Transcript of "Imara Holdings Limited 2012 annual report"
The name Imara means ‘strong’ in Swahili, the language spoken bymore than 130 million people living and working across Africa.We chose this name for our company because it reflects ourAfrican roots as well as the stability, persistence and endurance ofour approach to wealth management. These qualities are proudlyreflected in our company motto: ‘strong in name, resolute bynature’.As an investment banking group with a uniquely African heritage,Imara has adopted a remarkable and typically African creature forour emblem. The scarab is small yet highly industrious.Capable of carrying more than 800 times its body weight, it is oneof the world’s strongest animals. It also plays an important rolein maintaining a healthy and thriving ecosystem by improving soilfertility and forage growth.Like the scarab, Imara accelerates the prosperity of the continentby offering a full range of financial products and solutions forinstitutional, corporate and high net worth clients investing in Africa.
CONTENTSVision, Purpose and Core Values 1Group Profile 5Directorate and Group Management 6Imara’s Corporate Social Investment Initiative 7Imara Lightwarriors 11International Footprint And Regional Offices 17Divisional Structure 18Group Organisational Structure 19Chairman’s Statement 23Chief Executive Officer’s Review of Operations 27Corporate Governance Report 31Glossary 41Five-Year Financial Highlights and Ratios 43Graphical Five-Year Financial Highlights and Ratios 45Independent Auditor’s Report 50Consolidated Statement of Comprehensive Income 51Consolidated Statement of Financial Position 53Consolidated Statement of Cash Flows 54Consolidated Statement of Changes In Equity 55Notes to the Consolidated Financial Statements 58Shareholder Information at 30 April 2012 117Notice of Annual General Meeting 119Form of Proxy 122
VISION, PURPOSE AND CORE VALUES VISION “A Successful Africa.” We are Africans, confident in the future of Africa. We view Africa as the continent of opportunity and are passionate about its potential. We believe that Africa’s influence will grow as its economies continue to develop. We understand African markets and know how to harness their unique investment opportunities. PURPOSE “To Accelerate the Prosperity of Africa.” We believe the key to unlocking Africa’s success is through economic growth and prosperity. As a leading investment banking group, we facilitate growth by offering a full range of financial products and solutions for institutional, corporate and high net worth clients investing in Africa.PAGE | 1
CORE VALUESIntegrityWe are honest, ethical and transparent in our dealings with clients, our investors and witheach other.We demonstrate genuine structural integrity being unified in operation, sound inconstruction and robust in our management of risk and compliance.KnowledgeOver 50 years of operation in Africa has equipped us with an unrivalled reserve ofexpertise and experience. This wealth of understanding enables us to advise and investmore astutely than our competitors.Our clients benefit from our in-depth research.We are uniquely qualified to develop African solutions for Africa.DisciplineDiscipline governs the processes through which we control and conduct business;it transforms our knowledge and competence into results.We focus our efforts through efficient and reliable systems.We promote a culture of ownership and accountability.EnterpriseWe believe enterprise is the combination of initiative and resourcefulness that fuelseconomic development.We encourage African entrepreneurship to create prosperity in Africa.We develop dynamic and innovative investment solutions.ResolutenessWe believe resoluteness is the quality of being purposeful, determined and unwavering.To be resolute is to be focused and committed, both attributes to which we aspire.Our own strong character helps us to fulfil our purpose and concentrate on achievingour goals.PAGE | 2
The Okavango River by Athol MoultA Blue Line Through TimeImara’s third series of exclusive artworks tells another authentically African story, in keeping with the “Investing in Africa” theme. This year’ssix-piece instalment for the Imara Collection also utilised the photo-creative energies of Imara Lightwarrior, Teddy Sambu. It is an artisticportal into the diverse and monumental eco-system that is the Okavango Delta. Through time immemorial the Okavango’s blue waters havesupported a complex array of life-forms on a massive scale. Sustainability is key in the context of a word-class landmark with a small yetdynamic human ecology. In modern day Botswana, where the delta is part of the country’s economic life-blood, it has become essential tobalance industry with sensitivity to living resources.Elephants Crossing the Boro RiverPrecious water floods the grassland in an annual cycle that nurtures livestock and acts as a biological magnet for a rich concentration of biggame. Elephants, lions, leopards, hippos and buffalo live out their days in and around the region. These creatures in turn prove irresistibleto the 200,000 tourists who make the pilgrimage to the Okavango Delta’s safari reserves each year. The truly fortunate may even glimpse theBlack Rhino, a species considered extinct as of 1992, but successfully re-released in 2003 under the auspices of The Department of Wildlifeand Botswana Defence Force.
