholders or the media in relation to any matter affecting the Company, without approval by the Company s chief executive officer and/or the chairman. Page 3 of 10
10 BOARD COMMITTEES AND MANAGEMENT The board is assisted in the governance of the Company by board committees, executive management and is advised by the company secretary. The board continually monitors and evaluates the performance of the committees and individuals that either advise the board, or that exercise any delegated function or authority on behalf of the board. In this regard: The chairman of each board committee is obliged to report to the board on that committee s activities. The minutes of committee meetings are provided to the board for noting. The committees are obliged to report to the board on pertinent findings of any evaluation conducted in respect of the performance of such committee The board is entitled to withdraw its mandate to any committee or individual at any time that the board deems it appropriate. 10.1 Annual assessment Each board committee is obliged to perform an annual self-assessment of its performance and effectiveness and to report the results of this self-assessment to the board. As the investment committee does not have a pre-set meeting schedule, its annual selfassessment will be done by its members concurrently with the board self-assessment and the results will be reviewed and reported at a board meeting. The board may, as and when it deems appropriate, conduct additional evaluations of the performance and effectiveness of any board committee or any one or more of the members of a board committee. Page 4 of 10
10.2 Board committees The extent to which each committee exercises delegated authority and advises the board is set out in that committee s terms of reference, relevant board resolutions and legislation (to the extent applicable). The relevant administrative framework for each committee is contained in paragraphs 11.2 and 11.3 of the Charter, the relevant board committee s terms of reference and applicable legislation (to the extent applicable). The following are standing committees of the board: Audit committee Investment committee Nomination committee Remuneration committee Risk committee Social, ethics and transformation committee 10.3 Review of board committee s terms of reference The terms of reference of any board committee may be reviewed by that board committee at any time on request by any of its members The terms of reference of all board committees must be reviewed by these committees at least annually, calculated with reference to the date that the terms of reference were last approved by the board. Any amendment to the terms of reference that a board committee deems appropriate will be recommended to the board for consideration and, if the board supports such amendment, approval. As the investment committee does not have a pre-set meeting schedule, the annual review will be done by the members of the investment committee concurrently with the board s review of the board charter and proposed amendments will be discussed and approved at a board meeting. Page 5 of 10
10.4 Other committees The following committees, although not board committees, also assist and advise the board: Group executive committee IT Steering committee, through the audit committee The board may appoint additional standing or ad hoc board or non-board committees to the extent that it deems appropriate. 10.5 Delegation of authority The board issues and annually reviews a formal delegation of authority document, which contains guidance to executive management and committees on particular aspects and levels of delegated authority applying to various stipulated matters including in respect of transactions and the extent to which such authority is subject to consultation and information requirements. 11 ADMINISTRATION AND MEETINGS 11.1 Frequency The board meets at least quarterly. Ad hoc meetings will be arranged in accordance with the requirements of the MOI. 11.2 Board and board committees: Annual work plan The board and each of the standing board committees, other than the investment committee, will agree an annual work plan for the carrying out of its mandate. This plan will inform the number, timing and agenda of board or board committee meetings, as the case may be. This work plan must be reviewed annually, but may be revised at any time when the board or the relevant board committee deems it appropriate. Page 6 of 10
11.3 Board and board committees: Agenda, packs and minutes The chairman of the board, with the assistance of the chief executive officer and the company secretary, will prepare an agenda for each board meeting. For each of the board committees, the chairman of the relevant committee, with the assistance of the chief executive officer and the company secretary, will prepare an agenda for each meeting of such board committee. Board packs will, as far as possible, be circulated to directors and any invitees to the meeting at least five business days prior to each meeting. Board committee packs, other than for the investment committee, shall be circulated to the members of the committee, the chairman of the board (if not a member of the committee) and any invitees, at least five days prior to each meeting. As investment committee meetings are often, of necessity, arranged at short notice, investment committee packs will be circulated as long before the meeting as is practicable under the circumstances. Every effort shall be made to provide members with such opportunity to prepare for the meeting as may be possible under the circumstances that exist at the time that an investment committee meeting is arranged. The Reunert group company secretary is the secretary of the board and the board committees, unless the board or any committee resolves otherwise. The minutes of a board and board committee meeting shall: Be completed as soon as possible after the meeting and circulated to the chairman of the board or the board committee, as the case may be, for review and comment. The minutes must be formally considered and approved, subject to amendment as required, by the board or the board committee (other than the investment committee), as the case may be, at its next scheduled meeting. Page 7 of 10
