Corporate Governance

Corporate Governance statement for GK African Trading Company Limited

2018 CORPORATE GOVERNANCE STATEMENT

  1. INTRODUCTION

This Statement sets out the key corporate governance principles adopted by the Directors in governing GK African Trading Company Limited (“GKATC”) and reflects the corporate governance policies and procedures which applied during the financial period ending 31 December 2015. We continue to review and enhance our corporate governance policies and procedures.

  1. GKATC’S APPROACH TO CORPORATE GOVERNANCE

Corporate governance is the framework of rules, systems, processes and relationships by which the company’s business is conducted, directed and controlled. The Board has the responsibility for ensuring GKATC is properly managed so as to protect and enhance shareholders’ interests in a manner that is consistent with the company’s responsibility to meet its obligations to all stakeholders. For this reason, the Board is committed to applying appropriate standards of corporate governance across the organisation.

  1. GOVERNANCE PRINCIPLE 1: Lay Solid Foundations for Management & Oversight

4.1 The Role of the Board
The company’s Constitution vests management and control of the business and the company’s affairs in the Board. During the year the Board considered the functions reserved for the Board. In summary the Board’s accountabilities and responsibilities include:

  • Providing a leadership role to the company
  • Representing shareholders and effectively translating the market’s needs and aspirations into future direction.
  • Balancing the diversity of market views to develop an overall future strategy
  • Providing overall stewardship of the organisation and ensuring that sound financial management and accountability are achieved in relation to market finances.
  • Reviewing and approving policies, goals, targets and budgets
  • Monitoring business performance and ensuring that appropriate mechanisms are in place to deal with the prompt handling of concerns.
  • Improving shareholder value and working with others to achieve benefits for shareholders.
  • Having an awareness of the statutory obligations imposed on Board members and ensuring there are appropriate standards of corporate governance.
  1. i) Practicing and exhibiting the company’s values (which include a customer focus, shareholder value, communication & co-operation, compliance with the code of conduct and internal controls, encouraging leadership & innovation, management by fact, providing a safe & healthy workplace and teamwork)

Responsibility for day to day management and administration of the company is delegated by the Board to the CEO.

4.2 Board Committees
To assist it in carrying out its responsibilities the Board has in place several committees and special groups including the:

  • Audit and Governance Committee
  • Remuneration Committee
  • Finance Committee
  • Constitution Committee
  • Master Planning Sub Committee
  • Operations and Leasing Committee

All of these bodies have written charters and their purpose is to make recommendations to the Board. Copies of committee minutes are circulated to all Board members and each committee chairman reports findings together with any recommendations to the full Board at its next meeting.

4.3 The Role of the CEO
Khamis Rashid was appointed CEO of the company in 2015. Directors have determined that the Board should be independent of management. Accordingly the CEO is not a member of the Board. The CEO is reports to the Chairman of the Board and is accountable to the Board for the following functions:

  1. Leadership and management of the organisation
  2. Provision of strategic input to the Board’s planning process
  3. The implementation of the corporate, business and strategic plans
  4. Financial management of the company
  5. Policy development
  6. Business development
  7. Project management
  8. Overseeing market operations and provision of services to stakeholders
  9. Developing and maintaining market rules

4.4 Evaluating the CEO
The CEO’s performance is evaluated annually by the Remuneration Committee against a range of key performance indicators and targets. The Committee makes a recommendation to the Board on the CEO’s remuneration which is based on both performance and external market data. The CEO’s has a current position description and a letter of appointment which describes his term of office, duties, rights and responsibilities and entitlements on termination.

  1. GOVERNANCE PRINCIPLE 2: STRUCTURE THE BOARD TO ADD VALUE

5.1 Board Expertise, Size and Composition
The Board has a broad range of relevant skills, experience and expertise to meet its objectives. It is comprised wholly of non executive directors and has an independent chairman. The Board’s structure is determined by GKATC’s Constitution. While the Constitution allows for executive directors to be appointed, the Board has determined that a Board comprised solely of non executive directors provides for the most robust corporate governance approach. The CEO attends all Board and Committee meetings. Details of each Director’s qualifications, experience and special responsibilities are set out in each years Annual Report.