GROUP PROFILEGeneral InformationCountry of incorporation BotswanaPrincipal activities Holding company for a Pan-African Financial Services GroupCompany registration number CO - 2002/3377Tax registration number CO - 65018-0101-9Registered office Union Provident Trust First Floor, Times Square Plot 134, Independance Avenue, Gaborone, Botswana P.O. Box 46699, Village, GaboroneRegistration status: Registered in the Botswana International Financial Services Centre (IFSC) tax Certificate Number 22 - Effective date 28 July 2003Independent auditors Ernst & YoungBankers Barclays Bank of Botswana Barclays Bank of Mauritius Close Guernsey Limited First National Bank Limited (Botswana) First National Bank Limited (South Africa) Standard Bank Limited (Mauritius)Botswana Stock Exchange code IMARAReuters code IMRA.BTTransfer secretaries Corpserve Botswana First Floor, Unit 3, Block A, Plot 117 Millennium Office Park, Kgale Hill, Gaborone Telephone: +267 393 2244, Facsimile: +267 393 2243 Email: firstname.lastname@example.orgBusiness addresses & contact details Botswana Second Floor, Block A, Plot 117 Millennium Office Park, Kgale Hill, Gaborone Telephone: +267 318 8708, Facsimile: +267 319 1767 Website: www.imara.co South Africa Imara House, Block 3 257 Oxford Road, Illovo 2146, Johannesburg Telephone: +27 11 550 6100, Facsimile: +27 11 550 6110PAGE | 5
DIRECTORATE AND GROUP MANAGEMENTDirectorateImara Holdings Limited SM Ndoro Chairman Zimbabwe Non-executiveMJS Tunmer Chief Executive Zimbabwe ExecutiveAR Fleming United Kingdom Non-executiveGE Johns Botswana Non-executive JR Legat United Kingdom ExecutiveACH Mackeurtan South Africa ExecutiveRH Macleod * South Africa ExecutiveTJ Matsau South Africa Non-executive GZ Steffens German Non-executive DE Stone South African Executive*Subject to Non Bank Financial institutions Regulatory Authority (”NBFIRA”) formal approval.Company SecretaryDE StoneAudit CommitteeGZ Steffens Chairman Non-executive GE Johns Non-executive TJ Matsau Non-executive SM Ndoro By invitation Non-executiveDE Stone By invitation ExecutiveRemuneration CommitteeGE Johns Chairman Non-executive TJ Matsau Non-executive SM Ndoro Non-executiveMJS Tunmer By invitation ExecutiveACH Mackeurtan By invitation ExecutiveNominations CommitteeSM Ndoro Chairman Non-executiveGE Johns Non-executive ACH Mackeurtan ExecutiveMJS Tunmer ExecutiveManagementMJS Tunmer Chief Executive OfficerDE Stone Chief Financial OfficerJR Legat Head of Asset ManagementRH Macleod Head of Corporate FinanceMJS Tunmer Head of StockbrokingPAGE | 6
IMARA’S CORPORATE SOCIAL INVESTMENT INITIATIVEEducation - a growing market identified as candidates for the CSI programme and become known as Imara Lightwarriors. TheImara believes that Africa’s global influence Imara Trust has as one of its key objectives thewill increase as its countries’ economies provision of educational assistance to personscontinue to develop. If African education is an from previously disadvantaged backgroundsinvestment for the future and fundamental to and from African countries where Imara has anthe skills development of a population where operational presence.some 40% of its people are under the age of20, then access to top quality higher education Learning valueis key. State delivery of high quality educationin South Africa has come under intense scrutiny Imara’s first Lightwarrior is Teddy Sambu,recently in the press. The need to appease a 24-year Xhosa man from the townshipspecial interest groups and a lack of political will of Khayelitsha. Teddy is currently on aare cited amongst many barriers to foreseeable photographic bursary and his work featuresreform undertaken from within the public sector. in some of the artworks commissioned as partConsumption of education tends towards the of this year’s Imara Collection, which appeargeographically specific and providers are too in the pages of this Annual Report. Theseoften protected from market competition. At its artworks are the product of this year’s Imaraworst, the public education market is one where Lightwarrior fieldtrip to the Okavango Delta ininferior products are forced on a ‘buyer’ with Botswana and comprise the third instalment oflittle choice. There is much consensus within Imara’s burgeoning independent art collection.the African journalistic and business community Since the beginning of 2012 Teddy has beenthat visionary educational solutions (ones that successfully honing and developing his field-can ultimately enforce new market standards) specific technical, creative, narrative andare driven from involvement by the private business skills at the Cape Town School ofsector. Photography, in the first year of his Diploma. There are four components in the first year ofThe focus of the Imara’s Corporate Social his course of study – practical photography,Initiate (CSI) is educational. Through its bursury darkroom process and print work, digitalscheme administered under the umbrella of (which includes software associated with digitalthe Imara South Africa Trust (Imara Trust), image making, management and manipulation)Imara links with high potential candidates and creative photography. The creativefrom economically disadvantaged African component cultivates visual literacy andcommunities. Candidates possessing the historical awareness with a view to the studentqualities of innate talent and entrepreneurial being able to generate ideas and conceptualisedrive, who cannot develop professionally when telling a photographic story in the contextbecause their academic backgrounds deny of Africa.them the competitive edge ordinarily providedby quality educational service providers, are Teddy was intimidated at first by the qualityPAGE | 7
