CORPORATE GOVERNANCE

The board of directors endorses the Code of Corporate Practices and Conduct recommended in the King Report. The board recognises that corporate governance is a developing process. Accordingly it reviews the degree of compliance with the Code on an ongoing basis and implements procedures to ensure further compliance where appropriate.

Directorate
The board comprises a non-executive chairman, an executive deputy chairman, a chief executive, five executive directors and two non-executive directors. It meets periodically together with senior management to examine the results of the group, to ensure that the delegated responsibilities are duly executed by management, and to consider important issues.

Human Resources
The group is an equal opportunity employer and there is no discrimination on any grounds. The group supports the principles and objectives contained in the Employment Equity Act. Existing policies, structures and procedures are reviewed periodically to ensure compliance within the time limits prescribed by the Act.

Ethics and Communication
The board strives to ensure that the group conducts its business with the utmost integrity towards all its stakeholders, including its shareholders, employees, customers, suppliers and society at large. The group supports a policy of open communication with all stakeholders on both financial and non-financial matters.

Going Concern
The company has sufficient resources to continue in operational existence for the year ahead. Accordingly, the directors have adopted the going concern basis in preparing the annual financial statements.

Audit Committee
Rebhold has an independent audit committee. It has terms of reference which clearly set out its scope and objectives. The chairman of this committee is a non-executive director. The external auditors have unrestricted access to this committee. The audit committee reviews the effectiveness of internal controls in the group with reference to the findings of the internal and external auditors.

Other areas covered include the review of important accounting issues, specific disclosures in the financial statements and a review of major audit recommendations.

Remuneration Committee
The remuneration committee comprises one non-executive director ( who serves as its chairman) and two executive directors. The committee is responsible for determining the conditions of employment and remuneration packages, including the allocation of shares and options in terms of the share incentive scheme, for executive directors and senior executives.

Management Reporting
There are comprehensive management reporting disciplines in place which include the preparation of annual budgets by all operating divisions. Individual operational budgets are approved by the boards of directors of the relevant companies. The group budget is reviewed by the Rebhold board of directors. Monthly results are reported against budgets. Budgets and profit projections are reviewed and updated regularly during the financial year. Working capital and cash flow management are monitored on an ongoing basis.

Internal Audit
The group has established internal audit departments in certain divisions. These functions are performed by appropriately qualified and experienced personnel. In divisions where no internal audit department exists, the external auditors or other independent specialists are engaged to review and report on systems of internal controls.

Year 2000 Compliance
The board has taken consideration of the risk posed to business by computer systems in the new millennium. An in depth year 2000 internal audit has been undertaken for all group companies, the purpose of which was to ascertain the exposure of the group and the adequacy of steps taken to address these exposures. The group has taken all steps considered necessary to achieve acceptable levels of year 2000 compliance throughout all its business operations. This has progressed according to plan and on budget, and the board is satisfied that the group's internal systems have been thoroughly tested, with the test results indicating that these systems are substantially year 2000 compliant. In addition, major suppliers and business partners of the group have been approached to endeavour to ensure that they will be year 2000 compliant prior to the advent of the year 2000.

Statement of compliance by the company secretary
The company has lodged with the Registrar of Companies all such returns as are required of a public company in terms of the Companies Act 61 of 1973, and all such returns are true, correct and up to date.

For: Rebhold Management Services (Proprietary) Limited

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