Board Committee

Audit Committee Report

The Audit Committee is a committee of the Board of Directors.  In addition to having specific statutory responsibilities to the shareholders in terms of the Companies Act, it assists the Board through advising and making submissions on financial reporting, oversight of the risk management process and internal financial controls, external and internal audit functions and statutory and regulatory compliances of the Group.

Terms of reference

The Audit Committee has adopted formal terms of reference that have been approved by the Board and these terms are regularly reviewed and updated where necessary.  The Audit Committee has executed its duties during the past financial year in accordance with these terms of reference.

Composition

The committee currently consists of two independent non-executive directors. Lesibana Fosu continued as Chairperson of the Audit Committee during the period under review.  Nhlanhla Khambule and Michael Dlamini resigned as members of the Audit Committee and the Board with effect from 27 March 2010 and 25 May 2010 respectively.  As of 28 February 2011, the Audit committee comprised two members and the following served on the Committee during the period.

Name Qualifications Period Served
L J Fosu (Chairperson) BCom (Hons), CA (SA) 1 March 2010 – 28 February 2011
M R Gahagan BCom (Hons), CA (SA) 1 March 2010 – 28 February 2011
N Khambule MDev Fin, BTech, ABP 1 March 2010 – 27 March 2010
H M Dlamini PR CPM, BSc Construction Management, Dip QS 1 March 2010 – 25 May 2010

The Chairperson of the Board, Chief Executive officer, Chief Financial Officer, Rowan Crowie and representatives from the external and internal auditors attended the committee meetings by invitation.  The external auditors had unrestricted access to the Audit Committee and its Chairperson.

Meetings

The Audit Committee held four meetings during the period. Attendance at these meetings is shown in the table below

Director 10 May 2010 17 May 2010 18 October 2010 31 January 2011
L J Fosu (Chairperson) X X X X
M R Gahagan X X X X
H M Dlamini X X N/A N/A

Remuneration Report 

The Human Resources and Remuneration Committee is mandated by the Sanyati Board to support and advise the Board on the Group’s remuneration philosophy and policy.

Refer to the Corporate Governance Report for details on the composition, meetings and mandate of the Human Resources and Remuneration Committee.  During the year under review, the Board accepted the recommendations of the Human Resources and Remuneration Committee under its delegated powers.  The chairperson of the Board ensures that the Human Resources and Remuneration Committee has access to professional advice from outside the Group where necessary. 

Remuneration Policy

The Sanyati remuneration policy aims to ensure that the group attracts, motivates and retains key, high-performing and critical people who have the right skills, expertise, experience and commitment to deliver results against the Group business goals.  In line with the interests of stakeholders, remuneration is benchmarked against levels in the local market.

Policy on Directors’ remuneration

The directors are appointed to the Board to bring the management and direction of the Group the skills and  experience appropriate to its needs as a leading South African business.

Executive directors’ remuneration

The committee aims to align the executive directors’ total remuneration with shareholders’ interest by ensuring that a portion of their package is linked to the achievement of performance targets.

Executive directors’ salaries comprise a cash salary which is reviewed annually by the committee.  Salaries are compared to pay levels of other South African companies to ensure sustainable performance and market competitiveness.  The individual salaries of directors are reviewed annually in light of their own performance, experience, responsibility and Group performance.  The company makes contributions to defined contribution plans on behalf of the executive directors on the basis of a percentage of cash salary.  Death and disability cover reflects best practice amongst comparable employers in South Africa.  These elements comprise the fixed remuneration component.  Executive directors do not receive directors’ fees.

The tables showing a breakdown of the annual remuneration (excluding equity awards) of the executive directors for the years ended 28 February 2011 and 28 February 2010 are included in the notes to the annual financial statements.

Non-executive directors’ fees

Non-executive directors generally receive fixed fees for service on the Board and Board committees.  Non-executive directors do not receive short-term incentives nor do they participate in any long term incentive schemes.  The fees paid to non-executive directors are approved by the Human Resources and Remuneration Committee, the Board of Directors and shareholders at the annual general meeting.

The tables that show a breakdown of the annual remuneration 9excluding equity awards) of the non-executive directors for the years ended 28 February 2011 and 28 February 2010 are included in the notes to the annual financial statements.

 Risk Management Committee

The directors are responsible for risk management and ensuring that appropriate risk management processes are in place. This encompasses identifying, assessing, managing and monitoring all types of possible risk facing the group

The Risk Management Committee during the year under review consisted of the following directors

  • MR Gahagan (Independent Chairman)
  • RM Crowie
  • ZB Ebrahim
  • MH Lobban
  • JJ Deeb
  • Lj Fosu
  • N Khambule (Resigned 27 March 2010)with the company secretaries in attendance at meetings

The Risk Management Committee, in consultation with the board, ensures that an effective and ongoing risk management process is in place, measuring the potential impact of a risk against a broad set of assumptions and introducing risk mitigation procedures to reduce the exposure to an acceptable level. Formal terms of reference outlining these responsibilities have been adopted by the committee and approved by the board.

The group’s risk management strategy includes the following key elements:

  • An appreciation of the importance of risk management;
  • Setting mission and risk management objectives;
  • Assessing existing solutions for vulnerabilities;
  • Establishing risk management infrastructure and assigning leadership;
  • Compiling a list of risks and assigning areas of responsibilities to various persons;
  • Selecting assessment techniques and defining risk appetite and tolerances;
  • Developing internal communication and reporting structures;
  • Monitoring the implementation and execution of risk management; and
  • Integrating risk management into existing operational systems.

The following key areas of risk have been identified:

  • Construction projects
    • tender phase
    • project implementation phase
  • Legal and regulatory compliance;
  • Safety, health and environment;
  • Human resources;
  • Economic projects;
  • Finance and administration;
  • Communication and information technology;
  • Procurement; and
  • Asset management
  • Cross-border construction projects and investments

The Risk Management Committee meets at least three times a year and the Board is satisfied that adequate measures and processes are currently in place to mitigate identified risks.