Board of Directors and ExecutiveThe MiX Telematics Board is the focal point and custodian of corporate governance for the Group. Board members are expected to act in the best interest of the Company and the Group and the Company Secretary maintains a register of directors’ interests as required by law.
Directors are appointed on the basis of skill, experience and their contribution and impact on the Group’s activities. The Board decides on the appointment of directors based on recommendations from the nominations and remuneration committee. The Board appoints the independent non-executive Chairman and Chief Executive Officer. The roles of the Chairman and the Chief Executive Officer are distinct.
At least one-third of the non-executive directors retire by rotation each year and stand for re-election at the annual general meeting in accordance with the Memorandum of Incorporation. Directors’ appointments during the year are ratified at the annual general meeting.
The Board currently comprises six non-executive directors and three executive directors. Three of the non-executive directors, including the Chairman, are independent.
An executive committee is in place that is responsible for devising the Group strategy for recommendation to the Board and to implement the strategies and policies approved by the Board. The executive committee is also responsible for the day-to-day business and affairs of the Group.
The Chairman reviews the Board’s performance informally on an ongoing bases; this includes monitoring the contribution of individual directors. This is considered sufficient at this time.
In line with its annual meeting plan, the Board meets at least quarterly. The Board has adopted a charter which clearly defines the responsibilities of the Board. The Board’s primary responsibilities are to create sustainable shareholder value and to provide effective governance over the Company’s affairs. The Company’s non-executive directors provide an independent perspective and complement the skills and experience of the executive directors, assessing strategy, financial plans, performance, resources, transformation, compliance, risk, key performance areas and conduct. A copy of the Board charter may be obtained from the Company Secretary and is available on the Company’s website.
The Board has developed an approvals framework, which delegates specific powers and delegations of authorities to operating management. This approvals framework is updated annually. At Board level, there is a clear balance of power and authority which ensure that no single director has unfettered powers of decision making.
The information needs of the Board and committees are regularly assessed and comprehensive and timely information is provided in order that they may discharge their duties effectively. Directors have unrestricted access to all Company information, records and documents. All directors may seek the advice of the Company Secretary or other independent professional advice as necessary, at the Company’s expense.
In the execution of its duties, the Board is assisted by various committees to which specific responsibilities have been assigned. The committees operate in accordance with approved charters (these are available on request from the Company Secretary and are also available on the Company’s website) and report to the Board on their activities. An evaluation of the committees’ performance is done on an annual basis.
Audit and risk committeeMiX has combined the audit and risk committee into one committee. Members consist only of independent non-executive directors, one of whom is appointed Chairman. A quorum consists of the majority of members.
The Chairman of the Board is a member of the audit and risk committee and this dual role will be put forward to shareholders for approval at the upcoming annual general meeting.
Representatives from the outsourced internal audit function and the external auditors attend meetings. The Chairman of the social and ethics committee is also invited to attend meetings due to the close working relationship required between the two committees. The Group Financial Directors attends all meetings, with the Chief Executive Officer attending the meetings where the quarterly results are reviewed.
The committee meets at least six times a year, with two meetings focused on risk management.
Nominations and remuneration committeeFrom May 13, 2013 the committee has been chaired by R Frew. R Bruyns, who chaired the committee prior to R Frew, continues to chair all matters relating to the nomination and appointment of new directors. The nominations and remuneration committee includes two other non-executive directors as members. A quorum consists of the majority of the members. The Chief Executive Officer is invited to attend meetings.
The committee meets at least four times a year.
Social and ethics committeeThe social and ethics committee includes three non-executive directors, one alternate director and one Group executive as members. A quorum consists of the majority of members. The Chief Executive Officer and Group Financial Director are invited to attend meetings.
The committee meets at least three times a year. The duties and operation of the committee are reported back to shareholders at the annual general meeting.
Company secretaryThe company secretarial function is outsourced to Java Capital Trustees and Sponsors Proprietary Limited (“Java”), which provides an independent company secretarial service. The Board has considered the competence, qualifications and experience of the individual at Java who is responsible for the performance of all company secretarial duties to MiX and is satisfied that the individual, who is an attorney with more than nine years’ company secretarial experience, has the necessary qualifications and skills to undertake the role. Furthermore, the Board is satisfied that an arm’s-length relationship is maintained between the Company and Java through the provisions of the service agreement entered into between Java and Company which limits the duties of the Company Secretary to only those related to the corporate governance of the Company and the administration of company secretarial documentation.
