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Texton Property Fund Limited - 2005/019302/06 |
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Applied / Partially Applied / Not Applied |
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Principle 1.1: The Board provides effective leadership based on ethical foundation |
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Practice: |
The board sets the values to which the company will adhere to and these are formulated in the company's code of conduct. |
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The Board sets the company's values which are documented in the company's code of business conduct. |
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Practice: |
The board ensures that the board's and management's conduct sets an example in that it aligns to the company values. |
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The Company's values as outlined in the code of business conduct are embedded throughout the organisation and have been endorsed by the board and management. Key performance indicators are similarly aligned with living the values of the company. |
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Practice: |
The board promotes the stakeholder-inclusive approach of governance and takes account of the impact of the company's operations on internal and external stakeholders. |
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The board promotes the stakeholder-inclusive approach of governance and takes account of the impact of the company's operations on internal and external stakeholders. |
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Practice: |
All deliberations, decisions and actions of board are based on fairness, accountability, responsibility, transparency. |
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The board believe that excellent corporate governance is a tool to create and preserve value for the group and its stakeholders and are committed to the values of good corporate governance as contained in King III. The board endorses and accepts the responsibility for achieving the four values underpinning good governance advocated by King III, namely: fairness, responsibility, transparency and accountability. The board and its committees regularly review our governance structures and processes to ensure that the board exercises effective and ethical leadership, conducts its affairs as a good corporate citizen and takes decisions to ensure sustainability. Texton is committed to achieving high standards of business integrity and ethics. |
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Practice: |
Directors in performing their stewardship role exercise the following five moral duties: conscience, care, competence, commitment, courage. |
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Directors moral duties are outlined in the Board Charter and the company's code of business conduct which includes the group's values. |
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Principle 1.2: The Board ensures that the company is and is seen to be a responsible corporate citizen |
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Practice: |
The board ensures that the company performance and interaction with its stakeholders is guided by the Constitution and the Bill of Rights. |
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The board ensures that the company's performance and its interaction with its stakeholders are guided by the Constitution and the Bill of Rights. |
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Practice: |
Evaluating and managing the risks of doing business in weak governance zones forms an important component of risk management. |
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Risks specific to Texton's business are addressed at EXCO meetings (monthly) and Audit and Risk Committee meetings (quarterly). |
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Practice: |
The board ensures that collaborative efforts with stakeholders are embarked upon to promote ethical conduct and good corporate citizenship. |
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The Board has identified Texton's stakeholders, and their respective expectations in interacting with the company. |
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Practice: |
The board ensures that measurable corporate citizenship programmes and policies are developed and implemented. |
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CSI projects are reviewed by the social and ethics committee on a quarterly basis and feedback is provided to the board accordingly. The board reviews and approves CSI policies on an annual basis. |
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Practice: |
The board satisfies itself that the strategy and business plans are not encumbered by risks that have not been thoroughly examined by management. |
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The board satisfies itself that management has thoroughly examined and dealt with all risks affecting strategy and business plans. |
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Practice: |
The board considers not only financial performance, but also the impact of the company's operations on society and the environment. |
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The board gives adequate consideration to the impact of the company's operations on society and the environment. |
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Practice: |
The board protects, enhances and invests in the wellbeing of the economy, society and the environment. |
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The Social and Ethics Committee is responsible for identifying and contributing to Texton's CSI initiatives. |
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Principle 1.3: The Board ensures that the company ethics are managed effectively |
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Practice: |
The board ensures that ethical risks and opportunities are incorporated in the risk management process or ethics programme; i.e. and ethics risk and opportunity profile is compiled. |
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The social and ethics committee monitors the company’s ethics and endeavour to ensure that such ethics pervade the culture of the company. |
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Practice: |
The board ensures that the company's ethics performance is assessed, monitored, reported and disclosed. |
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Texton's Code of Ethics seeks to ensure compliance with relevant legislation and regulations. |
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Practice: |
The board has ensured that a code of conduct and ethics-related policies, through which ethical standards are clearly articulated, have been established and implemented. |
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A code of business conduct and various ethics related policies have been established and implemented across the company. Same clearly set out and articulate the company's ethical standards. |
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Practice: |
The board ensures compliance with the code of conduct is integrated into the strategy and operations of the company; i.e. the ethical organisational culture is reflected in the company's vision and mission; strategies and operations; its decisions and conduct; and the manner in which it treats its internal and external stakeholders. |
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The strategy is aligned to the values of the company and every employee is expected to subscribe to the code of business conduct which requires all to act with honesty and integrity in all dealings with all stakeholders. |
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Principle 2.2: The Board appreciates that the strategy, risk, performance and sustainability are inseparable |
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Practice: |
The board informs and approves strategy (as opposed to being a passive recipient of strategy as proposed by management). |
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The board meets annually with management to debate and agree on the proposed strategy for the forthcoming financial year and to consider economic and industry related issues facing the company. |
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Practice: |
Board takes steps to ensure that long-term planning will result in sustainable outcomes taking account of people, planet, profit. |
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Texton's board of directors is committed to maintaining the corporate governance standards recommended in King III and continues to enhance and align policies, systems and procedures that embed sound corporate governance principles and ethical standards throughout the business. These principles and standards guide directors and management with regards to the delivery of sustainable growth for the benefit of all stakeholders. |
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Practice: |
The board ensures that the strategy is aligned with the purpose of the company, the value drivers of its business and the legitimate interests and expectations of its stakeholders. |
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Texton's strategy addresses the company's focus areas and value drivers. Same is aligned with the purpose of the company and the interests and expectations of its stakeholders. |
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Practice: |
Strategy is translated into key performance and risk areas (including finance, ethics, compliance and sustainability); and the associated performance and risk measures are identified and clear. |
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Practice: |
The board considers sustainability a business opportunity; i.e. long-term sustainability is linked to strategy and guides strategy. |
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The board views sustainability as a business opportunity; i.e. long-term sustainability is considered when strategy is formulated and it guides strategy-setting. |
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Principle 2.14: The Board and its directors act in the best interests of the company |
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Practice: |
Directors are permitted to take independent advice in connection with their duties at company cost following a board approved procedure. |
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Directors are permitted to take independent advice related to their duties. The company will pay for such advice if the board approved procedure has been followed. No board member felt it necessary to take independent advice during the year. |
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Practice: |
Real or perceived conflicts of interest are disclosed to the board and managed appropriately. |
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Directors are required to disclose their personal financial interests and/or those of their related parties in terms of Section 75(4) of the Companies Act. The company secretary maintains a register of these interests which is tabled to the board periodically and any changes are submitted to the board as they occur. In addition, and if a director has a potential conflict in respect of a matter to be considered at a meeting of the board, the director is obliged to disclose the interest and its general nature, recuse himself/herself from the meeting and not take part in the consideration of the matter. |
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Practice: |
The board has unrestricted access to all company information, records, documents and property subject to following a board approved process. |
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Practice: |
The company has a policy regarding dealing in securities by directors, officers and selected employees. (Only applicable if listed company.) |
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The company has a policy on dealing in securities by directors, officers and selected employees. |
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Principle 2.16: The Board has elected a chairman of the board who is an independent non executive director. The CEO of the company does not also fulfil the role of chairman of the Board. |
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Practice: |
The chairperson is an independent non-executive director. |
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As the Chairperson does not meet the criteria for independence, a Leas independent director has been appointed.
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Practice: |
The chairperson is not a former CEO. |
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The Chairman has not been the CEO of the company, however he is not considered to be Independent. |
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Practice: |
The chairperson is elected by board members every year. |
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In terms of the MOI every non-executive director stands for re-election every three years. This does not apply to executives. |
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Practice: |
The chairman ability to add value, and his performance against what is expected of his role and function is assessed every year. |
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The Fund is in the process of formalising the criteria. |
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Practice: |
The chairperson of the board is not the chairperson of the remuneration committee. |
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The chairman of the board is a member of the remuneration committee, but is not the chairman of the remuneration committee. The chairman of the remuneration committee is an independent non-executive. |
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Practice: |
The nominations committee oversees a formal succession plan for the board, CEO and certain senior executive appointments. |
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The nominations committee in consultation with the external Manco oversees a formal succession plan for the board, CEO and certain senior executive appointments |
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Practice: |
A formal role description exists for the chairperson. |
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A clear written role description will be formulated for the Chairman. |
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Practice: |
It is disclosed whether the chairperson is an independent non-executive director and if not, the reason for it. |
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The company's chairman is non-independent and thus the company appointed an independent non-executive director as the lead independent director. This lead independent director has resigned effecting 25 August 2016 and consideration is being given to the appointment of a replacement lead independent director. |
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Practice: |
There is succession planning in place for the chairperson. |
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The Fund is in the process of formalising the succession plan for the Chairman. |
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Principle 2.17: The Board has appointed the Chief Executive Officer and has established a framework for the delegation of authority |
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Practice: |
There is a benchmark; i.e. performance measures, in place to evaluate the performance of the CEO. |
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Practice: |
The board appoints the CEO. |
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Practice: |
The board has input in other senior executive appointments. |
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The Fund does not have employees as they are employed by the external Manco, however the board contributes to all decisions about senior executives. |
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Practice: |
The board defines its own level of materiality and approves a delegation of authority framework. |
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There is a formal delegation of authority in place with limits set for each action item. |
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Practice: |
The role and function of the CEO is formalised. |
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Practice: |
The CEO is not a member of the remuneration committee. |
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The CEO is an acting CEO and is a member of the remuneration committee considering Texton has an external Manco. |
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Practice: |
The CEO is not a member of the audit committee. |
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Practice: |
The CEO is not a member of the nomination committee. |
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The CEO is an acting CEO and serves as a member of the remuneration and nomination committee as Texton has an external Manco. |
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Practice: |
There is a formal succession plan in place for the CEO and other senior executives. |
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The board has a succession plan for the CEO and other senior executives. |
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Principle 2.18: The Board comprises a balance of power, with a majority of non executive directors. The majority of non executive directors are independent. |
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Practice: |
The nominations committee recommends eligibility of prospective directors on the basis of past performance, contribution and the objectivity of business judgement calls. |
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Practice: |
The classification of directors as independent or otherwise is disclosed on the basis of the yearly assessment of the independence of the independent non-executive directors. |
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Practice: |
There is reporting on the procedure and outcome of the assessment of the suitability of non-executive independent directors to continue on the board as such, for a period longer than nine years. |
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There are no non-executive directors that have been serving for nine years or longer. |
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Practice: |
The board comprises a majority of non-executive directors. |
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At 30 June 2016 there were 10 NED's and 3 Executive directors. Of the 10 NED's, 5 were independent. |
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Practice: |
A majority of non-executive directors are independent. |
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Currently there are 10 NED's. Of these 5 are independent and 5 are not independent. The Board is committed to addressing this issue in the short-term. |
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Practice: |
The board has a minimum of two executive directors - the CEO and the director responsible for finance. |
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Practice: |
When determining the number of directors to serve on the board, the knowledge, skills and resources required as appropriate to the business of the company is considered. |
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Practice: |
The board has considered whether its size, diversity and demographics make it effective. |
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Practice: |
At least one third of non-executive directors rotates every year. |
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Practice: |
Independent non-executive directors serving for longer than 9 years are subjected to a rigorous review of their independence and performance by the board. |
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No Independent non-executive director has served for more than 9 years. |
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Practice: |
The board, through the nomination committee, recommends eligibility for re-election of retiring non-executive directors, while considering past performance, contribution and the objectivity of business judgement calls. |
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Practice: |
Non-executive directors that are classified as 'independent' by the company is subjected to an annual evaluation of their independence by the chairperson and the board.††††† |
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Principle 2.19: Directors are appointed through a formal process |
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Practice: |
Details of directors' appointment procedure and composition of board are provided in the integrated report. |
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Practice: |
The board makes full disclosure regarding individual directors to enable shareholders to make their own assessment of directors. |
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Practice: |
Reasons for the removal, resignation or retirement of directors are provided. |
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Practice: |
Prior to their appointment, procedures are in place to investigate the candidates' backgrounds along the lines of the approach required for listed companies by the JSE . |
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Practice: |
The nominations committee identifies and participates in selecting board members. |
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Practice: |
The nominations committee ensures that new directors have not been declared delinquent nor are serving probation in terms of section 162 of the Act. |
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Practice: |
Procedures for appointments to the board are formal and transparent and are a matter for the board as a whole, assisted by the nomination committee. |
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Practice: |
The number of meetings held each year by the board and each board committee and the details of attendance of each director(as applicable) at such meetings are disclosed. |
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Practice: |
An agreement is concluded with all non-executive directors that includes the directors' code of conduct to be complied with, the contribution that is expected from the specific individual, the remuneration for holding office as director and the terms of directors' and officers' liability insurance to be provided. |
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Principle 2.21: The Board is assisted by a competent, suitably qualified and experienced company secretary. |
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Practice: |
The nominations committee establishes procedures for appointments to the board and ensures that these are properly carried out. |
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Practice: |
The company secretary is empowered by the board to effectively perform his duties. |
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Practice: |
The company secretary is appointed and removed by board. |
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Practice: |
The company complies with the provisions of the Companies Act, 2008 in relation to the appointment and removal of the company secretary. |
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Practice: |
The role and function of the company secretary is formalised. |
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Principle 2.22: The evaluation of the Board, its committees and individual directors is performed every year. |
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Practice: |
The remuneration committee considers the results of the evaluation of the performance of the CEO and other executive directors, both as a directors and as executives in determining remuneration. |
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The remuneration committee does consider the results of the evaluation of their performance, both as a directors and as executives whilst determining their remuneration. |
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Practice: |
The board determines it's own role, functions, duties and performance criteria as well as that for directors on the board and the board and board committees to serve as a benchmark for performance appraisal. |
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Assessments of the functioning of every committee as well as its individual members are scheduled for the new financial year as approved by the Remuneration and Nominations committee. |
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Practice: |
An overview of the appraisal process of the board, board committees, individual directors, the results thereof and action plans are disclosed in the integrated report. |
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Appraisal are to be undertaken in the new financial year as agreed by the Remuneration and Nominations committee. |
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Practice: |
The results of performance evaluation are used to identify training needs for directors. |
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To be established when the performance evaluations are undertaken. |
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Practice: |
The nomination for re-appointment of a director only occurs after the evaluation of the performance and attendance of the director. |
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To be established when the performance evaluations are undertaken. |
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Principle 2.23: The Board delegates certain functions to well-structured committees without abdicating from its own responsibilities. |
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Practice: |
The risk committee's terms of reference are approved by the board. |
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The updated risk committees' terms of reference are currently being considered by the Board. |
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Practice: |
The risk committee is chaired by a non-executive director. |
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Practice: |
The risk committee's terms of reference deal with: composition; objectives, purpose and activities; delegated authorities - including the extent of power to make decisions; tenure; and reporting mechanism to the board. |
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Practice: |
The risk committee is entitled to obtain independent professional advice at cost of the company on any issue within the ambit of its scope and subject to following a board approved process. |
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Practice: |
There is a board remuneration committee. |
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Practice: |
The remuneration committee's terms of reference deal with: composition; objectives, purpose and activities; delegated authorities - including the extent of power to make decisions; tenure; and reporting mechanism to the board. |
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Practice: |
The remuneration committee is entitled to obtain independent professional advice at cost of the company on any issue within the ambit of its scope and subject to following a board approved process. |
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Practice: |
All members of the remuneration committee are non-executive directors. |
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The acting CEO is a member of the remuneration committee as Texton has an external Manco. The committee has a majority of independent non-executives. |
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Practice: |
The remuneration committee is chaired by an independent director. |
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The remuneration committee is chaired by an independent director |
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Practice: |
The nominations committee's terms of reference are approved by the board. |
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The updated NomCo's terms of reference (included in RemCo's) are currently being considered by the Board. |
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Practice: |
The nominations committee's terms of reference deals with: composition; objectives, purpose and activities; delegated authorities - including the extent of power to make decisions; tenure; and reporting mechanism to the board. |
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Practice: |
The majority of members of the nominations committee are independent. |
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Practice: |
The nomination committee is entitled to obtain independent professional advice at cost of the company on any issue within the ambit of its scope and subject to following a board approved process. |
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Practice: |
There is a nomination committee. |
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The nomination committee forms part of the remuneration committee. |
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Practice: |
The audit committee terms of reference deal with: composition; objectives, purpose and activities; delegated authorities - including the extent of power to make decisions; tenure; and reporting mechanism to the board. |
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Practice: |
The audit committee is entitled to obtain independent professional advice at cost of the company on any issue within the ambit of its scope and subject to following a board approved process. |
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The audit committee is entitled to obtain independent professional advice on any issue within its scope and the company will pay for such advice if the board approved procedure has been followed. |
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Practice: |
The composition and role of each board committee are disclosed. |
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Practice: |
The names and details of any external advisers who regularly attend or are invited to attend committee meetings are disclosed. |
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Principle 2.24: A governance framework has been agreed upon between the group and its subsidiary Boards |
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Practice: |
There is a governance framework between the group and its subsidiary boards. |
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Texton only has 100% shareholdings in its subsidiaries, except for Broad Street Mall which is a 50% joint venture. There are no Boards for these subsidiaries as the Board of Texton exercises oversight over the Group as well as all its subsidiaries. These governance structures are considered satisfactory. |
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Practice: |
There are formal policies and practices in place to ensure equal treatment of shareholders within the group. |
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Practice: |
Insider Trading is dealt with in terms of relevant stock exchange rules. |
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Practice: |
Implementation and adoption of policies, processes or procedures of the holding company are considered and approved by the subsidiary company. |
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Practice: |
The holding company respects the fiduciary duty of the director who represents the holding company on the board of the subsidiary to that subsidiary. |
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Practice: |
Consultation takes place by the holding company board with the chairperson of the subsidiary board and nomination committee prior to nominating a shareholder representative director. |
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Practice: |
The integrated report provides details of the implementation and adoption of policies, processes or procedures of the holding company by subsidiary company(ies). |
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Principle 2.25: The company remunerates its directors and executives fairly. |
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Practice: |
The remuneration committee's terms of reference are approved by the board. |
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The updated RemCo's terms of reference are currently being considered by the Board |
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Practice: |
The remuneration committee assists the board in setting and administering remuneration. |
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Only applicable to non-executive directors. |
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Practice: |
The remuneration committee ensures that the mix of fixed and variable pay, in cash, shares and other elements, meets the company's needs and strategic objectives. |
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Practice: |
The remuneration committee satisfies itself as to the accuracy of recorded performance measures that govern vesting of incentives. |
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Practice: |
The remuneration committee ensures that all benefits, including retirement benefits and other financial arrangements are justified and correctly valued. |
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Not applicable. |
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Practice: |
The remuneration committee selects an appropriate comparative group when comparing remuneration levels. |
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Practice: |
The remuneration committee ensures that remuneration levels reflect the contribution of senior executives and executive directors. |
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Executive directors are remunerated by the external asset management company, which is independent from the Fund. |
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Practice: |
The remuneration committee regularly reviews incentive schemes to ensure continued contribution to shareholder value. |
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Practice: |
The remuneration committee considers the appropriateness of early vesting of share-based schemes at the end of employment. |
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Practice: |
The remuneration committee advises on the remuneration of non-executive directors. |
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Practice: |
There exists remuneration policies and practices that address base pay and bonuses, employee contracts, severance and retirement benefits and share-based and other long-term incentive schemes. |
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Texton does not have employees. All employees are employed by the external management company, Texton Property Investment (Pty) Ltd. The remuneration of non-executive directors are discussed and agreed at the Remuneration committee and approved by the shareholders at the AGM. |
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Practice: |
Remuneration policies and practices are aligned with company strategy. |
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Texton does not have employees as it has an external management company that employs all staff. RemCo does have oversight of the CEO's package. |
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Practice: |
Incentives are based on targets, both financial and sustainability related, that are stretching, verifiable and relevant. |
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Practice: |
Multiple performance measures are used to avoid manipulation of results or poor business decisions. |
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Practice: |
Remuneration levels reflect the contribution of senior executives. |
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Practice: |
If incentives are given for both long-term and short-term goals, the performance drivers are not duplicated and a balance is struck with the need to reward success over the longer term. |
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Practice: |
Employment contracts do not commit the company to pay on termination arising from an executive's failure. |
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Practice: |
There is no automatic entitlement to bonus or share-based payments on early termination of employment. |
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Practice: |
There is no provision in employment contracts for severance as result of change in control of company. |
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Practice: |
Participation in incentive schemes is limited to employees and executive directors and provides appropriate limits for individual participation. |
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Practice: |
High leveraging of incentive schemes is avoided. |
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The share incentive scheme is funded 100% by bank debt |
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Practice: |
Share incentive awards and options are granted regularly and consistently, generally once a year. |
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Awards of share-based incentives and options are awarded twice a year, in February and August. |
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Practice: |
No awards of share options and incentives are allowed in closed periods. |
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Awards of share-based incentives and options are granted twice a year, in February and August once the company is out of its closed period. |
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Practice: |
No backdating of awards of share options and incentives is allowed. |
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Practice: |
Awards of share options and incentives are subject to a vesting period from 3 to 10 years. |
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Practice: |
The value of awards of share options and incentives are not significant in comparison to base pay. |
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As the shares are funded 100% by bank debt, the net value of the award is not significant compared to base pay. |
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Practice: |
The share-based and long-term incentive schemes have special conditions in place for change of control, roll-over for capital reconstruction, early termination of employment or dismissal for good cause. |
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In the event of a takeover or merger the release date is advanced subject to certain conditions being met. |
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Practice: |
Non-executive fees comprise a base fee and attendance fee per meeting. |
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The fees are calculated as an all in fee. |
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Practice: |
Non-executive fees are approved by shareholders in advance by special resolution. |
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Practice: |
The company has established share-based and/or long-term incentive schemes. |
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The company implemented a share incentive scheme in 2015. |
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Practice: |
The remuneration report includes details of retention benefits paid. |
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Practice: |
The remuneration report includes details of limits for participation in incentive schemes. |
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Practice: |
Performance measures for vesting of share options and the reasons for choosing them are disclosed in the remuneration report. |
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Practice: |
The remuneration report includes details of main performance parameters. |
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The Fund does not have employees and therefore do not include a full remuneration report. The Fund has an external asset manager which employs the staff. Executive and non-executive director remuneration is disclosed in the integrated report. |
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Principle 2.26: The company has disclosed the remuneration of each individual director and prescribed officer. |
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Practice: |
The remuneration report is included in the integrated report. |
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The Fund does not have employees and therefore do not include a full remuneration report. The Fund has an external asset manager which employs the staff. Executive and non-executive director remuneration is disclosed in the integrated report. |
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Practice: |
The nature and period of restraint provided for in executive service contracts are disclosed in the remuneration report. |
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The Fund does not have employees and therefore do not include a full remuneration report. The Fund has an external asset manager which employs the staff. Executive and non-executive director remuneration is disclosed in the integrated report. |
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Practice: |
The maximum and the expected potential dilution as a result of incentive awards are disclosed in the remuneration report. |
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Practice: |
Details of the non-executive directors' fees, including those fees payable for serving on a board committee are disclosed in the remuneration report. |
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Practice: |
The remuneration report includes details of all benefits paid and awarded to directors. |
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Practice: |
The remuneration report includes an overview of the policy on base pay. |
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The Fund does not have employees and therefore do not include a full remuneration report. The Fund has an external asset manager which employs the staff. Executive and non-executive director remuneration is disclosed in the integrated report. |
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Practice: |
The remuneration report includes details re the use of comparative benchmarks. |
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The Fund does not have employees and therefore do not include a full remuneration report. The Fund has an external asset manager which employs the staff. Executive and non-executive director remuneration is disclosed in the integrated report. |
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Practice: |
The remuneration report includes justification of salaries paid above median. |
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Practice: |
The remuneration report includes details of material payments that are ex-gratia in nature. |
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Practice: |
The remuneration report includes the term of executive service contracts as well as the notice period for termination. |
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The Fund does not have employees and therefore do not include a full remuneration report. The Fund has an external asset manager which employs the staff. Executive and non-executive director remuneration is disclosed in the integrated report. |
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Principle 3.1: The Board has ensured that the company has an effective and independent audit committee |
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Practice: |
The audit committee meets at least twice a year. |
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The audit committee meets at least quarterly. |
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Practice: |
The audit committee meets with the external and internal auditors without management being present at least once a year. |
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Practice: |
There is an audit committee |
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Practice: |
The nominations committee presents shareholders with suitable candidates for election as audit committee members. |
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Audit Committee members are elected/re-elected on an annual basis. |
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Practice: |
The audit committee's terms of reference are approved by the board. |
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Principle 3.2: Audit committee members are suitably skilled and experienced independent non-executive directors |
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Practice: |
The nominations committee evaluates whether audit committee members collectively have basic level of qualification and experience. |
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Practice: |
The audit committee includes in the integrated report both the following: - a statement on whether or not it considered and recommended the internal audit charter for approval by the board; and - a description of its working relationship with the Chief Audit Executive. |
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A new Internal audit function will be implemented in the forthcoming financial year. |
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Practice: |
The shareholders elect the audit committee members at the AGM. |
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Practice: |
The audit committee consists of at least three members. |
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Practice: |
All members of the audit committee are independent non-executive directors. |
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Practice: |
Audit committee members collectively have knowledge and experience on financial risks, financial and sustainability reporting, and internal controls. |
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Practice: |
Audit committee members collectively have knowledge and experience on corporate law. |
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Practice: |
Audit committee members collectively have a thorough understanding of the complexities of International Financial Reporting Standards, South African Statements of Generally Accepted Accounting Practice, Global Reporting Initiative standards or any other financial reporting framework and set of standards applicable. |
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Practice: |
The board fills vacancies on the audit committee that arise until the next AGM when the formal election is done by shareholders . |
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Practice: |
The integrated report includes information regarding any other roles assigned to the audit committee by the board. |
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Practice: |
The role of the audit committee is summarised in the integrated report. |
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Practice: |
It is disclosed whether the audit committee has adopted formal terms of reference. |
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Practice: |
It is disclosed in the integrated report whether the audit committee has satisfied its responsibilities for the year in compliance with the formal terms of reference. |
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Practice: |
The names and qualifications of all members of the audit committee during the period under review, and the period for which they served on the committee are disclosed in the integrated report. |
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Principle 3.3: The audit committee is chaired by an independent non-executive director. |
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Practice: |
The chairperson of the audit committee is an independent non-executive director and not the chairperson of board. |
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The chairman of the audit committee is Mr John Macey who is an independent non-executive director. |
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Practice: |
The chairperson of the audit committee is selected by the board. |
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Practice: |
the chairperson of the audit committee attends the AGM. |
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Principle 3.4: The audit committee oversees integrated reporting |
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Practice: |
The audit committee recommends the integrated report for approval by the board. |
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Practice: |
The audit committee arbiters between the management and the external auditors when there is a disagreement on auditing and accounting matters. |
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Practice: |
The audit committee has regard to all factors and risks that may impact on integrity of the integrated report; e.g.. judgements, changes in accounting policies, significant or unusual transactions, factors that may predispose management to present misleading information, any evidence that brings into question any previously published financial information, etc. |
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Practice: |
The audit committee reviews a documented assessment by the management of the going concern premise of the company. |
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A going concern, liquidity and solvency assessment is performed every quarter by management and reviewed by the Audit Committee |
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Practice: |
The audit committee considers the need to issue interim results. |
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Practice: |
The audit committee reviews the content of summarised information. |
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Practice: |
The audit committee engages the external auditors to provide assurance on the summarised financial information. |
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Practice: |
The audit committee recommends to the board the whether to engage an external assurance provider on material sustainability issues. |
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External assurance has not been provided on sustainability matters. |
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Practice: |
The audit committee evaluates the independence and quality of the external assurance providers on sustainability. |
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External assurance has not been provided on sustainability matters. |
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Practice: |
The audit committee reviews the disclosure of sustainability issues in the integrated report to ensure that it is reliable and does not conflict with the financial information. |
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Principle 3.7: The audit committee should be responsible for overseeing internal audit |
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Practice: |
The audit committee is responsible for the appointment, performance assessment and/or dismissal of the CAE or outsourced internal audit service provider. |
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An internal auditor was appointed, The board, via the Audit & Risk Committee, ensures that internal audit is effective and risk-based.
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Practice: |
The internal audit plan is approved by the audit committee. |
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Practice: |
The audit committee ensures that the company's internal audit function is independent and has the necessary resources, standing and authority within the company to enable it to discharge its functions. |
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Practice: |
The audit committee oversees cooperation between external and internal audit to avoid overlapping of audit scope. |
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Practice: |
The audit committee ensures that the internal audit function is subjected to an independent quality review as and when it determines it appropriate. |
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Principle 3.8: The audit committee is an integral component of the risk management process. |
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Practice: |
The risk committee has oversight of the company's risk management function. |
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Practice: |
The terms of reference of the audit committee set out its responsibilities regarding risk management. |
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Practice: |
The audit committee specifically has oversight of financial reporting risks, internal financial controls, fraud risks as these relate to financial reporting and IT risks as these relate to internal reporting. |
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Practice: |
The audit committee discloses in the integrated report the nature and extent of material weaknesses in the design, implementation or execution of financial controls that resulted in material financial loss, fraud or material errors. (Only applicable in the event that there has been material financial loss, fraud or material errors resultant from weakness in financial controls.) |
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There were no material weaknesses in the design, implementation or execution of financial controls identified during the year. |
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Practice: |
There is a statement from the board in the integrated report on the effectiveness of internal financial controls based on a formal documented review thereof. |
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Practice: |
There is a risk committee consisting of board members. |
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The risk responsibilities are delegated to the audit and risk committee. |
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Principle 3.9: The audit committee is responsible for the recommending the appointment of the external auditor and overseeing the external audit process. |
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Practice: |
The audit committee recommends to shareholders the appointment, reappointment and removal of external auditors. |
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Practice: |
The audit committee approves the external auditors' terms of engagement and remuneration. |
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Practice: |
The audit committee monitors and reports on the external auditor's independence. |
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Practice: |
The audit committee defines a policy for non-audit services provided by the external auditor. |
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Practice: |
The audit committee reviews any accounting and auditing concerns identified as a result of the internal or external audit. |
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Practice: |
The audit committee is informed of any Reportable Irregularities identified and reported by the external auditor. |
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Practice: |
The audit committee reviews the quality and effectiveness of the external audit process. |
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Principle 3.10: The audit committee has reported to the board and the shareholders as to how it has discharged its duties. |
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Practice: |
The audit committee reports internally to the board on its statutory duties and duties assigned to it by the board. |
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Practice: |
The audit committee reports to the shareholders on it's statutory duties. |
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Practice: |
The integrated report includes commentary in any way the committee considers appropriate on the financial statements, the accounting practices and the internal financial control of the company. |
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Practice: |
There is a description in the integrated report of how the audit committee carried out its functions in the period under review. |
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Practice: |
A statement on whether the audit committee is satisfied that the auditor is independent of the company is included in the integrated report. |
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Principle 4.1: The Board is responsible for the governance of risk. |
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Practice: |
A policy and plan for a system and process of risk management have been developed. |
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A policy and a plan that provide for an effective system and process of risk management have been developed and approved by the board |
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Practice: |
The board's responsibility for risk governance is expressed in the board charter and risk policy and plan. |
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The board's responsibility for risk governance is set out in both the board charter and risk policy and plan. |
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Practice: |
The risk policy includes: the company's definitions of risk terms and risk management; risk management objectives; the risk approach and philosophy; and the various responsibilities and ownership for risk management within the company. |
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The company's risk policy incorporates all of the above. |
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Practice: |
The risk plan includes: the company's risk management structure; the risk management framework - i.e. the approach followed for instance COSO, ISO, IRMSA ERM Code of Practice, IRM (UK), etc; the standards and methodology adopted - this refers to the measureable milestones such tolerances, intervals, frequencies, frequency rates, etc; risk management guidelines; reference to integration through for instance training and awareness programmes; and details of the assurance and review of the risk management process. |
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The integrated report discloses how the board has satisfied itself that risk assessments, responses and interventions are effective. |
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Practice: |
The integrated report discloses how the board has satisfied itself that risk assessments, responses and interventions are effective. |
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Principle 4.2: The Board has determined the levels of risk tolerance |
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Practice: |
The board sets the levels of risk tolerance every year. |
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The board reviews the risk appetite and tolerance threshold on an annual basis. |
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Practice: |
The board monitors that risks taken are within the tolerance and appetite levels. |
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The board monitors that risks are taken within the company's tolerance and appetite levels. |
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Practice: |
It is disclosed where the limits of risk appetite exceed, or deviated materially from, the limits of the company's risk tolerance (the company's ability to tolerate). |
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Principle 4.3: The risk committee and/or audit committee has assisted the Board in carrying out its risk responsibilities. |
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Practice: |
The risk committee considers the risk policy and plan. |
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Practice: |
The risk committee monitors the whole risk management process. |
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Practice: |
The risk committee reviews the risk management progress and maturity of the company, the effectiveness of risk management activities, the key risks facing the company, and the responses to address these key risks. |
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Practice: |
Membership of the risk committee includes executive and non-executive directors; members of senior management and independent risk management experts to be invited, if necessary. |
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The risk responsibilities are delegated to the audit and risk committee. Only independent non-executive directors are members of the committee and executives attend by invitation. |
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Practice: |
The risk committee has a minimum of three members. |
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Practice: |
The risk committee members collectively have adequate and appropriate knowledge, skills and experience on risk. |
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Principle 4.4: The Board has delegated to management the responsibility to design, implement and monitor the risk management plan. |
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Practice: |
The board's risk policy and plan is implemented by management by means of risk management systems and processes. |
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The risks are mapped to the related strategic objective on which it could impact. The probable effects of the risk, the inherent risk assessment, the affected stakeholders and management's strategic response to the risk. |
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Practice: |
The Chief Risk Officer (CRO) or other senior employee responsible for risk management is a suitably experienced person who has access to and interacts regularly on strategic matters with the board and/or appropriate board committee and executive management. |
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The acting CEO is mandated with this function together with other suitably qualified senior executives. |
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Principle 4.5: The Board has ensured that risk assessments are performed on a continual basis. |
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Practice: |
The board ensures that effective and ongoing risk assessments are performed. |
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Identification and review of the company's risk register is a standing agenda item in management meetings to ensure on-going identification and assessment of the risk environment. All risks are evaluated in terms of probability and impact as per the principles set out in the risk policy and framework approved by the board. |
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Practice: |
A systematic, documented, formal risk assessment is conducted at least once a year. |
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The audit and risk committee meets quarterly and focuses on the assessment of risks across the business. Management review risks on a quarterly basis and any significant risks are reported to the audit and risk committee. |
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Practice: |
Risks are prioritised and ranked to focus responses and interventions. |
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Risks are prioritised and ranked in order to focus responses and interventions to those risks outside the board's tolerance limits. The board identifies and ranks top of mind risks that could impact the ability of the company to achieve its strategic priorities. |
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Practice: |
A top-down approach is adopted in risk assessments without being limited to strategic and high-end risks only. |
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Risks are identified using a top-down and bottom-up approach. The enterprise risk management framework and policy are utilised to guide this process. |
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Practice: |
The board regularly receives and reviews a register of the company's key risks. |
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The board regularly receives and reviews a register of the company's key risks. The risks are managed and monitored on an ongoing basis. Quarterly risk reports are provided to the audit and risk committee which in turn provides feedback to the board. |
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Practice: |
The risk assessment process involves the risks affecting the various income streams of the company, the critical dependencies of the business, the sustainability and the legitimate interests and expectations of stakeholders. |
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Risks are assessed based on their potential impact on the business (strategy, operations, human resources, asset management, finance), including the likelihood of the risk occurring. |
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Practice: |
The board ensures that key risks are quantified where practicable. |
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The board ensures that key risks are quantified where practicable. |
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Principle 5.2: IT has been aligned with the performance and sustainability objectives of the company. |
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Practice: |
The board ensures that IT strategy is integrated with the company's strategic and business processes. |
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Services are outsourced and internal audit provides assurance that the IT controls are in place as it relates to the property manager. |
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Practice: |
The board ensures that there is a process in place to identify and exploit opportunities to improve the performance and sustainability of the company through the use of IT. |
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The board ensures that there is a process in place to identify and exploit opportunities to improve the performance and sustainability of the company through the use of IT. |
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Principle 5.3: The Board has delegated to management the responsibility for the implementation of an IT governance framework. |
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Practice: |
Management is responsible for the implementation of all the structures, processes and mechanisms for the IT governance framework. |
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Management is responsible for the implementation of all the structures, processes and mechanisms of the IT governance framework. |
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Practice: |
The individual responsible for IT is a suitably qualified and experienced person who has access and interacts regularly on IT governance matters with the board and /or appropriate board committee and executive management. |
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Services are outsourced and internal audit provides assurance that the IT controls are in place. |
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Principle 5.4: The Board monitors and evaluates significant IT investments and expenditure. |
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Practice: |
The board oversees the value delivery of IT and monitors the return on investment from significant IT projects. |
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No investment in IT required as all services are outsourced. |
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Practice: |
Business strategies and objectives and the role of IT in achieving them are clear. |
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All services are outsourced. |
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Practice: |
Good governance principles apply to all parties in the supply chain or channel for the acquisition and disposal of IT goods or services. |
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All services are outsourced. |
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Principle 5.5: IT is an integral part of the company’s risk management plan. |
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Practice: |
IT risks form an integral part of the company's risk management activities. |
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IT risks form an integral part of the company's risk management process. |
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Practice: |
Management regularly demonstrates to the board that the company has adequate business resilience arrangements in place for disaster recovery. |
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Practice: |
The board ensures that the company complies with IT laws and that IT related rules, codes and standards are considered. |
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All services are outsourced and internal audit provides assurance on compliance. |
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Principle 5.6: The Board ensured that information assets are managed effectively. |
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Practice: |
The board ensures all personal information is treated by the company as an important business asset and is identified. |
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The company has an information security policy which ensures that all company and personal information is classified and treated as an important business asset. The policy is kept under continual review. |
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Practice: |
The board ensures that an Information Security Management System is developed, implemented and recorded that ensures security (confidentiality, integrity and availability of information). |
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All services are outsourced and internal audit provides assurance on compliance. |
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Principle 5.1: The Board is responsible of information technology (IT) governance. |
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Practice: |
The board assumes the responsibility for the governance of IT and place it on the board agenda. |
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The board assumes responsibility for the governance of IT and places it on the board agenda. |
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Practice: |
There is an IT governance framework that supports effective and efficient management of IT resources to facilitate the achievement of the company's strategic objectives. |
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Services are outsourced and internal audit provides assurance that the IT controls are in place as it relates to the property manager. |
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Practice: |
The IT governance framework includes relevant structures, processes and mechanisms to enable IT to deliver value to the business and mitigate IT risk. |
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Practice: |
The board ensures that an IT charter and policies are established and implemented. |
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Services are outsourced and internal audit provides assurance that the IT controls are in place as it relates to the property manager. |
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Practice: |
The board receives independent assurance on the effectiveness of the IT internal controls. |
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Services are outsourced and internal audit provides assurance that the IT controls are in place as it relates to the property manager. |
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Principle 6.1: The Board ensures that the company complies with applicable laws and considers adherence to non binding rules, codes and standards. |
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Practice: |
The company has a system in place to ensure compliance with all applicable laws. |
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Texton’s board of directors is committed to maintaining the corporate governance standards recommended in King III and continues to enhance and align policies, systems and procedures that embed sound corporate governance principles and ethical standards throughout the business. These principles and standards guide directors and management with regards to the delivery of sustainable growth for the benefit of all stakeholders. The board further subscribes to full compliance with the JSE Listings Requirements, the Companies Act and other applicable laws and regulations in those jurisdictions within which the company operates |
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Practice: |
Compliance with applicable laws is understood not only in terms of the obligations that they create, but also for the rights and protection that they afford. |
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Practice: |
The board oversees that the compliance policy and system provide for examination of the context of law, and how other applicable laws interact with it. |
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Practice: |
The board continually monitors the company's compliance with applicable laws, rules, codes and standards. |
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Practice: |
The extent of adherence to applicable non-binding rules, codes and standards is disclosed in the integrated report. |
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Practice: |
Details of how board discharged its responsibility to establish an effective compliance framework and processes are disclosed in the integrated report. |
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Principle 6.4: The Board should delegate to management the implementation of an effective compliance framework and processes. |
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Practice: |
The individual responsible for compliance is a suitably skilled and experienced person who has access to and interacts regularly on strategic compliance matters with the board and/or appropriate board committee and executive management. |
