CORE
POLICY
The directors of Zambeef Products PLC are fully committed to the
principles of effective corporate governance and the application
of high ethical standards in the conduct of business.
The group endorses the principles of openness, integrity and
accountability as advocated in its Code of Corporate Governance
and as set out in the King Report on Corporate Governance SA
2002 (King II).
CODE OF CORPORATE GOVERNANCE
The key principles underpinning the governance of the group are
set out in its Code of Corporate Governance, which was updated
by the Audit Committee and approved by Board in November 2006.
Zambeef's Code of Corporate Governance complies with the
requirements of the Lusaka Stock Exchange. The group believes
that a corporate culture of compliance with applicable laws,
regulations, internal policies and procedures is a core
component of good corporate governance. As such, compliance is
one of the most important areas covered by Zambeef's system of
internal control.
The Code spells out the company's commitment towards
shareholders and stakeholders, as well as policies and
guidelines regarding the personal conduct of management and
other employees.
The key sections of the Code of Corporate Governance relate to
Board and Directors, Board Committees, Legal and Compliance,
Internal Audit, Risk, Environmental, Health and Safety and
Social Responsibility Policies, Disclosure & Stakeholder
Communication and Organization Integrity.
BOARD
OF DIRECTORS
The Board of Directors has been appointed by the shareholders
and is responsible to the shareholders for setting the direction
of Zambeef through the establishment of strategic objectives and
key policies.
The Board consists of twelve directors, of whom eight are
non-executive directors and four are executive directors. The
Board considers the non-executive directors to be independent as
described in the King II Report. The non-executive directors,
drawing on their skills, experience and business acumen, have
ensured impartial and objective viewpoints in decision-making
processes and standards of conduct. The mix of technical,
entrepreneurial, financial and business skills of the directors
is considered to be in balance and to enhance the effectiveness
of the Board.
All directors have had access to management and to such
information as was needed to carry out their duties and
responsibilities fully and effectively. The directors have
stayed fully abreast of the group's business through meetings
with senior management and site visits.
One third of the non-executive directors are subject to the
rotation provisions contained in the groups Code of Corporate
Governance and the Companies Act and retire at the Annual
General Meeting.
BOARD COMMITTEES
Subject to specific fundamental, strategic and formal matters
reserved for its decision, the Board has delegated certain
responsibilities to standing sub-committees, which operate
within defined terms of reference laid down by the Board, as
referred to below.
The board has the following sub-committees to assist it with its
duties:
Executive committee
Audit committee
Remuneration committee
Executive Committee
The Executive Committee is chaired by the Board Chairman, Dr
Jacob Mwanza, and its membership consists of the two Joint
Managing Directors and three non-executive directors.
The committee is responsible for advising the Joint Managing
Directors in implementing the strategies and policies determined
by the Board and making quick decisions on issues which cannot
wait for the convening of formal board meetings. The committee
is also responsible for monitoring the performance of the
company.
Audit
Committee
The Audit Committee is chaired by Mr. Lawrence Sikutwa,
non-executive director, and its membership consists of three
non-executive directors and an independent secretary. The
Executive Director, the Finance Director and the Chief Internal
Auditor attend, report and participate at all meetings of the
committee, which ensures cohesion with senior management.
The committee operates within defined terms of reference and
authority granted to it by the Board.
The Audit Committee has met five times during the financial year
to advise the Board on a range of matters, including corporate
governance issues, effectiveness of internal control policies
and procedures, assessing management of risks facing the
business. The committee is also responsible for ensuring
compliance with laws and other regulatory requirements.
The primary role of the Audit Committee is to ensure the
integrity of the financial reporting and the audit process, and
that a sound risk management and internal control system is
maintained. The committee provides an independent oversight of
the group's system of internal control and financial reporting
processes, including the review of the interim and annual
financial statements before they are submitted to the Board for
final approval.
The Audit Committee is required to ensure that all 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. In
pursuing these objectives, the Audit Committee oversees
relations with the external auditors and reviews the
effectiveness of the internal audit function.
The Audit Committee is not aware of any significant cases of
non-compliance with the group's Code of Corporate Governance
during the year under review, nor is it aware of any
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's assessment of the external auditors
performance and independence underpins its recommendation to the
Board to propose to shareholders the re-appointment of the
present auditors Grant Thornton for the year 2006/2007.
Remuneration
Committee
The Remuneration Committee is chaired by Mr. David Phiri,
non-executive director, and its membership consists of three
non-executive directors. The two Joint Managing Directors and
the Executive Director attend, report & participate at all
meetings of the committee but they do not take part in any
decisions regarding their own remuneration.