Java provides the Board as a whole, and directors individually, with detailed guidance on discharging their responsibilities. Java ensures that proceedings and affairs of the Board are properly administered in accordance with pertinent laws and in compliance with the JSE Listings Requirements.
The audit and risk committee considers the facts and assumptions used in the assessment of the going concern status of the Group and the Company at the financial year-end so as to make a statement with regards to the preparation of the financial statements on the going concern basis. The Group’s annual forecast and three-year plan form the basis of the Board’s conclusion on the going concern principle.
The directors acknowledge that they are responsible for instituting internal control systems that provide reasonable assurance on safeguarding assets and preventing their unauthorized use or disposal, as well as maintenance of proper accounting records that give reasonable assurance on the reliability of financial information produced.
Internally, management, with the assistance of Ernst & Young, has reviewed the controls over financial reporting, including disclosure controls and procedures, and presented its findings to the audit and risk committee. Based on this review, nothing has come to the attention of the committee to indicate that significant internal financial controls have not operated as intended.
Internal AuditThe internal audit function is outsourced to Deloitte. The outsourced internal audit functions works closely with the Group Financial Director but reports to the audit and risk committee. The outsourced internal audit function has unrestricted access to the Chairman and members of the audit and risk committee. The audit plan for the Group is developed using a risk-based approach and is approved by the audit and risk committee.
Financial reportingMiX has a comprehensive system for reporting financial information to the Board. Each operation is responsible for preparing an annual forecast and three-year plan which are approved by the Board. Management accounts, which are submitted to the Board on a quarterly basis, are reviewed and compared to forecast with large variances explained. Quarterly forecasts are performed during the financial year and circulated to the Board.
Standard Group accounting policies are in place, with which all operations comply.
The Board takes overall responsibility for IT governance. This has not been delegated to the audit and risk committee nor has a separate Board committee been established. The responsibility for IT governance is a specific executive committee portfolio and is reported on at Board meetings.
Dealings in securities
Directors’ dealings in the Company’s shares are strictly controlled in terms of JSE regulations and US law including SEC rules. The Board charter, in compliance with the Financial Markets Act, JSE Listings Requirements and the SEC regulations, prohibits directors, officers and selected employees from dealing in the Company’s shares during designated periods preceding the announcement of the Group’s financial results and for two business days thereafter, any period while the Company is trading under a cautionary announcement and at any other time deemed necessary by the Board. Permitted dealings by directors are reported to the Chairman and Company Secretary and are published on SENS and a Form 6-K within 48 hours of the dealing.
An Insider Trading Policy, which addresses both the JSE and SEC regulations, has also been approved by the Board and communicated to all directors, officers and employees of the Group.
Compliance with laws and regulations
There has been nothing that has come to our attention where we have not complied with laws and regulations in the jurisdictions within which we operate. During the year under review, we have not paid any material fines for non-compliance with laws and regulations.
Business integrity and ethics
In support of the requirements of the King III recommendations, MiX has formalized its business ethics process. A formal Code of Ethics and Conduct has been adopted which is applicable to all directors and employees of the Group.
The Code provides, inter alia:
- Corrupt or illegal practices will not be tolerated.
- MiX will observe the laws of any country in which its business is transacted.
- All business transactions will be completely and properly recorded.
- Customers and their information will be treated with the utmost confidentiality.
- MiX does not participate in any illegal anti-competitive activity.
- MiX is non-political.
- MiX’s business dealings (including use of company assets) should be conducted at normal arm’s-length terms, in the interest of MiX.
- Business gifts and other offers of hospitality can only be accepted in compliance with the MiX Telematics Anti-Bribery and Corruption Policy and are recorded accordingly.
- MiX does not discriminate against any employee, third party, customer or member of the public on the grounds of race, color, gender, sexual orientation, age, religion or creed.
- MiX requires timeous dissemination of transparent, honest and accurate information both internally and to outside stakeholders and investors.
- MiX fosters a work ethic based on non-discrimination and opportunity for all.
- MiX will observe and comply with sound environmental practices.
Effective communication of the Code of Ethics and Conduct is an ongoing process.
The King Report on Corporate Governance in South Africa 2002 (King II) recommends that every Board should have a charter setting out its responsibilities.