of the student work on display. The largely documentary style photo-reportage to raiseprivileged and English speaking backgrounds of social awareness is just one career option –the other students were another barrier to be an internship at an outlet like Media 24 is alsoovercome. During an ice-breaker on the first a possibility.day, the other students were taken aback byTeddy’s open and unsentimental recount of the For Teddy, the opportunity he has beendefining photograph that had decided him on afforded via his bursary is not purely forbecoming a photographer – the one remaining professional betterment. Teddy is keenly awareimage of his late mother. According to the of his roots, and as an Imara Lightwarrior he hasprincipal, Teddy’s very presence at the school been active as a role-model for other aspiringmakes the other students far more aware of photographers in Khaylietsha. He shares thetheir own privilege and has expanded the sense skills and knowledge he gains at the Cape Townof how each of them fits within the context of School of Photography with other aspirantAfrica. Inspired by Teddy, some have gone on photographers in the 44Black photographyfield trips to Khaylietsha and photographed project there. Teddy has also offered thethere. The work that is then produced back at support of his photographic services to Imizamothe school offers a powerful and different view Emihle Soup Kitchen (set up in 2009 by Mavisof township life – a home as opposed to a place Makhangela in Tsepetsepe, Site B), which feedsof charity. starving people and orphans.Events like this illustrate the points of The Imara Lightwarriors: Performanceconnection with African communities that are Indicatorsmade possible via bursaries, and their flow isbi-directional. Teddy himself has commented The commercial dimension of Teddy’son the wholehearted support offered to him journey as an Imara Lightwarrior needsby the white students he has befriended. He special consideration. When Imara backssays they have helped bring his ideas to fruition entrepreneurs like Teddy Sambu, it is with a viewthrough suggesting, directing or offering photo- to creating prosperity in Africa at the micro-technical, computer-related, or language level. Imara has defined enterprise as therelated assistance. Teddy contrasts this with combination of initiative and resourcefulnessthe environment in the township where he that fuels economic development. Prior to beingruns his start-up photo business, Khanye Photo identified as a candidate for a bursary, Teddy,Productions, a place of limited resources which driven by passion and an instinct for survival,means that ideas are often jealously guarded. carved his own humble niche in Africa’s capitalTeddy’s place at the school has also exposed market and founded a one-man business. Withhim to the broader professional context of the no formal training, it was self-belief and sweat-photographic industry; an excursion to the equity alone that enabled Teddy to launch hisWorld Press Awards sharpened his bent for fledgling operation two years ago. Since thenphoto-journalism. At this stage in his studies, the professional experience, technical supportPAGE | 8
IMARA’S CORPORATE SOCIAL INVESTMENT INITIATIVEand formal training that he has been afforded Town and Khayelitsha have served Imara wellthrough his bursary and mentoring programme, as proving grounds for an authentic approachhas to some extent, levelled the playing field. to Corporate Social Responsibility. This approach is visibly sustainable in the sense thatTeddy has more than tripled his income at the fruits of the candidate’s development haveKhanye Photo Productions in the last year, downstream (social) benefits, and upstreamwhich has enabled him to hire fellow members (economic) advantages. The latter have theof his community to assist with the running potential to add value to the Imara Trust itselfof his business while he is studying on a full (fungible artworks) while simultaneouslytime basis. Aside from his crucial role on the maximising the potential for the candidateImara Lightwarriors field trip to the Okavango to be economically empowered (corporateDelta, he has scored some other high profile contracts). Teddy’s second year of study at thecorporate contracts. For example, Teddy has Cape Town School of Photography will includetaken on a commission from the publishers of subjects such as Professional Practice, whichPlatter’s Guide to SA wines, Philip van Zyand, involves looking at the business aspects ofto photograph 11 portraits for it’s 2013 edition. being a professional photographer – businessThe Imara Lightwarriors Project will be profiled plans, branding, website development and thein this guide, and Platter’s website will feature use of social networking for self-promotion.pictures of Teddy photographing the portraits. This industry related skills bridge is providedFor professional exposure to highlight Teddy’s with the express purpose of guiding graduatesphotographic creativity, the Imara Group has into gainful industry related employment.invited Teddy to exhibit selections from hisever-expanding photo-library at the opening of However, while aspects of Teddy’s upwardImara’s new offices in Gaborone in early 2013. trajectory under the bursary programme areIt is also planned that a selection of Teddy’s rich and rewarding, Imara is conscious of twowork will be displayed at an exhibition in things going forward. Firstly, Corporate SocialJohannesburg in 2013. Proceeds from the sales Initiatives (CSIs) are only truly sustainable whenof Teddy’s work will be invested back into the investment in community upliftment projectsImara Trust, to provide funding for future Imara bears the fruits of long-term empowermentLightwarriors. over a broad range of beneficiation. This means providing education for a larger number ofImara’s CSI future reshaped for broader Imara Lightwarriors. Thus, it has been resolvedbeneficiation that the number of beneficiaries should be increased under an alternative CSI structureThe Imara Lightwarriors vision to date, has with a broader beneficiation. New initiatives arecalled for an integrated package of assistance currently under consideration but no decisionscovering education, on-the-job training, small have yet been taken.business development and photographiccommissions for one worthy beneficiary. Cape Secondly, the nomination of a candidate fromPAGE | 9