5.2 Nomination and Appointment of New Directors
Directors are appointed for a three year term. The Board as a whole undertakes the functions of a Nomination Committee including succession planning and the appointment and re-election of Directors. It assesses the eligibility of all nominations and also identifies people with relevant skills and expertise for nomination as independent directors. All new Directors are provided with an induction kit containing a range of relevant information.

5.3 Retirement
The Board is conscious of the benefits of board renewal. Five new Directors have joined the Board in the last two years. GKATC’s Constitution specifies that all Directors must retire from office no later than the third Annual General Meeting following their last election. Where eligible a Director may stand for re-election. In the event a Director ceases being an eligible person in accordance with the Constitution they must retire from the Board.

5.4 Board Access to Records and Advice
All Directors receive regular detailed financial and operational reports from management as part of their meeting materials to assist them carry out their duties. In addition Directors are provided with unrestricted access to company records during business hours. Directors are permitted to take copies provided the access assists them discharge their duties as a Director. Any request from a Director for independent professional advice is considered by the whole Board on a case by case basis.

5.5 Director Independence and Avoidance of Conflicts
The Board is comprised solely of non executive directors. None of the directors have been employees of the company. None of the Directors have provided material professional services to the company within the last three years nor are any material suppliers or customers of GKATC or its operations. While our representative (or nominee) Directors are encouraged to bring the issues of their constituency to the Board for discussion they are aware that they have an obligation to make decisions in the best interests in the company as a whole. In addition they are also aware that their duty of confidentiality to the company over-rides any implied obligation to report matters of company interest to their appointers. In accordance with the Corporations Act, any Director with a material personal interest in a matter being considered by the Board must not be present when the matter is being considered and may not vote on the matter. Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of GKATC. Where a significant conflict exists, the Director concerned declares their interests in the matter to the Board and takes no part in decisions or discussions relating to them.

5.6 Chairman
Godlove Kingu is the Chairman and was appointed in 2015. The Chairman is selected by the Board and is appointed for a one year term. The Chairman’s role includes:

  1. Providing leadership to the Board
  2. Managing the Board in the discharge of its duties
  3. Chairing shareholders meetings (including determining the general conduct and procedures to be adopted at meetings)
  4. Being the primary point of contact with the Board and the CEO
  5. Responding to media enquiries on behalf of the Board

The Chairman is also an ex-officio member of all Board Committees and task forces.

5.7 Board Meetings
The Board meets in full each month. In addition to the 12 scheduled Board meetings, meetings are also held throughout the year to address strategy, Board performance and other specific matters which arise. The CEO attends all Board meetings and the other managers present on relevant matters as required. Information on Director meeting attendance is included in the Directors’ Report shown in each years Annual Report.

5.8 Review of Board Performance
As part of its commitment to continuous improvement the GKATC Board initiated a board performance review during the year. The review format was developed by an external facilitator in conjunction with the Board. The structured review involved the completion of a confidential questionnaire by each Board member and the CEO followed by an opportunity for a confidential individual interview with the Chairman. The review considered the

  • role of the Board;
  • the effectiveness with which it meets its requirements;
  • the way it operates, interacts and makes decisions;
  • its meeting and other administrative arrangements;
  • Board Committees; and
  • progress in meeting its business plan objectives.

Following the collation and analysis of the questionnaire results by the external facilitator, a formal committed period of time outside of a normal Board meeting was set aside to review and discuss the results as a Board. The review identified areas working well as well as areas for greater focus. An action plan is in the process of being implemented. The Board expects to continue to conduct a regular performance assessment.

5.9 Company Secretary
All Directors have access to the Company Secretary. The appointment and removal of the Company Secretary is a matter for decision by the Board as a whole.

  1. GOVERNANCE PRINCIPLE 3: PROMOTE ETHICAL AND RESPONSIBLE DECISION MAKING

6.1 Code of Conduct
The Board acknowledges its responsibility to set the ethical tone and standards of the company. Accordingly it has clarified the standards of ethical and professional behaviour required of Directors and employees through the establishment of a Code of Conduct. A copy of the Code can be found on the company’s website.

6.2 Trading in Company Securities
As an unlisted public company, GKATC’s securities are not traded on any share trading exchange system. Information on the procedure for buying and selling company shares is provided on the company’s website. Although the shares are unlisted and all transactions are subject to Board approval before they are executed, the Board believes it is prudent for the company to have a share trading policy for employees and Directors. A summary of the policy can be found on the company’s web site.

