Commitment to corporate governance

The TWK Board is committed to responsible corporate citizenship and effective corporate governance. Commitment to the implementation of the Group’s business with integrity, sustainability, equity and accountability is the cornerstone of the Group’s philosophy. In this regard, the Board is committed to complying with the applicable corporate guidelines.

The Group’s corporate best practices as contained in its Memorandum of Incorporation, policies and operating procedures and the application of these are regularly tested against the practical realities and execution thereof. The Board continuously evaluates and considers all applicable legislation, operating codes and practices to ensure that its conduct takes into account the recommendations of the King Code. Where it deviates from specific guidelines, the Board is of opinion that this deviation is warranted and in the best interest of TWK and all its stakeholders, or a process to ensure compliance in the journey of corporate governance is in progress.

The basic principles and practical application of the King Codes are in place throughout the Group and are successfully implemented. The Board is satisfied that the Group complies, where practically possible, with the provisions and recommendations of the King Codes.

TWK

CORPORATE GOVERNANCE

During 2019, corporate governance advisors assisted the Group to independently analyse the corporate governance compliance and effectiveness against the King IV Report on Corporate Governance for South Africa. Several of the recommendations have been or are being implemented with realisation that good corporate governance is a journey and not a destination.

In an environment of comprehensive and changing regulation, and in the context of ongoing growth, TWK focuses on achieving an appropriate balance between the corporate governance expectations of stakeholders and the requirement to deliver consistent and competitive financial returns.

The Board and management will continue with the approach of continuous, increasing improvement in management practices and structures to ensure the expectations of stakeholders with regard to corporate governance are met.

Corporate governance within TWK is more than just a set of rules and regulations — it is the basis for the management of our business on a day-to-day basis.

The Board of Directors (Board)

The Board consists of a number of directors of whom two serve in an executive capacity and the balance serve in a non-executive capacity and are elected by the Company’s shareholders. The non-executive directors retire on a rotation basis after three years, in accordance with the applicable provisions of the Memorandum of Incorporation. Mr. HJK Ferreira (independent director) fulfils the role as lead independent director of TWK Agriculture Holdings (Pty) Ltd, while Mr. CA du Toit fulfils the role as lead independent director or TWK Investments Ltd and TWK Agri (Pty) Ltd.

Non-executive directors are nominated and elected by shareholders and provision is made for a transparent rotation process. Prior to election as director, nominated candidates are evaluated by the Nomination Committee for competence in terms of the Companies Act, good corporate principles and the Memorandum of Incorporation. The Nomination Committee consists of three non-executive directors and makes recommendations to the Board and the shareholders. At the first meeting of the Board, held after each Annual General Meeting of shareholders, the directors elect from among them a chairman and vice-chairman. The chairman and vice-chairman are non-executive directors. There is a Board-approved decision-making framework which delegates certain powers to management.

There is a clear division of responsibilities at Board level. The Board delegates authority to the applicable committees to ensure that all issues of strategy, performance, resources and standards of conduct and responsible corporate governance are applied. The Board is well-balanced and the chairman’s role is separate from that of the managing director. The chairman is responsible for leadership within the Board and facilitates constructive liaison between the Board, management and stakeholders. The managing director is primarily responsible for leadership and management in implementing strategy and operating the business. Although the Board maintains overall responsibility and effective control over the Company, the operation of the daily business of the Company has been delegated to the managing director.

No individual director has unfettered powers of decision-making and all directors have unrestricted access to all information, records, documents and property of the Group. The directors may also obtain independent professional advice regarding the affairs of the Company.

The Board determines the Group’s operations and strategy and is responsible for providing guidance. These include the design and review of the Group’s strategy, budget approvals and major capital spending, monitoring of operating results against budgets, evaluation of the Group’s financial position and performance of the executive management.

The Board is assisted by the Audit and Risk Committee, the Social and Ethics Committee, the Remuneration Committee and the Nomination Committee. The committees function in accordance with approved frameworks. The chairpersons and members of the respective committees, with the exception of the Audit and Risk Committee elected by the shareholders, are elected by the Board according to their expertise in a particular area.

The management of directors’ conflicts of interest is a critical corporate governance issue and strictly regulated in terms of the Companies Act. In the performance of their duties, directors and management are expected to act independently. At every Board meeting, directors and management are given the opportunity to disclose any material interest which may impact the Group. These updated disclosures are noted by the Company Secretary. An annual evaluation is conducted to assess the effectiveness of the Board as a unit, as well as the individual contributions of the directors.

Meetings of the Board and subcommittees are held in accordance with approved meeting procedures. The members of the Board are serious about the Group’s affairs and attendance is excellent.

Board meetings are held regularly as per the annual work plan, or as necessary.

Ethical code of conduct

TWK, its subsidiaries and their staff are committed to acting with honesty and integrity in the performance of their duties and in their personal conduct, according to the highest moral and ethical standards.

The TWK Code of Ethics is a document in which the operation of our business in a legal and ethically acceptable manner is contained. Each director and employee has committed to the Code of Ethics that requires of the employees and directors to carry out their duties in a fair manner and to act accordingly to customers, suppliers and other stakeholders to ensure a reputation of maintaining integrity and responsible behaviour.

