Integrated Annual Report 2014

The style. The passion
menu

Underpinning the Group's mission to be a sustainable, ascendant organisation are our key disciplines which centre on best practice benchmarks and controls across the business and our belief in fairness, integrity and transparency in all business dealings.

Corporate governance

Overview

Italtile is committed to applying, in all material respects, the principles contained in the King Report on Governance for South Africa, 2009 (King III), which became effective on 1 March 2010, as well as the additional requirements for good corporate governance stipulated in the JSE SRI index.

King III

The JSE Listings Requirements require all JSE-listed companies to provide a narrative of how they have applied the recommendations contained in King III, in respect of financial years commencing on or after the effective date.

During the year, the Group continued to advance its progress made in respect of applying the King III Code and the principles of integrated reporting. Ongoing measurement and reviews were conducted comparing the Group's governance practices with those recommended in King III, in order to ensure continued improvements were made related to complying with the implications of King III.

Overall application and compliance with King III

Italtile accepts the obligation to apply the practices prescribed by King III and has resolved as a business philosophy to adopt and pursue the same. It therefore strives to meet those objectives in accordance with the content of the table below.

During 2013, the Group subscribed to the Institute of Directors Governance Assessment Instrument (IoDSA GAI). The following report on the application of King III is extracted from that tool, and the full report on all 75 principles of King III is included on the Italtile website www.italtile.com.

Principle   Principle description   Applied/  
Partially applied/  
Not applied  
IoDSA  
GAI
score  
Evidence   Explanation/
Compensating  
practices  
Principle 2.1   The Board acts as the focal point for and custodian of corporate governance   Applied   AAA   Board Charter    
Principle 2.2   The Board appreciates that the strategy, risk, performance and sustainability
are inseparable  
Applied   AAA     Managed as part of the mandate to the Audit and Risk Committee  
Principle 2.3   The Board provides effective leadership based on ethical foundation   Applied   AAA     Managed as part of the mandate to the Social and Ethics Committee  
Principle 2.4   The Board ensures that the company is and is seen to be a responsible corporate citizen   Applied   AAA     Managed as part of the mandate to the Social and Ethics Committee  
Principle 2.5   The Board ensures that the company ethics are managed effectively   Applied   AAA     Managed as part of the mandate to the Social and Ethics Committee  
Principle 2.6   Chapter 3: Audit Committees   Applied   AAA     Please refer to the Audit and Risk Committee report  
Principle 2.7   Chapter 4: The governance of risk   Applied   AAA     Please refer to the Audit and Risk Committee report  
Principle 2.8   Chapter 5: The governance of information technology   Applied   AAA     Please refer to the Audit and Risk Committee report  
Principle 2.9   Chapter 6: Compliance with laws, rules, codes and standards   Applied   AAA     Please refer to the Audit and Risk Committee report  
Principle 2.10   Chapter 7: Internal audit   Applied   AAA     Please refer to the Audit and Risk Committee report  
Principle 2.11   Chapter 8: Governing stakeholder relationships   Applied   AAA   Board Charter    
Principle 2.12   Chapter 9: Integrated reporting and disclosure   Applied   AAA     Reporting is in line with the JSE Listings Requirements  
Principle 2.13   Chapter 7 and 9: The Board reports on the effectiveness of the Company's internal controls   Applied   AAA     Please refer to the Audit and Risk Committee report  
Principle 2.14   The Board and its directors act in the best interests of the Company   Applied   AAA      
Principle 2.15   The Board will/has consider/ed business rescue proceedings or other turnaround mechanisms as soon as the Company has been/may be financially distressed as defined in the Companies Act, 71 of 2008   Applied   AAA      
Principle 2.16   The Board has elected a chairman of the board who is an independent non-executive director. The CEO of the Company does not also fulfil the role of chairman of the Board   Applied   AAA     Mr Ravazzotti has returned to the position of Chairman of the Company with effect from 1 July 2014. The Company has a lead independent director in place, and Brand Pretorius, who acted as Chairman for the 2014 financial year, remains on the Board as an independent non-executive director  
Principle 2.17   The Board has appointed the Chief Executive Officer and has established a framework for the delegation of authority   Applied   AAA     Mr Booth joined the Company as Chief Executive Officer on 1 July 2014  
Principle 2.18   The Board comprises a balance of power, with a majority of non-executive directors. The majority of non-executive directors are independent   Applied   AAA      
Principle 2.19   Directors are appointed through a formal process   Applied   AAA      
Principle 2.20   The induction of and ongoing training, as well as the development of directors are conducted through a formal process   Applied   AAA      
Principle 2.21   The Board is assisted by a competent, suitably qualified and experienced Company Secretary   Applied   AAA     Please refer to the Governance report  
Principle 2.22   The evaluation of the Board, its committees and inidual directors is performed every year   Applied   AAA      
Principle 2.23   The Board delegates certain functions to well-structured committees without abdicating from its own responsibilities   Applied   AAA      
Principle 2.24   A governance framework has been agreed upon between the Group and its subsidiary boards   Applied   AAA      
Principle 2.25   The Company remunerates its directors and executives fairly   Applied   AAA      
Principle 2.26   The Company has disclosed the remuneration of each inidual director and prescribed officer   Applied   AAA     Please refer to the Directors' report  
Principle 2.27   The shareholders have approved the Company's remuneration policy   Applied   AAA