another key African country where Imara hasa presence was felt to be important. Imara isa Botswana based group, so the choice of a To conclude, CSI’s with an educational focus willMotswana as our second Imara Lightwarrior continue to be Imara’s authentic contribution towas rightly prioritised. We are, therefore, Corporate Social Responsibility. The challengepleased to announce a commitment to a is going to be to drive CSI initiatives with ansecond bursary to be awarded to a young increasingly broad educational beneficiation.Motswanan woman – Leticia Makhura. As with With this goal in mind, the focus from thisTeddy, the confirmation of Leticia’s credentials point forward will be towards more broadlyas a candidate have been key. In her early based educational initiatives and to establishtwenties, well-spoken, confident, intelligent more links with educational businesses in theand outgoing, Leticia was born, raised and private sector. As Paul Berkowitz has reported,schooled in Botswana. She currently has entrepreneurs making intelligent use ofpart-time employment as an apprentice at advancements in technology may be the key toToby Jermyn’s company, Pangolin Photo closing the educational opportunity gap acrossSafaris. Leticia also participated as a member Africa. Berkowitz explains that the increasingof the recent Lightwarrior expedition into affordability of bandwidth and smartphones,the Okavango Delta. During this time, she together with greater sophistication inimproved her proficiency with a camera and educational content-generating platforms hascame to understand how powerful a tool it paved the way for a new market in education.can be in the hands of a local narrator who Open-source teaching resources allow youngunderstands Botswana’s unique culture and entrepreneurs to innovate with respect to theheritage. way subject content is provided. In conjunction with efficient and effective training methods andLeticia’s professional aspirations are, learner support systems, new providers arehowever, more aligned with her innate gifts as emerging to pick up the educational slack.a communicator with a keen awareness of thesociological and ecological environment in Through such initiatives more Africans may bewhich she was raised. Leticia has articulated granted the opportunity warranted by theirthat in tourism, which comprises 10% of inbuilt tenacity, talent and drive for the future.Botswana’s GDP, Batswana are still largelyemployed in positions supporting foreignoperators and guides. Her goal is to reversethis trend and ultimately to become an operatorherself. As an Imara Lightwarrior, Leticia willstudy Tourism at the University of Botswanain 2013. The fulfilment of such an aspiration ispursuant with the promotion of tourism in herhome country.PAGE | 10
Teddy Sambu: Imara Lightwarrior An authentic CSR Initiative of Imara Holdings Teddy Sambu has taken two important trips in his life. The first was from his village in the Eastern Cape six years ago where as an 18-year-old matriculant he was sent off to Cape Town, not so much to make his fortune as to carve a professional niche just deep enough to send money back home. The second is an eight- day photographic odyssey through the Okavango Delta with his two chief mentors and a film crew on behalf Teddy’s bursar, the Imara Group. As the first Imara Lightwarrior the pressure was on for this 24-year old. The aim of the Imara Lightwarriors fieldtrip was to source authentic material for the burgeoning Imara Collection. Teddy would make use of all the skills he had learned through his own start-up business, the Khanya Photo Production, and his first year Diploma studies at the Cape Town School of Photography, also courtesy of the Imara Group.PAGE | 11
The mission of the fieldtrip was to travel the length of the Okavango Delta, from the frontier town of Maun in the south to the panhandle in the far north. The crew would navigate three rivers and Teddy was expected to capture the story of these rivers as the lifeblood of the region – the source of survival for the animals and people that have settled on the banks. Throughout the trip Teddy’s eyes were alive with the presence of elephant, crocodile, hippo and otherPAGE | 12
“ “ Teddy found himself scraping an existence against the grain of unemployment in the streets of Khayelitsha. African beasts in the context of this world famous oasis expanse. That kind of new sensory input could be overwhelming, but Teddy used his experience to channel his energy into steady focus and observation. While he worked he smiled or hummed a traditional song, his whole body hunched over the camera, eye to the viewfinder.PAGE | 13
As the journey continued Teddy offered the frenetic professionals surrounding him a gentle lesson in presence and equipoise as he calmly shot the image of subjects such as a woman who weaves baskets for a living. It was as though time simply evaporated as the group travelled through the Delta. Their daily routine included navigating narrow papyrus channels, slowing to view a crocodile, stopping to photograph a fish eagle, making way for a wading bull elephant, marveling at the sunset, setting up camp, breaking camp and beginning again. The days seemed to blend together as the trip continued but complacency is the working photographer’s number one enemy. Teddy was advised to look for the finer detail in the familiarityPAGE | 14
“ Days blend but complacency is the “ working photographer’s enemy number one. of every sweep of the meander. On the eighth day he nodded at his mentor and rested a heavy lens in his lap. After a multitude of camera clicks, the mission was almost complete. The previous night’s fireside reviews of his photographs revealed a collection of startling reflections of river life. In particular there is one image of a young man, body arched like a bow, absorbing the afternoon light; every fiber of his body sprung with effort as he poled a dugout mokoro canoe across an expanse of lilies.PAGE | 15
Xaxaba Mokoro PolerThe life of this poler on an island village by atranquil lagoon amidst Illala Palms, is hiddenfrom the world of cities and highways. Xaxaba isone of six villages populated by the Bayei tribe,who collaborate with the Okavango KopanoMokoro Community Trust to sustain the naturalresources in the vicinity. Traditionally, theMokoro was a canoe wrought by hand fromJakkalberry and Sausage trees. Tribesman evolvedthis ancient method as stone is an element lackingin the Delta. Increased tourism rendered thedemand for ‘traditional mokoros’ unsustainable.Registered Mokoro pushers sub-contract to lodgesand camps to transport tourists. Such regulationof this industry ensures the protection of the bigtrees and a livelihood for locals.
INTERNATIONAL FOOTPRINT AND REGIONAL OFFICES SCOTLAND NIGERIA KENYA MALAWI ANGOLA ZAMBIA MAURITIUS NAMIBIA ZIMBABWE BOTSWANA SOUTH AFRICA OFFICES (including Associates, Partners and Representatives) Angola Nigeria Luanda +244 222 372 029 Lagos +234 1 4610691 Botswana Scotland Gaborone +267 318 8708 Edinburgh +44 131 550 3737 Kenya South Africa Nairobi +254 20342756 Johannesburg +27 11 550 6100 Malawi Zambia Blantyre +265 1 822 803 Lusaka +260 211 232 456 Mauritius Zimbabwe Mauritius +230 464 9799 Harare +263 4 790 090 Namibia WindhoekPAGE | 17
DIVISIONAL STRUCTURE Imara Group Asset Management Corporate Finance Stockbroking Trust Administration Imara Asset Imara Corporate Finance Imara S P Reid (Pty) Ltd Imara Beresford Imara Holdings Limited Management Limited South Africa (Pty) Ltd International Limited *South Africa * Botswana * BVI *South Africa *Mauritius Associate Imara Asset Imara Botswana Limited Imara Africa Securities Africa InvestmentsManagement UK Limited (Pty) Limited Limited *United Kingdom *Botswana *Botswana *BVI Imara Asset Imara Corporate Imara Capital Imara Capital Management Finance (Pvt) Limited Securities (Pty) Ltd South Africa (Pty) Ltd (Mauritius) Limited *Zimbabwe *Botswana *South Africa *Mauritius Imara Asset Imara Securities Imara Capital Management Angola SVM Limitada Limited South Africa (Pty) Ltd (Dormant) (Dormant) *South Africa *Angola *Botswana Imara Asset Stockbrokers C F Africa LimitedManagement (Pty) Limited Malawi Limited (Dormant) *BVI *Malawi *Botswana Associate Imara Asset Imara Edwards ImaraManagement (Pvt) Limited Securities (Pvt) Limited Trademarks Limited *Zimbabwe *Zimbabwe *BVI Stockbrokers Zambia Imara Capital Limited Limited *Zambia *BVI Associate Imara Capital Kenya Limited (Dormant) *Kenya Imara Capital Limited Zambia *Zambia Imara Capital BotswanaLegend (Pty) LtdActive Trading Company *BotswanaInvestment Holding or Group Parent Company Africa Private Equity FundDormant or Non Trading Company Managers (Pty) Ltd*Country of Registration *Botswana Imara Capital Zimbabwe (Pvt) Limited *ZimbabwePAGE | 18
GROUP ORGANISATIONAL STRUCTURE Group Holding Company, Incorporated in Botswana and a registered Imara Holdings Limited International Financial Services Company (Offshore Investment Status) 93.75% 100% 100% 100% 100% 25% 100% Imara Asset Management Imara Capital Africa Imara Asset Limited Stockbrokers Imara Capital Investments Management Limited Botswana Malawi Limited Limited UK Limited *BVI (Pty) Ltd *BVI Imara Africa Management Securities (Pty) Contracts 100% Limited Imara African Imara Opportunities 100% Botswana Limited Fund Imara Imara Capital 100% Limited Global Fund (Dormant) Imara Asset Imara Africa 51% Management Series Fund (Pty) Limited (Dormant) Imara South Africa Imara Trust Capital Securities 50.10% (Pty) Limited Imara Capital Sub Funds: South Africa • Zimbabwe Fund (Pty) Ltd • Nigeria Fund • East Africa Fund Africa Private 6.25% • African Resources Fund Equity Fund 50% Managers (Pty) Ltd 100% Imara Corporate Imara SP Reid Imara Asset Finance (Pty) Ltd Management South Africa (Stockbroking) South Africa (Pty) Ltd (Pty) LtdPAGE | 19
100% 100% 35.01% 50% 100% 100% Imara C F Africa Trademarks Imara Beresford Imara Asset Limited Imara Capital Non Trading Limited International Management Limited Limited Mauritius (Pty) Companies *BVI Zambia *BVI Limited 46,35% 100% 25% 100% Imara Capital Beresford Trust Imara Trust Zimbabwe and Corporate Company Stockbrokers Imara Capital (Pvt) Limited Services (Mauritius) Zambia Limited Kenya Limited Limited 50% 100% 100% 100% Imara Securities Angola SVM Limitada Imara Edwards Beresford One Imara Securities Limited Nominees (Pvt) Limited Limited Imara Asset Beresford Two Imara Two Management Limited Limited (Pvt) Limited Imara Corporate Imara Finance Zimbabwe Directors (Pvt) Limited Limited Legend Botswana Kenya South Africa Angola British Virgin Islands United Kingdom Zimbabwe Zambia Malawi MauritiusPAGE | 20
The Okavango DeltaThe inaugural Imara Lightwarrior expedition set sail from Maun and by boat found a course in a variety of rivers. After the Thamalakanethe journey continued upstream along the Boro, and the Jao rivers whereupon the River Okavango flowed into the panhandle of the Delta.Over eight days the expedition navigated its way through the Delta, camping on islands at night. This exquisite emerald oasis in the Kalaharisands, sustains a staggering array of wildlife and flora. Some 64 species of reptiles, 71 species of fish, 122 species of mammals, 444 species ofbirds and 1300 species of flowering plants thrive by its pristine waters. ‘Low volume, high yield’ policies of eco-tourism make the Okavangoan economic jewel for Botswana, where this industry is the second largest contributor to GDP. Amongst the people whom the Delta supportsare local villagers and migrant fisherman who come to make use of the high water season and engage in local trade.
CHAIRMAN’S STATEMENTEconomic Overview commendable performance. A Trading Statement issued in March 2012 indicated an improvedCompeting for growth in difficult economic times earnings performance for the year but actualis an uncertain endeavour. The credit crunch results still fell short of the forecasts, a soberand the ensuing recession have actually never reminder of how difficult it is to accuratelyended and it would appear that the end is not forecast earnings. Sustainability of earningsin sight in the near term. Yet the world is in its remains uncertain, strongly influenced by volatilityfifth year of turbulent and depressed markets. in world markets.There is a reluctance to mention depressionbut the reality is that this is what the world is It is important to mention that the reportedexperiencing. As a pan African group, our growth profit for the year is inclusive of a number ofmomentum has been stifled to some degree by amounts which are of a non-recurring nature,adverse global economic conditions, but African namely exchange gains, profits arising from themarkets have shown incredible robustness and sale of JSE Securities and the recovery of costthis has impacted positively on the Group’s awards relating to the NBS Malawi arbitrationearnings performance. A consequence of the proceedings.macro-economic environment has been thatthe “market effect” on our results for the year The Asset Management division continued to behas been more significant than the “management the star performer in the Group, contributingeffect”. As a business, we have had to adapt P12,54 million to Group earnings. The division`sto this new world economy, characterised by year was something of a mixed bag with significantmarket volatility, global investment redemptions, redemptions impacting negatively on funds underthe dash for cash phenomenon, illiquid domestic management, while in the latter part of the yearmarkets, currency instability, a wait and see inflows were received into the Funds. The Group isapproach to new investment and an upward delighted to have been appointed the sole Africaspiral in costs. The resultant impact on investment manager for the new Russell Global Emergingreturns has inevitably led stakeholders and Markets Fund, a global endorsement for Imara, whileyour Board to question the appropriateness of a number of awards were received for the bestbusiness strategies and the management effect on performing funds in Africa in 2011. These includedperformance. Against this economic backdrop, the best performing fund over USD 50 millionit is particularly pleasing that the Group has (Imara African Opportunities Fund) and below USDreturned to profitability in the year under review, 50 million (Imara Africa Resources Fund) as wellwith profit after tax (PAT) for the year of P4,76 as the best pan- Africa and MENA long/absolutemillion and with attributable earnings of P5,63 return fund (Imara Zimbabwe Fund).million. Stockbroking continued to deliver steadyGroup Financial Review revenue despite high levels of uncertainty in equity markets. The contribution to the earningsAll divisions were profitable for the year. The performance of the division from the Futures Deskachievement of PAT of P4.76 million for the year has been more significant in the current year, butrepresents a turnaround of P12.45 million from its expanding role brings with it increased risk. Thethe previous year’s loss of P7.69 million - a Africa Desk, which was relocated from GaboronePAGE | 23
The People of the Delta “the riverthat never finds the sea”Okavango, “the river that never finds the sea”, runssouth from Mohembo and mushrooms at Seronga,where up to 22,000 square kilometres of waterripple out over approximately 10% of Botswana’sland mass. The Delta proper is a mosaic ofchannels, lagoons and ox-bow lakes. Despite itsmass, this is a unique manifestation of dynamicequilibrium working in nature. It is fitting thatthe meek (smaller, weaker tribes) have been thetraditional inheritors of the Delta: 300 years agothe Bayei tribe fled conflict in the north to settlehere. More recently, the Herero and Damara tribesarrived to escape strife with the Germans in SouthWest Africa. The Delta itself has been hostile –the presence of malaria, sleeping sickness, erraticrainfall and poor soils have ensured that only asparse human population can unlock the Delta’spotential to perennially sustain.
