Corporate Governance

BOARD CHARTER

The directors are committed to conducting the business of the company with integrity and fairness and in accordance with good corporate governance practice as set out in the King III Report.

The directors have, accordingly, established mechanisms and policies which are appropriate to the business and risks of the company and that will ensure compliance with principles of responsible corporate governance and the continuous reassessment of the quality of the company’s corporate governance practices.

BOARD OF DIRECTORS

Composition of the board of directors
The board of directors consists of three executive directors and seven independent non-executive directors. The composition of the board ensures the necessary professional skills and experience needed to provide objective judgement in terms of the strategic and business direction of the company. The composition also ensures a high level of independence on the board. There is a clear division of responsibility at board level and a balance of power and authority.

All directors are subject to retirement by rotation and re-election at the general meeting of the members.

Role and function of the board of directors
The board of directors is responsible for the proper management and ultimate control of the company. In order to meet this responsibility to members and other stakeholders, the board of directors is responsible for setting the strategic objectives of the company, determining investment and performance criteria, risk management, and taking ultimate responsibility for the proper management and ethical behaviour of the businesses of the company.

The board of directors meets at least quarterly, with additional meetings convened when circumstances necessitate it.

Independence of the board of directors
The board of directors’ independence from the daily management team is maintained by ensuring that:

• the roles of the chairman and of managing director are separate;
• a majority of non-executive directors is maintained at all times;
• the audit and risk and remuneration committees consist only of non-executive directors;
• the investment committee has a majority of non-executive directors;
• the non-executive directors do not hold service contracts and their remuneration is not tied to the financial performance of Acucap; and
• all directors have access to the advice and services of the company secretary and, with prior agreement of the chairman, are entitled to seek independent professional advice on the affairs of Acucap at the company’s expense.

Nominations policy
The board of directors has established a nominations policy which formalises the process for appointments to the Acucap board, in line with the recommendations of the King Code of Corporate Practices and Conduct. This is also in line with Acucap’s commitment to following high standards of corporate governance in all its operations and management structures.

Internal financial and operating controls
The board of directors has set a framework of financial reporting, internal and operating controls to ensure reasonable assurance as to timeous reporting of business information, safeguarding of company assets, compliance with statutory law and regulation, recording of company results and general operation in terms of Acucap’s standards of business conduct. The internal audit function is outsourced.

Audit and Risk Committee
The board of directors is responsible for monitoring the ongoing effectiveness of the internal financial and operating controls and frameworks.

The audit and risk committee and external professionals review these matters regularly on behalf of the board of directors. The external auditors report to the audit and risk committee who review the external audit findings. The audit and risk committee monitors the independence of the external auditors and are of the view that the external auditors are independent of the company. The audit and risk committee nominates the appointment of external auditors to unitholders of the company. The minutes of audit and risk committee meetings are open for inspection by members of the board of directors. There is close communication between the board of directors, the audit and risk committee, and the external auditors. Areas of control weakness will be brought to the attention of all relevant parties and remedial action will be taken immediately to ensure no loss or misstatement due to the inadequacy of the internal control environment. Acucap has a small management team and a flat organisational structure, and this does not support a separate internal audit function. The audit and risk committee has assessed and noted that the financial director has the appropriate expertise and experience required for the position. The audit and risk committee pre-approves contracts for non-audit services to be rendered by the external auditor. The audit and risk committee meets at least three times per year and comprises non-executive directors, one of whom acts as chairman.

Remuneration committee
The committee comprises three independent non-executive directors. The committee assists the board to ensure that the company remunerates directors and executives fairly and responsibly.

Communications with stakeholders and linked unit holders
Acucap is committed to a policy of timeous and effective communication with linked unitholders and other stakeholders through members’ meetings, the annual financial report and interim financial report and presentations to institutional investors and industry analysts. Matters of both a financial and a non-financial nature are communicated to stakeholders and linked unitholders in a timeous and transparent fashion.

Share dealings by directors
All dealings by directors are regulated and monitored as required by the listing requirements of the JSE Limited. Acucap operates a closed period from 1 October to the date of publication of its interim results and from 1 April to the date of publication of its final result. Details of directors’ shareholdings are set out on page 95 of this annual report.

REPORT FOR THE YEAR ENDED 31 MARCH 2011

Directors’ remuneration
Details of directors’ remuneration are set out on page 96 of this annual report. No non-executive directors hold service contracts.

Directors’ attendance at company’s meetings
Details of directors’ attendance at the company’s meetings, including sub-committee meetings, held during the year are set out below: