The board of directors (“the Board”) of Crookes Brothers is the governing body and is committed to the good corporate governance principles as set forth in King IV, these being the overarching principles for an ethical foundation.

The board’s objective is to ensure responsible business leadership in a manner that balances the needs and rebuilds the trust of all stakeholders. The board aims to retain full and effective control of the group and to give strategic direction to management.

The detailed responsibilities of the Board are set out in a formal charter, which is updated from time to time to align it with corporate law and governance best practice. The group has adopted a written Directors’ Code of Conduct, with which all Directors are required to comply, as well as a formal document detailing the Chairperson’s roles and responsibilities.

The board regularly evaluates its own performance and that of its members through a formal process.

For the year under review, the Board fulfilled its responsibilities in compliance with its charter.

No fraud or unethical behaviour was detected during the external audit for the FY2024 period.

The Board strives to provide effective leadership based on an ethical foundation as articulated in its Code of Business Ethics.

The Board delegates the overall governance of ethics to the Social and Ethics Committee.

The Social and Ethics Committee monitors compliance with the group’s Code of Ethics, and reports any such breaches to the Board.

There were no breaches of the Code of Business Ethics during the FY2024 period.

The Board ensures that the Group is a responsible corporate citizen by having regard to not only the financial aspects of the business of the Group but also the impact that business operations have on the environment and the society within which it operates.

The Social and Ethics Committee assists the Board to fulfil its corporate governance responsibilities relating to good corporate citizenship.

The Social and Ethics Committee monitors compliance with relevant legislation and regulations as well as with the group’s Code of Ethics.

During the FY2024 year, the Social and Ethics Committee approved the group’s corporate social responsibility policy and CSI budget, reviewed the Employment Equity report, reviewed the Health and Safety Incident Report, reviewed and considered the group’s annual ESG Report, as provided by an independent consultant, noted the group’s Talent Management and Employee Development Reports, and monitored the employee housing strategy plan.

The board is responsible for setting the strategic direction of the group, ensuring that adequate oversight and control of corporate governance structures are adhered to.

The Board has approved the Implementation Report, which contains the key performance measures and targets for management.

The Human Capital Committee oversees the implementation of the strategy and plans carried out by management against these agreed performance measures and targets, and reports to the Board.

The board delegates overall risk governance to the Audit Committee.

Through the monitoring of business, financial and other risks, the Audit Committee satisfies itself that it dedicates sufficient time to this responsibility.

The Risk Committee reports to the Audit

Committee and Board.

The Risk Committee has oversight over:

• the group delegation of authority documents;
• strategic, business, financial and agricultural risks;
• tax, litigation and new legislation that affects the group;
• IT governance and the internal audit activities; and
• Compliance.

The Board monitors to ensure that the Group and Company have adequate resources to continue operating for the foreseeable future and that it is therefore appropriate to adopt the going concern premise.

The Integrated Report to stakeholders covers the performance of the operations of the Crookes Brothers Limited Group, which includes subsidiaries, associate companies and joint ventures.

The aim of the Integrated Report is to communicate to all stakeholders an overview of our operations in a format that is both comprehensive and clear. The full report, which includes full Group Audited Financial Statements, is available on our website at www.cbl.co.za.

King IV and certain elements of The International Integrated Reporting Framework, have guided the compilation of the Integrated Report.

The Integrated Report, together with the full report that includes Consolidated Financial Statements, provide information

in accordance with the following:

• The framework concepts and the measurement and recognition requirements of IFRS® Accounting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards)
• Financial Pronouncements as issued by the Financial Reporting Standards Council
• The requirements of the Companies Act of South Africa
• The JSE Listings Requirements
• Memorandum of Incorporation

The external auditors, BDO South Africa Incorporated, have provided independent assurance in respect of the Consolidated Financial Statements.

The Board of Directors acknowledges its responsibility to ensure the integrity of this report and, in the opinion of the Board, it addresses all material issues and fairly presents the integrated performance of the organisation.

The Board has authorised the release of the Integrated Report for 2024 on 31 July 2024.

The Board acts as the focal point for, and custodian of, corporate governance by managing its relationship with management, the company’s shareholders and other stakeholders of the Group along sound corporate governance principles.

The Board follows a combined assurance model, which proposes that assurance be affected on three levels, by management, internal assurance providers and external assurance providers.

In accordance with these principles:

• the first level of assurance is via management’s quality assurance processes and self-audits, with the reporting line to the Management Committee;
• the second level is through risk management, compliance functions and the safety, health and environmental management processes, with the reporting line to the agricultural managers’ forum and the Executive Committee; and

Board composition

The group has a unitary board structure, which comprises a majority of non-executive Directors, most of whom are independent.

The balance of power within the Board allows for a positive interaction between the Board members and also ensures the diversity of views within the Board. Having a mix of executive and non-executive Directors on boards, ensures that decisions made by the Board takes into account both operational views and effects as well as independent views and judgement.

The board is committed to diversity on all spheres. Currently the Board consists of 22% female appointments and 33% of black persons, as defined in the Broad-Based Black Economic Empowerment Act, 2003 as amended from time to time.

The responsibility for the functioning of the Board and the executive responsibility for managing the business are separated and the Chairperson is an independent non-executive director.

The Chief Executive Officer and Chief Financial Officer are executive members of the Board and the roles of the Chairperson, and the Chief Executive Officer are separate.

The majority of the nine Board members are non-executive directors (two board members are the executive directors). Of the seven non-executive directors, five are independent.

Non-executive Directors are subject to retirement and re-election by shareholders at intervals of no more than three years.

Non-executive Directors who have served three terms or more of three years each are subject to retirement and re-election annually.

The Independence of all non-executive directors is assessed on an annual basis, with a specific focus on the independence of independent non-executive directors who have served for more than nine years and the outcome of such assessment is reported on in the Integrated Report.

The Board considered the independence of all its independent non-executive directors during the financial year and was satisfied that all five of them remain independent.

Nomination, election, and appointment of members to the Board

Appointments to the Board are made after consideration of the recommendations of the Human Capital Committee and are subject to confirmation by shareholders at the first Annual General Meeting after appointment.

Directors have a responsibility to acquaint themselves with their fiduciary duties, and responsibilities, as well as with the issues pertaining to the operations and business environment of the Group so that they are able to fulfil their duties.  To assist them, the board will establish a formal orientation programme for new directors which include background material, meetings with senior management and visits to the various Group locations and projects.

The Human Capital Committee reviews and approves the policy for diversity appointments onto the Board.

Independence and conflicts

Declarations of interest are tabled at each subsidiary and main company Board meeting.

In the event of a conflict of interest arising, conflicted directors are required to recuse themselves from discussions.

Chairperson of the Board

The role and responsibilities of the Chairperson is documented in the Board Charter.

The Chairperson of the Board is:

• an independent non-executive director
• a member of the Human Capital Committee, but not its chair.
• a member of the Agricultural Committee, but not its chair.

The Board has established five committees to assist in discharging its responsibilities without in any way reducing its accountability.

During the FY2024 year, the board formally delegated responsibilities to:

• The Audit committee
• The Risk committee
• The Human Capital committee
• The Social and Ethics committee
• The Agricultural committee

Board-approved charters define terms of reference, reporting procedures and scope of authority for each board committee.

The committees and the Board review and update the charters annually to stay abreast of developments in corporate law and governance best practice.

Independent non-executive Directors chair the Board committees and membership of the committees is made up predominantly of non-executive Directors. The Chairpersons of the Board committees attend the Annual General Meeting in order to respond to shareholder queries.

The Chairpersons and members of the Board committees are appointed annually at the first board meeting after the Annual General Meeting. Audit committee members are elected each year at the Annual General Meeting of shareholders.

The committees also serve as committees for the subsidiaries within the group. For governance purposes, each subsidiary has appointed the committees through each entity’s board charter

The board annually evaluates its own performance and that of its members through a formal process of detailed evaluation questionnaires, discussion of results and formulation of action plans at a board meeting, as well as individual engagement between the Chairman and each board member. Board committees follow similar processes.

For the FY2024 year, a formal assessment was done for the Board, Board committees and Company secretary, with an overall satisfactorily outcome regarding the workings of the Board along with its effectiveness, decision making and strategy.

The Board has appointed a Chief Executive Officer, who is responsible for leading strategy implementation and who regularly reports to the board on the progress thereof.

A Delegation of Authority Matrix indicating the matters reserved for the Shareholders, Chairperson, Board, Committees and senior management has been developed.

The Delegation of Authority Matrix is largely governed by the principles of King IV and the requirements of the JSE Limited. This delegation is also included in the Board Charter. These documents are reviewed annually and provide clarity regarding levels of responsibility for decision-making within the Company.

The Audit Committee was satisfied that the Chief Financial Officer for the period under review, possessed the appropriate expertise and experience to meet his responsibilities in that position.