12 RIGHTS OF INDIVIDUAL DIRECTORS Typically the interests of the Company are best served if the board functions as a team. However, where any director deems it in the interest of the Company, he/she may request a one-on-one meeting with the chairman of the board. Any director may, after consultation with the chairman of the board, obtain such external professional advice, at the expense of the Company, as is reasonably necessary for such director or group of directors to discharge their duties to the Company. Any director may request the company secretary to arrange such training or information session as is reasonably necessary for such director or any group of directors to discharge his, her or its duties to the Company. 13 GROUP COMPANIES AND DIVISIONS The Company and its subsidiaries and associates conduct business on a decentralised basis, with each business unit having its own board or divisional board and executive management team. The board will exercise its functions in accordance with the decentralised approach. The rights of the Company as shareholder will be exercised in accordance with a written policy document which indicates specific matters and transactions that require the Company s approval. 14 DEALING IN THE SECURITIES OF THE COMPANY In terms of the JSE Listings Requirements the Company is required to notify the JSE when any director deals in the Company s securities. Directors will provide the assistance and information required by the Company to comply with this requirement. All senior executives of the Company and in the Reunert group must obtain permission from the Company s chief executive officer before dealing in the Company s securities. Page 8 of 10
All directors of the Company, other than the chief executive officer, must obtain written permission from the chief executive officer of the board before dealing in the Company s securities. The company secretary must be notified, in writing, on conclusion of any securities dealings. The chief executive officer must obtain written permission from the chairman of the board, in consultation with the chairman of the remuneration committee, before dealing in the company s securities. The company secretary must be notified, in writing, on conclusion of any securities dealings. Notwithstanding the above, no director who is aware of unpublished price-sensitive information or any immediate family member of such director may deal in the Company s securities. 15 SENS ANNOUNCEMENTS Announcements made by the Company and published on the JSE News Services (SENS) are done in terms of strict guidelines in the JSE Listing Requirements relating to timing and content. Due to the strict timelines that apply, it is often not practical for management to obtain board approval prior to publishing a SENS announcement. However, SENS announcements could have reputational as well as financial implications for the Company and should therefore be subject to as much consultation as is practicable in the circumstances and warranted by the likely consequences of making the announcement. The following announcements do not require approval by non-executive directors, but must be reviewed and approved by either the chief executive officer or the chief financial officer: - Announcements of an administrative nature, for example: No change statement and notice of AGM, results of AGM, dealings in securities by director; - Announcements that arise from a transaction that obtained board approval, for example: acquisition of the Company s shares, finalisation announcements; For other proposed SENS announcements, the chief executive officer, chief financial officer or the company secretary, as the case may be, must consult with the chairman of the board prior to publication of the announcement. The chairman may that person to obtain approval from another director or directors before publishing the announcement on SENS. In the event that the chairman of the board is not available or contactable, the chairman of the audit committee should stand in his stead and provide the necessary authority and should apprise the chairman of the board as soon as practicable thereafter of his/her actions. Page 9 of 10
In addition to the review by the chairman and directors nominated by him, the following will apply to SENS announcements: - Announcements mentioning a director by name must be approved by that director; - Announcements relating to a change in directors must, in addition to the director involved, also be approved by the chairman of the nomination committee; - Announcements relating to any committee must be approved by the chairman of that committee; - Announcements relating to category 1 or 2 transactions must be approved by the chairman of the investment committee and the chairman of the audit committee; - Trading updates must be approved by the chairman of the audit committee; - Other financial announcements, such as financial results announcements and dividend declarations must be approved by a majority of the board. If approval as contemplated above cannot reasonably be obtained before the expiry of the time allowed by the JSE Listings Requirements for the relevant announcement, the chief executive officer, chief financial officer or company secretary may proceed with the publication of the announcement, but must circulate the announcement to the board at the earliest opportunity. 16 APPROVAL OF THIS CHARTER This charter was reviewed, updated and approved by the board on 17 February 2014 Signature Date: The chairman of the board Page 10 of 10