CHAIRMAN’S STATEMENTto Johannesburg in 2011, is beginning to gain some and the cash and cash equivalents at year endtraction and the role of institutional players both amounted to P84.49 million. The Group continuesfrom the continent and abroad is becoming more to have zero borrowings in its capital structuresignificant. and the Group’s balance sheet remains sound. This begs the question whether or not the GroupThe Corporate Advisory division, which has has been prudent in its cash management and Ibeen loss making in previous years, returned to believe that it has. Exchange rate movements haveprofitability following the closure of some long been favourable in the current year and this hasrunning mandates. Advisory mandates in Angola resulted in exchange gains of over P3.0 million.failed to materialise as fast as anticipated andearnings predicted for the 2012 financial year Corporate Governancehave now been deferred to 2013. The Group continues to look to improve itsThe Group increased its equity stake in the corporate governance structures given theoperations of Imara Capital Zimbabwe (Private) reputational risk associated with financialLimited from 32% to 46% in November 2011 and the services companies such as ours. The Group re-results of the Zimbabwe entity were consolidated organisation exercise has been completed forfor the first time from this date. The impact on implementation in 2013, but original proposalsthe earnings performance and the Statement of have needed significant modification in order toFinancial Position of the Imara Group as a result ensure compliance with increasingly onerousof this consolidation have both been positive. statutory and regulatory requirements. The risk and compliance functions within the GroupThe contribution of associates has again been continue to be strengthened and a Social andpositive and all associates were profitable for the Ethics Committee was established in April 2012 toyear. In addition there was a reversal of previous comply with the SA Companies Act. In addition,impairment losses amounting to some P32 000. This an enterprise wide risk management strategy isperformance is testimony to a strong foundation being developed, leveraging ISO31000 and Kingfor a more profitable Group going forward. The III as default standards for the framework.piecemeal acquisition of an additional 5% equitystake in Imara Beresford International Limited, Outlook and Strategythe Mauritian trust and administration businesscontinued in 2012, bringing the Group’s equity African capital markets remain relatively cheap,stake in this growing business to 35% at year end. certainly below what they were prior to the credit crunch in US$ terms, and impacted negatively byThe Group remains resilient with total income sentiment concerning events outside Africa. Withgrowth of 34% for the year at P137.4 million. The good corporate earnings growth, higher dividendStatement of Financial Position has strengthened yields, growth in the pension fund industrysince the announcement of interim results in through deregulation and interest rates startingDecember 2011. Cash flow at 31st October 2011 to fall due to improved fiscal discipline and betterwas negative by P44.39 million but improved management, the lot of our clients across Africansignificantly in the second half of the year. The is improving all the time. More Africans arecash outflow for the full year was P16.25 million becoming formal wage earners and are demandingPAGE | 25
and getting more as consumers. The response support and commitment.by most corporates operating on the continent Appreciationhas been to increase capacity and capabilityhence increasing foreign direct investment. This Finally, I would like to take this opportunity torepresents our greatest opportunity for future thank my fellow directors for their wise counsel,growth. We believe the foundation for future management and staff for their determination andgrowth has been set and our stakeholders will be hard work in turning around the Group’s fortunes.rewarded for their perseverance, patience and I am confident of their continued support andbelief in our business model. dedication going forward.A Cautionary Announcement was issued in January2012 advising shareholders that the Group hadentered into negotiations regarding a possibleacquisition, which if successfully concluded,may have a material effect on the Imara shareprice. These negotiations are continuing andan announcement will be made in due course.The target acquisition is strategically importantto Imara as it will see an expansion of the Imara S.M.Ndorofootprint into East Africa. 3rd September, 2012The South African empowerment transactionput in place in 2007 with Zingwenya Holdingsterminated in 2011 after the initial three yearterm. Empowerment credentials associated withthis transaction are now irreversible but a newempowerment transaction has been negotiatedwhich will build on the BEE credentials alreadyestablished. Shareholder approval will berequired for the new BEE transaction and thiswill be tabled at the forthcoming Annual GeneralMeeting of the company.Rewarding ShareholdersThe Board continues to hold the view that whenthe Group is profitable, a dividend should be paid.Your Board has therefore declared a dividendof 3 thebe per share in respect of the April 2012financial year. The Board believes this maintainsthe balance between continued investment in thebusiness whilst also rewarding investors for theirPAGE | 26
CHIEF EXECUTIVE OFFICER’S REVIEW OF OPERATIONSGroup Review round performance. The Corporate Finance division also registered a positive contribution as a number ofThe year ended 30 April 2012 showed a pleasing long standing mandates were completed.turn around despite difficult market conditions. Theever increasing interest in Africa again resulted in Turning to the Cash Flow Statement, although thereno significant new inflows into the equity markets was a net outflow of P16.25 million during the courseand turnover remained depressed as a whole. The of the year, the trend was more positive in the secondperformance of the 17 African markets, excluding South half. The Group’s “free” cash position remains strongAfrica, was generally poor with only six closing the with no debt held by the Group. It should be noted thatyear under review in positive territory in US$ terms. Of the short term borrowings reflected in the Statementthe larger markets Egypt was down 2.7%, and Nigeria of Financial Position relate to dividends declared in13.1% with the best performers being Rwanda up 57.4% favour of our South Africa Empowerment partnersand Kenya which was up 8.6%. Although the Group`s that are being withheld pending settlement of theirimproved performance was maintained in the last obligations in terms of the BEE transaction.quarter, the uncertainty created by the problems in theEurozone, the slowdown in China and US debt concerns Asset Management Divisioncontinued to negatively affect investor appetite. The Asset Management division remained the bestAll divisions and associates were profitable resulting performer. Funds under management showed ain Group profit after tax of P4.76 million, a positive marginal increase at P3.05 billion, although there wasturnaround of P12.45 million over the previous year. a