The Audit Committee was also satisfied with the expertise and adequacy of resources within the finance function.

In making these assessments, the Audit Committee obtained feedback from both external and internal audit.

The Board delegates overall risk governance to the Audit Committee.

The Risk Committee in-turn reports to the Audit Committee and Board.

A charter governs the Risk Committee with a formal risk policy and risk strategy document guiding its responsibilities and activities.

The primary objective of the Risk Committee is to assist the Audit Committee and the Board to fulfil their corporate governance responsibilities relating to the management of risk in the group.

There is an ongoing process for identifying, evaluating and managing the strategic risks faced by the group. These are subject to review and discussion at both committee and board level.

Effective 1 April 2024, the Audit Committee assumed all of the roles previously fulfilled by the Risk committee.

The Board delegates Information Technology (IT) Governance to the Audit Committee.

The Audit Committee has oversight responsibility for IT governance and manages the group’s adherence through various charters, plans, policies, procedures and practices.

Management monitor IT governance and the adherence to various policies and procedures, and provides written feedback to the Audit Committee at each meeting.

For the FY2024 year, The Audit Committee is satisfied that the reports of management adequately address IT governance requirements, including the appropriateness of the IT strategy and policies, systems and network architecture, applications, disaster recovery and cyber security management.

The Board, with the assistance of management, the Audit Committee and the Social and Ethics Committee, ensures that the Company complies with applicable laws and regulations as well as adopted non-binding rules, codes, and standards.

There were no material penalties, sanctions, fines for contraventions of or non-compliance with regulations during the period under review.

The Board has delegated the responsibility for implementing compliance to management.

The essence of the Group’s Remuneration Management Strategy is to employ the necessary skills for the Group to achieve its strategic objectives and to base remuneration on personal and Group performance in accordance with competitive market practices.

The application of the Group’s Remuneration Management practices ensures that performance management remains an integral part of remuneration with the aim of attracting, retaining and motivating talented people and encouraging superior performance. It also forms an integral part of competing to be a preferred employer.

The Board has delegated responsibility for oversight of the Group’s Remuneration Management Policy and practices to the Human Capital Committee.

Crookes Brothers Limited Remuneration Policy is consistent throughout the Group, while at the same time takes into account regional and industry norms. This is achieved by offering a combination of fixed and incentive- based remuneration to attract the right mix of expertise and experience to achieve the Group’s objectives.

Remuneration packages offered comprise the following elements, as appropriate for different job grades:

• Fixed remuneration, including base pay and benefits (all permanent staff).
• Short-term incentive, based on achievement of short-term financial and strategic objectives.
• Long-term incentive, comprising Deferred Bonus Shares, based on achievement of long-term financial and strategic objectives, to reward senior executives for increasing returns to shareholders.

The Board is assisted by The Audit Committee in monitoring the effectiveness of the Group’s control environment.

The Audit Committee ensures that a “combined assurance” model is applied to provide a coordinated approach to all assurance activities.

In achieving this “combined assurance”, the Audit Committee obtains and reviews the audit reports from both external and internal audit.

The Audit Committee, having studied his audit reports, has reported to the Board that it is satisfied that the assurance results indicate an adequate and effective control environment and integrity of reports for better decision-making.

The Audit Committee recommended to the Board to re-appoint BDO Incorporated South Africa as its external auditors. The re-appointment will be tabled to shareholders at the 2024 Annual General Meeting for ratification.

The Audit Committee is satisfied that the external auditor is independent of the Group and Company.

No key governance or control failures were experienced in the period under review.

In addition, no reportable irregularities were identified and reported by the external auditors in terms of the Auditing Professions Act, No 26 of 2005.

The Board is committed to responsible business leadership in a manner that balances the needs and builds the trust of all stakeholders. To this end, the Board delegates Stakeholder Management monitoring to the Social and Ethics Committee.

Key stakeholders are identified by management and the Board.

Broadly, our key stakeholder groups include:

• Business partners
• Banks and funders
• Communities
• Employees
• Shareholders and investors
• Customers and suppliers
• Government and regulators

The Social and Ethics Committee encourages proactive engagement with stakeholders.

Transparent communication and engagement with stakeholders are vital to ensure that the principles on stakeholder management are adopted in line with King IV.

The Board believes in the principle that all shareholders should receive equal consideration regardless of the size of their shareholdings.

The responsibility for proactive and constructive stakeholder engagement is delegated to management.