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Corporate Governance Report 2004
As mandated by Clause 8.52,
Section 8 of the Rules of the Lusaka Stock Exchange, the Board is
required to report on the extent of the Company's compliance with
the Code on Corporate Governance and Practices as contained in the
King Report.
The directors of Zambeef Products PLC recognize the need to conduct
the affairs of the Group with integrity and in accordance with
generally accepted corporate practices. The directors support the
comprehensive approach to corporate governance set out in the King
Report and accept responsibility to ensure that the principles
incorporated in the Code of Corporate Practices and Conduct are
observed. While full compliance is an evolving process, the
directors are committed to continually improve operational and
corporate practices to achieve this aim.
The Group's commitment to promoting the highest standards of ethical
behaviour is encapsulated in the principles set out in the code. The
core values communicated to all employees align with the principles
of integrity, transparency, honesty and equal opportunity that are
inherent in the Code of Corporate Practices and Conduct as set out
in the King Report.
The cornerstone of the Code is the appointment of a Board of
Directors comprising executive and non-executive directors. The non-
executive directors are all eminent and respected members of the
business community with a wide and varied range of corporate
experience and well suited to make a valuable and constructive
contribution to the affairs of Zambeef Products PLC.
The composition of the Board engenders shareholder confidence in the
transparent and able manner in which the executive directors manage
the affairs of the Company, in which they have invested.
In accordance with the requirements of Section 206 of the Companies
Act, one third of the directors must retire in rotation at each
annual general meeting but are eligible for re-appointment.
During the year under review, as empowered by Section 217 (6) of the
Companies Act and Section 77 of the Articles of Association, the
Board appointed two Committees which are fundamental to compliance
with the Code, namely an Audit Committee and a Remuneration
Committee.
AUDIT COMMITTEE
The Committee consists of the following members: -
Independent Non-Executive Directors
- Mr Lawrence Sikutwa (Committee Chairman)
~
Managing Director
Madison Insurance Company Ltd
- Ms Irene Mukombe Muyenga
~
Managing Director -
Zambia State Insurance Company Ltd
- Mr John Rabb ~
Director of Wellsprings Ltd
Former Managing Director and now non-executive director of Wooltru
Ltd and Spur Holdings Limited (both listed on the Johannesburg Stock
Exchange).
Advisor and Committee Secretary
- Oliver John Irwin
~Fellow of the Institute of Chartered Accountants, United Kingdom and
Zambia
The Audit Committee is required to provide an independent oversight
of the Company's systems of internal control and financial reporting
processes including the review of the annual and interim financial
statements before they are submitted to the board for final
approval.
The Audit Committee is expected to advise the Board on issues
relating to the application of the accounting standards and
guidelines laid down by the Zambian Institute of Chartered
Accountants and the requirements of the Securities Act Cap 354 and
Part VIII of the Companies Act 388 regarding the form and content of
financial statements and directors and auditors reports.
The Audit Committee is required to ensure that appropriate controls
and processes are in place to identify all significant business,
strategic, statutory and financial risks and that these risks are
being effectively monitored and managed.
If required the external auditors, chief executive and legal advisor
attend meetings of the Audit Committee by invitation.
The Audit Committee has recommended that the Company should engage a
suitably qualified Chief Internal Auditor to monitor and control the
internal audit function, which is of vital importance in a Group of
such complexity and geographically widespread operations.
The Audit Committee is required to keep under review the Company's
policy on the independence and objectivity of the external auditors
and the nature and quantum of non-audit work awarded to the
auditors. The auditors are required to provide the Committee with
written confirmation of independence and an assurance that all
requirements for partner rotation are being met.
As covered in the Code, the Audit Committee is recommending to the
Board a mechanism to enable staff, in confidence, to raise concerns
about possible improprieties in matters of financial reporting and
breaches of the company's internal control system.
The Audit Committee performs a pivotal role in the implementation of
the Code of Good Governance and is required to carry out its terms
of reference and submit its reports to the Board through the Chief
Executive (Admin).
From the risk assessment carried out by the Audit Committee under
its terms of reference and in conjunction with the Chief Executive
(Admin), External Auditors and Legal advisor, the Committee reported
that at the end of the financial year there was no ascertainable
risk from any litigation pending, in progress or threatened, which
could be regarded as material to the Group's financial position.
The Audit Committee is not aware of any cases of non-compliance with
the Code of Good Corporate Governance during the year under review
in so far as the Code has been implemented, but is cognizant of the
fact that good Governance is an evolving process.
Zambeef Products PLC is committed to being a leader in corporate
reporting and compliance.
REMUNERATION COMMITTEE
The members of the Remuneration Committee appointed by the Board
are: -
Independent Non-Executive Directors
- David Phiri (Committee Chairman)
Past Governor of the Bank of Zambia
Director of many public and private companies including Zambia
Venture Capital Fund, SKF Ltd and Holiday Inn.
- Jacob Mwanza
Board Chairman of Zambeef Products PLC
Last Governor of the Bank of Zambia.
Chairman of Citibank Zambia Ltd and director of other major
companies
- Robert Rodney Clyde-Anderson
Director of Squares Ranch Limited and Zambezi Ranching and Cropping
Ltd.
Executive Directors
- Carl Irwin - CEO (Admin)
- Francis Grogan - CEO (Operations)
The Committee is required to determine Zambeef Products PLC's policy
for executive remuneration and the entire individual remuneration
terms and packages for the executive directors and other senior
executives. In doing so, the Committee is required to give the
executives every encouragement to enhance the Group's performance
and to ensure that they are fairly, but responsibly, rewarded for
their individual contributions.
The objective of the Committee is to provide a remuneration package
comprising short-term rewards (salary, benefits and annual
performance bonus) and long-term rewards, competitive with companies
of a similar size, activity and complexity, so as to attract,
motivate and retain high quality individuals who will contribute
fully to the success of each of the businesses in which Zambeef
Products PLC is involved.
The Committee has established remuneration packages for the Chief
Executive Officers and is preparing a code of salary and benefits
structures for all other categorized senior members of staff.
To comply with the Code of Good Governance the Committee is also
reviewing the level and basis of remuneration pertaining to all the
other employees of the Group having regard to cost of living and
other social and environmental factors.
The Committee draws on external market survey data from independent
advisors and agencies to ensure that all arrangements will be
appropriate and reasonable.
HEALTH
The Group's approach to mitigating against the effects of the
HIV/AIDS pandemic has seen development over the year.
Zambeef Products PLC respects the right of all employees to maintain
confidentiality regarding their HIV/AIDS status and is committed to
fostering a supportive working environment for employees infected by
the virus. Staff are being educated and counseled about prevention
treatment and life management on the basis of educational material
sourced from the HIV/AIDS Action Campaign.
ENVIRONMENTAL AWARENESS
Zambeef Products PLC recognizes that the effect on the environment
of its operations needs to be kept under close review for the
purpose of seeking to ensure a healthy and safe environment for its
employees and the various communities in which its operations are
based.
The Group complies with both international standards and Zambian
legislation with respect to employee safety and environmental
protection.
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