Adequate grievance and disciplinary procedures exist in order to promote and ensure the application of the Code of Ethics.

Closed period for trading of shares

The Group maintains a closed period for the trading of shares for a period that precedes the publication of the interim and annual financial results and during certain strategic transactions and related matters, as per the Share Trading Policy.

During such a closed period, no director, staff member or their related persons and entities as defined in the Share Trading Policy, may enter into any transaction related to TWK shares.

Internal control systems and risk management

Risk control and management is an integral part of the Group’s corporate governance framework.

The Group has adopted a proactive approach in managing risks with the application of appropriate controls. Risk assessment is done on a regular basis, in terms of which risks are quantified and prioritised. The Audit and Risk Committee evaluates the internal control process and the outcome of the process. It provides reasonable assurance to the Board and management that risks are managed effectively to ensure sustainability.

Management continuously pays attention to the risk management process and the Internal Audit Department is used to strengthen the Company’s internal control and risk management model.

Internal audit

The internal audit function is carried out independently and in accordance with a specific audit plan approved by the Audit and Risk Committee. The internal auditors report to the Audit and Risk Committee and have direct and unrestricted access to the committee and the chairman of the Board. They enjoy the full support and cooperation of both the Board and management of the Group.

The primary purpose and mission of the internal auditors is to support the Group in identifying operational risks, carrying out an independent assessment of compliance with group policies, risk controls, internal control systems and accounting practices and, where necessary, recommending improvements in respect thereof.

Sustainability

The sustainability of the TWK Group remains the main focus of the Board. TWK is committed to ensuring and expanding the sustainability of its business which is achieved by reducing risk, improving and expanding existing operations and the utilisation of opportunities.

TWK conducts its business in an environmentally responsible manner through the application of ISO and FSC standards. New projects are only undertaken if they can be operated in a sustainable way and in compliance with set financial benchmarks.

The solvency and liquidity for future periods are evaluated on a regular basis by the Board.

TWK’s sustainability is therefore focused on, inter alia, the reduction of risk, improvement of efficiency, conservation of existing revenue streams and the utilisation of opportunities. All actions are measured against minimum expectations and their impact on society and the environment. Quick adaptation and movement in changing conditions is the key focus for TWK’s sustainability.

Reporting controls

The Group follows a practice of monthly financial audits and reporting of all operational departments. The management of cash, bank relations, human resources and real estate-related business is done on a central basis.

Senior management meets on an ongoing basis to take stock of performance, commercial and strategic issues.

Compliance with legislation

The responsibility for compliance with legislation rests with the Board. Ongoing attention is given to the applicable legislation and it also forms part of the risk management model. Continuous awareness campaigns and training is conducted throughout the Group.

Human resources and Remuneration

The Remuneration Committee is tasked by the board to independently approve and oversee the implementation of a remuneration policy that will encourage the achievement of the Group’s strategy. The Board has the final authority for the approval of the remuneration philosophy and policy and provides oversight for the execution of the policy.

The Group’s staff is an important resource in achieving the organisation’s objectives and the implementation of internal control systems. The Group has excellent staff and executives with proven experience in the industry. Succession planning per division is an ongoing process.

TWK is committed to creating and maintaining an environment that provides equal opportunities for all employees. The remuneration policy outlines the governance framework through which remuneration is determined and managed throughout the Group.

It is the general policy of the Group that the remuneration of all employees should be fair and that employees who accepted the challenge to achieve the strategic goals of the Company and are excelling in it, should be appropriately remunerated.

The remuneration of the non-executive directors is reviewed annually and tabled at the annual general meeting for approval. The Remuneration Committee benchmarks this remuneration against independent surveys to ensure a market related and competitive remuneration. The non-executive directors do not participate in any short-term or long-term incentive schemes.

The remuneration of the executive directors comprise of guaranteed pay, short-term and long-term incentives. The Remuneration Committee determines the executive directors’ and other executives’ total remuneration and reviews it annually, using benchmarks based on independent surveys and specialist advisors from time-to-time.

Ongoing training of employees takes place on the basis of pre-planned training sessions that aim to develop the employee’s potential for the benefit of the Company and the individual. The Group also has an excellent relationship with the AgriSeta.

A safe and healthy workplace is created and maintained in accordance with the provisions of the Occupational Health and Safety Act.

The Board believes that senior management has the necessary expertise and experience to implement the Group’s strategy and to run the business.

Black economic empowerment (BEE)

TWK supports broad based black economic empowerments that fits into the Group’s business strategies and takes into account the importance of meaningful empowerment for sustainable growth.

The TWK Group’s restructuring was implemented on 1 September 2014 and since then, the Vumbuka Trust, a broad-based black economic trust, holds a 25% shareholding in TWK Agri (Pty) Ltd.

Community involvement

TWK believes in making a difference in the communities it operates in and supports a range of different organisations by means of donations and sponsorships. TWK remains deeply involved in the support or black emerging farmers that gained access to land through the land reform processes.

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TWK AGRI (PTY) LTD.

CONTACT US

T: (017) 824 1000

F: (017) 824 1077

E: twk@twkagri.com

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