Successful companies have moved from focusing exclusively on profitability to the triple bottom line approach, which encompasses economic, environmental and social aspects of the Company’s activities. The challenge is to balance economic efficiency and society’s broader objectives, taking into account conformance with governance principles and performance in an entrepreneurial market economy.
2. Role Of The Board
- The Board should determine the Company’s purpose, values and stakeholders relevant to its business and develop strategies combining all three elements. The Board should ensure that procedures are in place to monitor and evaluate the implementation of its strategies, policies, senior management performance criteria and business plans.
- The Board should establish and maintain the structure of the Company.
- The Board should review and approve the financial objectives, plans and actions, including significant capital allocations and expenditure.
- The Board should exercise leadership, integrity and judgement, based on fairness, accountability, responsibility and transparency.
- The Board must provide strategic direction to the Company, appoint the Chief Executive Officer and ensure that a succession plan is in place.
- The Board should ensure that the Company complies with all relevant laws, regulations and codes of best business practice, and that it communicates with its shareowners and relevant stakeholders (internal and external) openly and promptly and with substance prevailing over form.
- The Board should regularly review processes and procedures to ensure the effectiveness of the Company’s internal systems of control, so that its decision-making capability and the accuracy of its reporting are maintained at a high level at all times.
- The Board should define levels of materiality, reserving specific powers to itself and delegating other matters with the necessary written authority to management.
- The Board should have unrestricted access to all Company information, records, documents and property.
- The Board should develop a corporate Code of Conduct.
- The Board should have an agreed procedure whereby directors may, if necessary, take independent professional advice at the Company’s expense.
- The Board should consider whether or not its size, diversity and skills mix makes it effective.
- The Board must identify key risk areas and key performance indicators which should be regularly monitored, with particular attention given to technology and systems.
- The Board should identify and monitor the non-financial aspects relevant to the business of the Company.
- The Board should record the facts and assumptions on which it relies to conclude that the business will continue as a going concern in the financial year ahead or why it will not, and in that case, the steps the Board is taking.
- The Board must find the correct balance between conforming with governance constraints and performing in an entrepreneurial way.
- The Board shall establish sub-committees to facilitate efficient decision making. At a minimum, it shall establish an Audit Committee, Remuneration Committee and Executive Committee. The Board shall clearly define the parameters of ad hoc sub-committees.
- The Board should assess its own effectiveness in fulfilling these and other Board responsibilities.
3. Board Procedures
- The Chairperson should be an independent non-executive director.
- The position of Chief Executive Officer shall be separate from the Chairperson.
- The quorum for a Board meeting shall be determined by the Articles of Association.
- Directors shall endeavour to attend all Board meetings and prepare adequately. Directors who are unable to attend a meeting should advise the Chairperson or the Secretary at an earlier date.
- Directors are expected to participate fully, frankly and constructively in Board discussions and other activities and to bring the benefit of their experience, knowledge, skill and abilities to deliberations of the Board.
- All discussions and recordal thereof will remain confidential unless there is a specific directive from the Board to the contrary, or disclosure is required by law.
- The Board will usually hold quarterly meetings. However, additional meetings may be held at the request of the Chairperson or any one of the Directors, after discussion with the Chairperson. Directors may invite any person to attend specific meetings or parts of a meeting, with the prior approval of the Chairperson.
- Directors shall receive the Board agenda timeously to allow for sufficient preparation.
- The Board shall appoint a Secretary who will be responsible for convening meetings and record keeping.
- The effective functioning of the Board as a unit, and the contribution of individual directors, shall be reviewed periodically, but at least on an annual basis. The Chairman shall be instrumental in these periodic reviews and shall be entitled to obtain input/assistance in this regard from his fellow directors and/or external consultants and advisors.
4. Induction of New Directors
Newly appointed directors should have the benefit of an induction/orientation programme to familiarise them with the Company and the business environment and markets in which the Company operates as well as to introduce them to senior management of the company.
5. Directors’ Remuneration
- The Board will determine the level of remuneration for non-executive directors, and remuneration to be approved at the annual general meeting of shareholders if so required by the articles of the company.
- Executive directors will receive no fees but will be paid as employees of the Company in accordance with their contracts of employment with the Company.
6. Other Board Appointments
Directors are at liberty to accept other Board appointments so long as the appointment does not conflict with the business and does not detrimentally affect the Director’s performance as a director.
7. Directors’ and Officers’ Liability Insurance
The Company will ensure that an insurance policy is in place to indemnify the directors against any loss arising out of a claim for wrongful acts and for which the Company is permitted to grant indemnification to the directors.
AUDIT AND RISK COMMITTEE
Audit and Risk Committee Charter
The Committee, to be known as the Audit and Risk Committee (“Committee”), is established in order to assist the Board of Directors (“Board”) in discharging certain of its duties. The Board nevertheless remains primarily responsible for these duties (except per the Companies Act where the Audit and Risk Committee are responsible for the external auditor appointment and the independence thereof, approval of audit fees and approval of non-audit fees). The duties assigned to the Committee relate to internal control, financial reporting, external audit, internal audit, risk management and regulatory compliance.
The Committee is constituted as a statutory committee in terms of the Companies Act 71 of 2008 (“the Companies Act”) and does not perform any management functions or assume any management responsibilities. It provides a decision making forum relative to its duties and responsibilities as set out in section 94(7) of the Companies Actas well as a forum for discussing all other topics where reporting and making recommendations to the Board is necessary.
The membership, resources, responsibilities and authority of the Committee as stipulated in these terms of reference comply with the provisions of the Companies Act and the principles of the King Report on Governance for South Africa 2009 (“King III”). These terms are approved by the Board and may be reviewed and amended by the Board as and when required.
The Committee will carry out its function on behalf of the Company and all of its subsidiaries, associates and joint ventures.
The Committee, in carrying out its duties under these terms of reference, will give due regard to the principles of governance and best practice as contained in King III, the Companies Act and the Listings Requirements of the JSE Limited.
The Committee may obtain such external or internal professional advice and training as it considers necessary and the Company will incur the cost thereof .
2.1 The Committee members must be elected by shareholders at each annual general meeting and the Committee should comprise of at least three members who are independent non-executive directors.
2.2 The majority of the committee members should be financially literate and should preferably have skills and experience appropriate to the company’s business.
2.3 The Board shall appoint a chairperson from the members of the Committee and determine the period for which he shall hold office. The chairperson of the Board should not be appointed as chairperson of the Committee but may be a member of the Committee.
2.4 The Board shall have the power at any time to remove any members from the Committee and to fill any vacancies created by such removal.
2.5 The company secretary shall be the secretary of the Committee.
3. ROLES AND RESPONSIBILITIES
In accordance with section 94(7) of the Companies Act, the committee shall:
- nominate, for appointment as auditor of the company a registered auditor who, in the opinion of the audit committee, is independent of the company;
- determine the fees to be paid to the auditor and the auditors terms of engagement;
- ensure that the appointment of the auditor complies with the provisions of the Companies Act and any other legislation relating to the appointment of auditors;
- determine the nature and extent of any non-audit services that the auditor may provide to the group;
- pre-approve any proposed agreement with the auditor for the provision of non-audit services to the company;
- prepare a report, to be included in the annual financial statements for that financial year describing how the audit committee carried out its functions, stating whether the audit committee is satisfied that the auditor was independent of the company and commenting in any way the committee considers appropriate on the financial statements, the accounting practices and the internal financial control of the company;
- receive and deal appropriately with any concerns or complaints, whether from within or outside the company, or on its own initiative, relating to the accounting practices and internal audit of the company, the content or auditing of the company’s financial statements, the internal financial controls of the company; or any related matter;
- to make submissions to the board on any matter concerning the company’s accounting policies, financial control, records and reporting; and
- to perform such other oversight functions as may be determined by the board.
The Committee’s additional areas of focus shall cover:
- Internal Control
- Financial Reporting
- External Audit
- Internal Audit
- Risk Management
- Regulatory compliance – Code of Ethics and Conduct
3.2 Internal Control
The Committee will review the process governing internal control and the allocation of appropriate skills and resources to the implementation and maintenance of sound internal control systems.
The Committee will:
- Communicate the importance of a sound internal control culture to management.
- Develop an understanding of the internal control systems implemented by management. Internal control systems manuals should be developed by management and reviewed by the Committee. The Approvals Framework is an integral part of the internal control process.
- Understand the controls and processes implemented by management which ensure that the financial statements are derived from the underlying financial systems and are subject to appropriate management review.
- Evaluate the effectiveness of the internal control frameworks and review whether valid recommendations made by the external auditors have been implemented.
- Consider the adequacy of and security relating to the computer systems and evaluate the contingency plans in the event of systems breakdowns and disaster.
3.3 Financial Reporting
The Committee has an oversight responsibility for ensuring that accurate financial information is provided by the underlying accounting systems in order to serve management and shareholder financial reporting. The Committee will:
- Gain an understanding of the areas of greatest financial risk and how these are being managed and review any major implementation of new computerised systems.
- Review recent accounting, reporting and regulatory pronouncements and understand their impact on the Company’s financial reports.
- Oversee the financial reporting process and review the interim financial statements, annual financial statements, preliminary announcements and special documents prior to their release.
- Review with management and the external auditor the financial statements, the key accounting policies, practice and estimates, any changes to accounting policies and estimates and judgements, significant adjustments, unadjusted differences and any disagreements.
- Review all other sections of the annual report and interim announcements before release and consider whether the information is consistent.
- Ensure that all taxation and litigation matters have been discussed and dealt with appropriately in the annual financial statements
- Review the basis on which the Company has been determined a Going Concern, review the Capital Adequacy, Debt Facilities and compliance with any loan covenants.
- Review the Company’s statement on internal control prior to endorsement by the board.
- Report in the integrated report how the Committee carried out its functions.
- Review managements process for ensuring that information contained in analyst briefings and press reports is consistent with published financial information.
- Understand and review the monthly financial reporting processes which generate financial information to the Board and ensure that this has been derived from the underlying financial records and applies the accounting policies and practices applied by the Company in its annual reporting processes.
3.4 External audit
In accordance with the provisions of section 94(7) of the Companies Act, the Committee has a responsibility for processes relating to the appointment and independence of, and fees paid to, the external auditor and will review processes relating to the completion of the annual audit. The Committee will:
- comply with the provisions of the Companies Act with regard to the appointment of the auditors of the Company;
- Review with the external auditor, before the audit commences, the audit engagement letter, the terms, nature and scope of the audit, the procedure and engagement, the audit fee budget and the co-ordination procedures where more than one audit firm is involved.
- Discuss with the external auditor the appropriateness of the accounting policies and whether they are considered aggressive, balanced or conservative.
- Discuss any audit problems encountered during the course of the audit, including any restriction on the audit scope or access to information.
- Review the nature and timing of any reports and review with the external auditor and management all significant findings and recommendations. Valid recommendations are to be appropriately and timeously acted upon by management.
- Obtain feedback from the external auditor on the state of the accounting records, the state of balance sheet reconciliations, the general state of internal controls, any shortfall in internal controls, any unusual transactions, any contentious accounting treatments and adherence to the Company’s Approvals Framework as part of their reporting subsequent to completion of the audit of the annual financial statements.
- Determine the nature and extent of any non-audit services to be rendered by the external auditor and assess whether such services are likely to substantively impair their independence and ensure that any proposed contract is pre-approved.
- Ensure that the external auditor has access to the audit committee chairperson.
3.5 Internal audit
- Internal audit provides the Committee with insight, advice and assurances that systems and controls are in place and are functioning effectively. An effective internal audit function complements the external audit process and provides the Committee with an objective overview of the effectiveness and adequacy of the internal control systems and reporting, and the risk identification and risk management processes.
- In order to ensure the independence and effectiveness of internal audit, the Board has determined that internal audit reports directly to the Committee. The Committee is tasked with overseeing the effectiveness of the internal audit function and ensuring that the internal controls systems are designed in response to risks particular to the company.
- The Committee is responsible for:
- the appointment/dismissal and performance assessment of internal audit;
- Reviewing the objectives of the internal audit function;
- approving the internal audit plan on an annual basis;
- ensuring that the internal audit function is subject to an independent quality review, as and when the Committee determines it appropriate; and
- reviewing the internal audit reports and considering the conclusions and significant matters reported on by the internal audit.
3.6 Risk Management
The Committee will review processes to ensure that reliable and efficient risk management strategies, policies and risk insurance programmes are in place.
- Risk management commences with the identification of the key risks inherent to the business. Management has the task of identifying key risks.
- Appropriate risk management strategies, policies and procedures are to be developed for each of the key identified risks. These risk management strategies, policies and procedures should be communicated throughout the company with the overall aim of managing material risks. Management should develop and implement risk management strategies, policies and procedures throughout the Company.