  1. GOVERNANCE PRINCIPLE 4: Independently Verify and Safeguard Integrity in Financial Reporting

7.1 Audit and Corporate Governance Committee
The company has an audit committee comprised of four non executive directors. It is chaired by the Deputy Chairman of the Board. The Chairman of the Board sits on the Committee in an ex-officio capacity. The CEO and the Finance Manager attend the meetings at the invitation of the Committee. The Committee has a written charter and meets at least twice a year for the release of audited statements. Its primary functions include:

  • To recommend the external auditor’s appointment / removal and reviewing their scope of work and performance;
  • Assist the Board oversee the risk management framework;
  • Review, in consultation with the external auditor, internal and external audit management letters to monitor management’s remedies to address deficiencies;
  • Review the company’s financial results;
  • Report to the Board on the adherence to internal accounting policies ;
  • Review corporate governance policies and any legal and regulatory compliance issues.

7.2 External Auditor
Our current Auditors will be invited to tender for Audit services in the future.

  1. GOVERNANCE PRINCIPLE 5: make timely and balanced disclosure of all material matters

The Board aims to keep shareholders informed about the company’s state of affairs and progress through the distribution of the Annual Report. The company also sends all shareholders the half year interim and full year results reports together with a brief commentary. Any major developments or significant matters are communicated to shareholders as they arise on a timely basis. Shareholders and stakeholders can elect to receive the market publication “Burst of Freshness” which provides them with information on a range of market related activities.

  1. GOVERNANCE PRINCIPLE 6: RESPECT THE RIGHTS OF SHAREHOLDERS

The Annual General Meeting (AGM) is the central forum by which companies can communicate with shareholders face to face. In addition the AGM also enables shareholders to participate in decision making.

  1. GOVERNANCE PRINCIPLE 7: RECOGNIZE AND MANAGE RISK

10.1 Policies for the Oversight and Management of Risk
The Board acknowledges that risk management is a core component of director and executive duties and an essential element of good governance. The company utilities accounting controls and reconciliations, segregation of duties, documented policies and procedures, regular management reporting, annual budgeting as well as physical security over company assets as part of its internal control environment. Due to the small number of employees, the company does not have a dedicated internal audit function. The review of internal controls is undertaken by the external auditor. In addition the Audit and Governance Committee expanded its terms of reference to include risk. The Committee assists the Board oversee the risk management framework, including the determination of the scope and the maintenance of internal control procedures.

10.2 Material Business Risks
Material business risks are those with significant areas of uncertainty that could have an impact on company objectives. GKATC’s property insurance underwriters undertake regular risk reviews of the company’s market operations. The Board recognizes that modern organizations face a variety of risks including strategic, reputation, compliance, and technological, environmental, financial as well as operational risks. It is anticipated that a wide ranging risk review will be undertaken in the future to provide the Board with a current assessment of the major risks facing the company.

10.3 Declaration by CEO and Finance Manager
During the year the company put in place procedures for the CEO and the Finance Manager to provide assurances that the financial statements are founded on a sound system of risk management and internal control and that the system is operating effectively in all material aspects in relation to reporting financial risks.

  1. GOVERNANCE PRINCIPLE 8: REMUNERATE FAIRLY & RESPONSIBLY

11.1 Remuneration Committee
The Board has a Remuneration Committee comprised of three non executive Directors. It is chaired by the Chairman of the Board. Specific information about their meeting attendance can be found in the Directors’ Report in the Annual Report.

11.2 CEO Remuneration
All aspects of the CEO’s remuneration package is fully documented and contained within an up to date employment contract. There is no equity component in the package and the company does not have an executive or employee share plan. Details of the CEO’s package can be found in the Remuneration Report in each years Annual Report.

11.3 Board Remuneration
The non executive Board members of GKATC are remunerated solely by way of fees. The non executive Directors do not receive any additional fees for Committee work nor are they provided with retirement benefits other than the compulsory 9% Superannuation Guarantee Levy contribution. Non executive Directors may be reimbursed travel and sustenance expenses arising from Board related or company business.