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The CFO monitors compliance. |
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Practice: |
The compliance function has adequate resources to fulfil its duties. |
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Practice: |
The board ensures that a legal compliance policy, approved by the board, has been implemented by management. |
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Management is currently compiling a legal compliance policy. |
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Practice: |
The board receives assurance on the effectiveness of the controls around compliance with laws, rules, codes and standards. |
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Practice: |
Compliance with laws, rules, codes and standards is incorporated in the code of conduct of the company. |
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Management has ensured that an adequate and effective compliance framework is in place. There have not been any material regulatory transgressions during the year. |
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Practice: |
There is disclosure of material (or immaterial, but often repeated) regulatory penalties, sanctions or fines for contraventions or noncompliance with statutory obligations that were imposed on the company or any of its directors or officers; or a statement that no such events took place. |
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Management has ensured that an adequate and effective compliance framework is in place. There have not been any material regulatory transgressions during the year. |
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Practice: |
Management has established the appropriate structures; educates, trains and communicates; and measures compliance. |
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Practice: |
The CEO has appointed an individual responsible for the management of compliance; e.g.. a Chief Compliance Officer. |
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The CFO is responsible for the management of compliance. |
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Principle 7.1: The Board should ensure that there is an effective risk based internal audit. |
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Practice: |
The company has established an internal audit function. |
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An internal auditor was appointed. The Board, via the Audit & Risk Committee, ensures that internal audit is effective and risk-based. |
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Practice: |
The internal audit function evaluates the company's governance processes. |
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Practice: |
The internal audit function performs an objective assessment of the effectiveness of risk management and the internal control framework. |
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Practice: |
The internal audit function systematically analyses and evaluates business processes and associated controls. |
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Practice: |
The internal audit function adheres to the IIA Standards and code of ethics. |
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Practice: |
The internal audit function provides a source of information as appropriate, regarding instances of fraud, corruption, unethical behaviour and irregularities. |
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Practice: |
Where there is no formal internal audit function, full reasons for it are disclosed in the company's integrated report, with an explanation as to how adequate assurance of an effective governance, risk management and internal control environment have been maintained. |
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Principle 7.5: Internal audit should be strategically positioned to achieve its objectives. |
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Practice: |
The internal audit function is independent and objective. |
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Practice: |
The internal audit function reports functionally to the audit committee. |
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Practice: |
The CAE has a standing invitation to attend executive committee meetings. |
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Practice: |
The internal audit function is a skilled and resourced as is appropriate for the complexity and volume of risk and assurance needs. |
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Practice: |
The CAE develops and maintains a quality assurance and improvement programme. |
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Principle 8.1: The Board should appreciate that stakeholders’ perceptions affect a company’s reputation. |
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Practice: |
The gap between stakeholder perceptions and the performance of the company is managed and measured to enhance or protect the company's reputation. |
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Practice: |
The company's reputation and its linkage with stakeholder relationships is a regular board agenda item. |
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Stakeholder engagement is a regular agenda item for both audit and risk committee and board. |
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Practice: |
Stakeholders which could materially affect the operations of the company are identified, assessed and dealt with as part of the risk management process. |
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Texton has identified all our material stakeholder groups and prioritised stakeholder concerns as part of our risk management activities. We understand that proactive and transparent stakeholder engagement is essential to preserving our corporate reputation. Stakeholder engagement and communication is proactively managed and driven through various channels and platforms, both formal and informal, targeting all of Texton's key stakeholders. |
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Practice: |
The process for identification and taking account of the legitimate interests and expectations of stakeholders is reviewed at least once a year. |
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The process for identification and evaluation of the legitimate interests and expectations of stakeholders is reviewed at least once a year. |
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Principle 8.2: The Board should delegate to management to proactively deal with stakeholder relationships. |
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Practice: |
Management develops a strategy and formulates policies for the management of relationships with each stakeholder grouping. |
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Management develops a strategy and formulates policies for the management of the relationship with each stakeholder grouping. |
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Practice: |
The board oversees the establishment of mechanisms and processes that support stakeholders in constructive engagement with the company. |
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Practice: |
The board encourages shareholders to attend the AGMs. |
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The Notice of AGM is released on SENS, displayed on the company's website and posted to all shareholders. |
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Principle 8.4: Companies should ensure the equitable treatment of shareholders. |
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Practice: |
There is equitable treatment of all holders of the same class of shares issued. |
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The equitable treatment of all holders of the same class of shares is protected in accordance with the Companies Act and the company's Memorandum of Incorporation. |
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Practice: |
The board ensures that minority shareholders are protected. |
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Minority shareholders are protected in accordance with the company's Memorandum of Incorporation. |
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Principle 9.1: The Board should ensure the integrity of the company’s integrated report. |
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Practice: |
The company has controls to enable it to verify and safeguard the integrity of its integrated report. |
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The company's uses a combined assurance model to ensure the integrity and accuracy of our integrated report. The combined assurance model employed a combination of assurance obtained from management, board members and the external auditor. |
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Principle 9.2: Sustainability reporting and disclosure should be integrated with the company’s financial reporting. |
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Practice: |
The board includes commentary on the company's financial results in the integrated report. |
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Practice: |
The board discloses if the company is a going concern. |
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Practice: |
The board ensures that the positive and negative impacts of the company's operations and the plans to improve the positives and eradicate or ameliorate the negatives in the financial year ahead are conveyed in the integrated report. |
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Practice: |
The integrated report discloses the nature of the company's dealings with stakeholders and the outcomes of these dealings. |
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Overall Score |
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Disclaimer
The assessment criteria of the web-based tool, the governance assessment instrument (GAI) have been based on the practice recommendations of the King III report. These criteria are intended to assess quantitative aspects of corporate governance only and not qualitative governance. As such, the results are proposed to serve as an indication of the structures, systems and processes in place and are not intended to include an indication of the governance culture of an entity.
The responsibility for the input of data in order to attain a result through the use of this is that of the user and the entity in respect of which the user licence has been granted (licensee). The results based on the use of the GAI may be based on the subjective opinion of the licensee or the representative user(s) and may not be true reflection of the actual state of the governance structures, systems and processes at the entity.
The The Global Platform for Intellectual Property (Pty) Ltd ("TGPIP") makes no warranty or representation as to the accuracy or completeness of either the assessment criteria or the results. Neither TGPIP nor any of its affiliates nor the software developer shall be held responsible for any direct, indirect, special, consequential or other damage of any kind suffered or incurred, as a result of reliance on the results produced through the use of the GAI.
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