The main responsibility of the committee is to review and
approve the remuneration and employment terms and conditions of
the executive directors and senior group employees.
The committee has a clearly defined mandate from the Board aimed
at ensuring that the group's remuneration strategies, packages
and schemes are related to performance, are suitably competitive
and give due regard to the interests of the shareholders and the
financial and commercial health of the company.
In determining the remuneration of the executive directors and
senior group employees, the Remuneration Committee has aimed to
provide the appropriate packages required to attract, retain and
motivate the executive directors and senior group employees. In
discharging its responsibilities, the committee draws
extensively on external surveys and independent advice and
information.
The committee has considered and submitted recommendations to
the Board concerning the fees to be paid to each non-executive
director. Any changes to the fees are approved by the Board and
the shareholders in a general meeting.
INTERNAL CONTROL, RISK MANAGEMENT AND INTERNAL AUDIT
The Board is responsible for the group's system of internal
control and risk management and for reviewing its effectiveness.
To discharge that responsibility, senior management has
appointed a Chief Internal Auditor, who has established the
procedures necessary to implement clear operating procedures,
lines of responsibility and delegated authority.
The
system of internal control, which is embedded in all key
operations, aims to provide assurance that the company's
business objectives are achieved within the risk tolerance
levels defined by the Board. Regular management reporting, which
provides a balanced assessment of key risks and controls, is an
important component of Board assurance.
The company's internal audit function now has a formal
collaboration process in place with the external auditors to
ensure efficient coverage of internal controls and to eliminate
duplication of effort. The key features of the internal control
system that operated throughout the year covered by the
financial statements are described under the following headings:
Control Environment
The Board has put in place a documented organizational structure
with clearly defined and understood lines of responsibility and
delegation of authority from the Board through the CEO (Admin)
to operating units.
Identification and Evaluation of Business Risks and Control
Objectives
The Board has the primary responsibility for identifying the
major business risks facing the group and for developing
appropriate policies to manage those risks and relies on the
reports of the Audit Committee, supported by the Executive
Director, the Finance Director and the Chief Internal Auditor.
Information and Reporting Systems
The group operates a comprehensive annual planning and budgeting
system with an annual budget approved by the Board. Reports
include profit forecasts and cash flow statements, which are
used in determining that the group is in line with its projected
trading/financial forecasts and that it has adequate funding for
its current and future needs.
Risk Management
The Board identifies and monitors risk through the planning
process, the close involvement of the executive directors in the
group's operations and the periodic monitoring of key issues to
ensure that the significant risks faced by the group are being
identified, evaluated and appropriately managed, having regard
to the balance of risk, cost and opportunity.
Monitoring
The
Audit Committee considers that there have been no significant
weaknesses in the system of internal control that resulted in
any material losses or contingencies during the last year or the
period from the balance sheet date to the date of this report.
INSIDER TRADING
The group's Code of Corporate Governance provides that no member
of senior management can acquire shares in the company without
Board approval. Furthermore, no share dealings can take place by
senior management and directors during the “restricted/closed
period”. The Company Secretary is required to table a current
list of shareholders at every Board meeting.
INTEREST IN CONTRACTS
During the year under review, none of the directors had a
significant interest in any material contract or arrangement
entered into by the company or its subsidiaries.
HEALTH & SAFETY, SOCIAL RESPONSIBILITY & THE ENVIRONMENT
Zambeef's environmental policy is aimed at providing a safe and
healthy work place, protecting the environment, and being a
responsible corporate citizen within the communities where we
operate.
In this regard, the group has established strong partnerships
with local communities and supported many community
initiatives, especially in the healthcare and education areas,
that deliver sustainable results and real benefits to the
communities within which it operates.
The
group also aims to comply with all relevant legal obligations
and regulations concerning employee safety and environmental
protection.
Zambeef subscribes to the United Nations Millenium Development
Goals, which aim to:
- Eradicate
extreme poverty & hunger
- Achieve
universal primary education
- Promote
gender equality and empower women
- Reduce
child mortality
- Improve
maternal health
- Combat
HIV/AIDS, Malaria, TB and other diseases
- Ensure
environmental sustainability
Zambeef was
awarded a True Ebony Achievement Award in August 2006 (in the
category of “Community Empowerment”) - these awards are aimed at
singling out outstanding individuals or companies that
contribute to the sustainable development of the Zambian
community.