- The Company should create well documented policy and procedure manuals for its businesses and operations. These manuals are to be circulated throughout the Company, are to be regularly updated (having regard to legislative changes) and are to cover all aspects of the business. These manuals should include (but should not be limited to):
- Investment related activities;
- Asset management activities;
- Funding and liquidity related activities;
- Commercial and operational related activities;
- Market, revenue and credit related activities;
- Expense related activities;
- Capital expenditure;
- Human resources.
- The Committee will review the adequacy of the risk insurance programme on an annual basis.
4. REPORTING AND ACCOUNTABILITY
The chairperson of the Committee shall account to the board for its activities and make recommendations to the board concerning all matters arising from the above responsibilities.
The chairperson (or, in his/her absence, an alternate member) of the Committee shall attend the Annual General Meeting to answer questions concerning matters falling within the ambit of the
Meetings of the Committee will be held as frequently as the Committee considers appropriate, but it will normally meet not less than four times a year. The annual programme of meetings is set out in Annexure A.
The board or any member thereof, any member of the Committee or the external auditors may request further meetings.
Reasonable notice of meetings and the business to be conducted shall be given to the members of the Committee and all attendees. An agenda and supporting documentation should be circulated to the members and attendees a reasonable period in advance of each meeting.
A quorum for any meeting will be two members.
Decisions of the Committee will require at least two votes in favour. No attendee shall have a vote at meetings of the Committee.
The chief executive officer, the chief financial officer and the external auditor shall attend meetings as required. The chairperson may invite other executives or attendees to attend and to be heard at meetings of the Committee.
The minutes of all meetings of the Committee shall be submitted to the Board at the immediate following board meeting. The chairperson of the Committee shall report to the Board following each Committee meeting.
The Committee may also convene “update meetings” with the chief financial officer, the purpose of which is to remain in touch with financial matters.
Unless varied by these terms of reference, meetings and proceedings of the Committee will be governed by the company’s memorandum of incorporation regulating the meetings and proceedings of directors and committees.
REMUNERATION COMMITTEE CHARTER
The Remuneration Committee (“Committee”) is established to assist the Board in discharging certain of its responsibilities. The Board nevertheless remains primarily responsible for these duties. The duties assigned to the Committee relate primarily to the incentive and remuneration programmes available to Mix executive directors, senior executives and employees, in particular:
- The long term share option incentive
- The short term bonus incentive
- The remuneration policy and annual increase cycle
- The trust programme established under the names Enterprise Trust and Fleet Trust for the benefit of qualifying employees.
The Committee does not perform any management functions or assume any management responsibilities. It provides a decision making forum relative to its duties and responsibilities. The Committee will carry out its functions on behalf of the Company and its subsidiaries.
These terms of reference are subject to all applicable company legislation, JSE legislation, King Code (in its various iterations) requirements and any other relevant legislation.
The Committee may obtain such external or internal professional advice and training as it considers necessary and the Company will incur the cost thereof.
The Board will perform a review of the effectiveness of the Committee annually.
The Committee will be appointed by the Board and should comprise three members who are non- executive directors, the majority of which should be independent.
The Committee members should have the skills and experience to fulfill their duties.
The Board shall appoint the chairman of the Committee and shall determine the period for which he shall hold office. The Board shall have the power at any time to remove any member from the committee and to fill any vacancy created by such a removal.
The Committee will have an independent role, operating as an overseer and a maker of recommendations to the Board for the Board’s consideration and final approval.
The role of the Committee is to ensure that:
- The Company remunerates directors, executives and employees fairly and responsibly
- The Company discloses the remuneration of directors accurately and transparently
- Approval of shareholders is obtained for non-executive remuneration
- Shareholders are appraised of the Companies remuneration policies, including the long term and short term incentive programmes
- Other remuneration and social responsibility factors are adequately dealt with.
4. Specific responsibilities
4.1 Long term incentives
The Committee will administer all aspects of the Mix Telematics Group Executive Incentive Scheme. This includes:
- Maintaining and updating the scheme rules.
- The award of options to executive directors and senior executives in terms of the scheme rules. The Chief Executive Officer (“CEO”) will present to the Committee on an annual basis (or on more frequent basis as required by the business needs of the Company) recommendations from management for share option awards. The Committee will review the recommendations and either amend or approve. The Committee will advise the CEO and the Chief Financial Officer (“CFO”) of the approved awards and all parameters relating to the awards in order that necessary SENS notices can be made.
- Full details of historic awards and any exercised awards, by participant, should be presented to the Committee at each meeting.
4.2 Short term incentives
The Committee should approve all short term incentive/bonus policies.
The Committee should approve the annual and half yearly bonus payments to all executive directors. The CEO is to present a schedule of these recommended bonus payments to the Committee for approval and ratification.
The CEO should also table all proposed bonus payments to the direct reports of the executive directors before they are paid for review by the Committee. Notwithstanding this requirement for a review, the CEO has the final approval for these direct reports bonus payments.
4.3 Annual increases
The Committee is to approve the annual salary increases granted to employees. For executive directors and their direct reports, details of current and proposed remuneration and increases are to be provided. For all other employees, the total salary bill, the average increase and the new salary bill information is to be provided. The CEO is to present a schedule of this salary information and these increase recommendations to the Committee for approval.
4.4 Employee trusts
The employee trusts are the Enterprise Employee Trust and the Fleet Services Employee Trust. Notwithstanding the fact that trustees administer the affairs of the trusts, the Committee is to be appraised of the participants of each trust and the collective annual benefits which the participants derive. The CEO and operating management are responsible for selecting beneficiaries and ensuring that the trustees are managing the trusts in accordance of the trust deeds.
4.5 Succession plans
The Committee is responsible for ensuring that the Company has a viable succession plan for the CEO, his direct reporting executive directors and each of their direct reports. Such
succession plans are to be in writing and should set out whether there is an identified successor(s) or whether a new employee would have to be found.
4.6 Non-executive director remuneration
Non-executive fees paid, and increases to be granted, are approved by shareholders by ordinary resolution at each annual general meeting. The Committee should recommend the increase to the Board for approval, prior to the notice of annual general meeting being finalised.
In addition to non-executive director’s fees, the Committee is responsible for developing a policy for travel, accommodation and car hire costs in order for non-executive directors to attend Board meetings. The approval of any such costs claimed should be done by the Chairman of the Remuneration Committee.
4.7 Disclosure of remuneration to shareholders
The Committee is to ensure that the minimum disclosure of remuneration paid to non- executive and executive directors is made. Minimum disclosure should be done in accordance with the relevant company and JSE legislation applicable at the time. Until such time as these terms of reference are amended, the Company will not disclose the remuneration of senior executives as required by King 3.
4.8 Disclosure of remuneration policies to shareholders
The Committee is required in terms of King 3 to communicate the remuneration policies to shareholders. This communication, which should be approved by the Committee, will be done in the Corporate Governance section of the annual report.
4.9 Social responsibility grants
The Committee should encourage participation in social development and upliftment. To this end the Company and the CEO should be encouraged to develop and report on corporate citizen policies and programmes and to report to the Committee on the implementation of such programmes.
4.10 Updating remuneration policies
The Committee has a responsibility to review the implementation of all remuneration policies and to ensure that these promote the achievement of the Company’s and Group’s strategic objectives, encourage individual performance and retain key personnel.
5. Meetings and Attendance
The Committee shall hold at least two meetings per year (preferably four meetings per year at every board meeting cycle) but additional meetings shall be held if required. At two of the meetings, the following should be discussed:
- In June; to approve any share option awards, any second-half short-term bonus payments, salary increases for implementation on 1 July, non-executive director fee increases and disclosure of remuneration to shareholders.
- In November; to approve any 1st half short term bonus payments, any interim salary increases to executives and their direct reports, a status report on the employee trusts, succession plans and social responsibility activity.
- At the other meetings, discussions should cover succession plans, performance reviews of the executives and key staff and staffing issues.
- These meetings will also be available for ad hoc salary reviews, bonuses payments etc.
The CEO and CFO, or any other person as required by the Committee, may be in attendance at the meetings as invitees but will not be eligible to vote.
A quorum for the meeting shall be two members, one of whom should be an independent director.
An agenda will be prepared for each meeting and distributed, together with all supporting documentation, to the members sufficiently in advance of the meeting for members to prepare adequately.
Minutes of each meeting shall be prepared as soon as possible after the meeting. The minutes should be approved at the next scheduled meeting. Copies of the minutes should be presented to the Board for information at the next scheduled Board meeting.
6. Approval of these terms of reference.
These terms of reference were approved by the Board on 2 September 2010 and such approval will be renewed annually.
SOCIAL AND ETHICS COMMITTEE
Social and Ethics Committee Charter
1.1 The Social and Ethics Committee (the Committee) is, in terms of the Companies Act 71 of 2008 (Companies Act”), constituted as a committee of the Board of Directors (the Board) of MiX Telematics Limited (the Company or the Group).
1.2 The duties and responsibilities of the members of the Committee are in addition to those as members of the Board or as prescribed officers of the company.
1.3 These terms of reference, which comply with the Companies Act, are subject to approval and periodic review by the Board.
2.1 The Committee shall be appointed by the Board and shall consist of no fewer than three members who are directors or prescribed officers of the company. At least one of the members must be a director who is not involved in the day-to-day management of the company's business, and must not have been so involved within the previous three financial years.
2.2 The Board shall appoint the Committee chairperson and determine the period for which he or she shall hold office.
2.3 The membership of the Committee and its chairmanship will be subject to annual review by the Board.
2.4 The members of the Committee as a whole must have sufficient qualifications and experience to fulfil their duties.
2.5 The Committee shall nominate a committee secretary.
The role of the Committee is to assist the Board in meeting its obligations in terms of the Companies Act, for both the Company and its subsidiaries.
It must be specifically noted that the Audit and Risk Committee deals with Fraud. Further, the Audit Committee deals with Risk and Sustainability. These matters will continue to be dealt with by the Audit Committee, which will report to the Committee on these matters. As there may be areas of overlap between the functions of the Audit and Risk Committee and the Social and Ethics Committee, the chairman of the Social and Ethics Committee will be invited to all Audit Committee meetings and the Group Financial Director will have a standing invitation to all Social and Ethics Committee meetings.
The Committee’s task as defined by the Companies Act is to “monitor” and not to “perform”. It will perform its work for the Group, which includes the Company and all its subsidiary companies. In order to meet its monitoring obligations, the Committee will develop work plans and questionnaires. The questionnaires will be completed on an annual basis by the group’s operating subsidiary management teams. These questionnaires will form the basis of the report back by the Committee to the Board and the shareholders. In addition specific information may be requested from the relevant Company officials.
The Committee has the following rights and responsibilities:
4.1 Require from any director or officer or employee of the company any information or explanation necessary for the performance of the committee’s functions.
4.2 Require any other committee of the company, currently tasked with managing tasks which fall within the Committee’s mandate i.e. Governance, Human Resources, Transformation, Social Responsibility, Environmental, Sustainability etc. to provide reports to the Committee on such matters. Where necessary, there will be a liaison with the Audit Committee on matters of Sustainability as these relate to risk identification.
4.3 Report in the Company’s annual Integrated Report on the matters within its mandate.
4.4 Incur reasonable expenditure in the performance of its functions including, if appropriate, the costs of any consultant or specialist engaged, and the company must pay such expenditure.
4.5 Receive all notices and communications relating to any general shareholders meeting and to be heard at any general shareholders meeting on matters within its mandate.
4.6 Report to the shareholders at the company’s annual general meeting on matters within its mandate.
5.1 Meetings of the Committee will be held as the Committee deems to be appropriate. However the Committee should meet at least three times per year.
5.2 The notice of each meeting of the Committee, confirming the venue, time and date and enclosing an agenda shall be forwarded to each member of the Committee prior to the meeting.
5.3 The quorum for decisions of the Committee shall a majority of current members.
5.4 The Committee shall invite the CEO and CFO (if he or she is not a member of the Committee) and whenever is necessary any other company official to attend meetings.
5.5 The Chairperson (or in his / her absence, an alternative member) of the Committee shall attend the annual general meeting to report to stakeholders.
6.1 The Committee must establish an annual work plan for each year to ensure that all relevant matters are covered by the agendas of the meetings planned for the year.
6.2 The annual plan must ensure adequate coverage of the matters laid out in these terms of reference: the more critical matters will be dealt with annually while other matters will be dealt with on a rotational basis.
6.3 The Committee secretary shall take minutes of meetings.
6.4 The minutes must be formally approved by the Chairman at the next scheduled meeting and circulated to members of the Committee and to the Board.
Having regard to the functions performed by the members of the Committee in addition to their normal functions, members of the Committee may be paid such additional remuneration as determined by the board.
These terms of reference were approved the Committee and were approved by the Board on 8 March 2012 board meeting and revised on 4 June 2013.