decline of 10.2% in US$ terms at US$415 million. TheRevenue increased by 34% and total expenditure by Funds experienced net outflows as redemptions were20%. Imara Capital Zimbabwe (Private) Limited was received primarily from European based investors. Theconsolidated for the first time following the acquisition performance of the Funds in the offshore fund divisionin December 2011 of a further 14.27% shareholding was good with three of them winning awards, whilstin the business, which resulted in Imara holding an others appeared in the top decile of the performanceeffective 46.45% interest. It is important to note that the rankings. We were delighted to be appointed as thereported profit included a number of non-recurring sole manager for the African portion (inclusive ofitems, namely exchange gains, profits from the sale South Africa), of the new Russell Investments Globalof JSE securities and the recovery of cost awards Emerging Markets Extended Opportunities Fund, whichrelating to the NBS Malawi arbitration proceedings. was launched in March 2012. This appointment followedThe effective tax rate was 44% compared to 24% last a thorough due diligence investigation by Russell thatyear due to the write back of a deferred tax asset of we believe will be positive in our future marketingP950 000. Shareholders’ equity increased marginally efforts with other global institutions. On the domesticby 4% to P137.73 million, while total assets declined side both South Africa and Zimbabwe registered18% to P199.9 million. A strong contribution was again positive growth.made by the Asset Management division while theStockbroking division turned in a much improved all During the year Imara Asset Management (Mauritius)PAGE | 27
Limited was established as a joint venture with strong mandates on its books, involving privatisations,local partners. The business will initially act as a M & A, capital raisings and listings in a number ofdistributor of existing Imara product, as opposed to countries including Angola, Botswana, South Africa,a fully manned asset management business. Initial Zambia and Zimbabwe. Work continues on a numbermarketing within Mauritius has been encouraging with of transactions, which if successful will provide longinflows gaining momentum. term secure annuity income, which will help to smooth earnings going forward. In Zimbabwe the investmentOverall, the global investment climate has not been and time put into ZIADA, the micro-finance business,conducive for raising funds under management. The has started to produce results. The business wasproblems in the developed markets, and in particular launched in November 2011 and is showing solid growth.Europe, have encouraged investors to remain riskaverse preferring a ‘wait and see’ approach before Despite a tremendous amount of work, fund raisingcommitting new investment funds. It remains uncertain for the Batian Private Equity Fund has yielded noas to when this situation may improve. real inflows and little prospect of any in the short to medium term. Post year end the promoters decidedCorporate Finance Division to discontinue this initiative and as such it will be shut down as at the end of September.Corporate Finance had a much improved year andreturned to profitability for the first time in a number Stockbroking Divisionof years as certain long running mandates were finallyclosed. This was achieved despite the delay in the Stockbroking ended the year with much improvedexecution of a significant mandate in Angola, which profits of P8.8 million. Imara SP Reid returned profitsis now anticipated to be completed in the current of P5.9 million, which was significantly up on lastfinancial year. The planned merger of the Group`s year. Despite margins remaining under pressureadvisory businesses into a single unit was deferred due to increased competition from the banks, whichdue to regulatory and tax concerns. Despite this the continue to cut brokerage rates, average monthlyteams are operating well together. Zimbabwe had a brokerage grew by 15.9% despite a 3.9 % drop in themuch improved year with nine mandates contributing average number of trades per month. The number ofto revenue. It is encouraging to note that six of these active clients remained above 10,000. The derivativestransactions have continued into the current year desk again showed significant improvement with itswith strong expectation of successful conclusion. The contribution to revenue up 91% on the prior yearhighlights of the year were the very successful listing of and 13% on budget. Proprietary trading was alsothe property company New African Properties Limited much improved.in Botswana, which followed one of the largest singlecapital raises on the Botswana Stock Exchange, and The relocation of Imara Africa Securities tothe Farmers House acquisition of Arcades in Zambia, Johannesburg, where it is now operating as a divisionwhich resulted in the enlarged company relisting as of Imara SP Reid has gone well. The trading platform,REIZ Limited. The Division has a number of exciting which allows clients to trade 16 African marketsPAGE | 28
CHIEF EXECUTIVE OFFICER’S REVIEW OF OPERATIONSseamlessly, was completed during the year under the meantime our efforts to concentrate on Corporatereview. It is pleasing to note that the desk is now starting Advisory work are beginning to show positive results.to execute institutional trade on the JSE. Regrettably,low volumes in all markets and the time taken to sign on Imara Capital Zimbabwe Limited has been consolidated forclients, due to regulatory requirements, has resulted the first time following an increase in the Group`s equityin a loss for the year. However, it is believed that the holding in the business. The continued uncertainty aroundinvestment to get this initiative right will reap rewards elections and the empowerment legislation resulted in awhen markets and sentiment improves. significant drying up of foreign inflows into the country. The Zimbabwe Stock Exchange turned in a disappointingAssociate Companies performance, with the main Industrial Index declining 21.3% over the year. Despite this, revenues and profits wereTurning to our associates, Stockbrokers Malawi Limited had ahead of last year.a much improved year producing a small profit. The politicalchanges, which took place in April 2012, should result in a Imara Beresford International Limited (IBI) in Mauritius hadsignificant improvement in the macro economy, which will a much improved year with profits well ahead of last yearenhance the operating environment. Stockbrokers Zambia despite being marginally behind budget. This was primarilyalso showed a small profit for the period under review, due to an increased number of company incorporations, awith volumes on the Lusaka Stock Exchange remaining higher level of administration work, enhanced work outputsubdued. The change in Government in September 2011 efficiency due to a new client administration system and theresulted in a slowing down of public sector work although restructuring of operational expenses. Imara increased itsthis is expected to pick up this year. In terms of the new equity stake to 35% during the year, in terms of its option,Government policy which requires corporates to be and will further increase that to 40% in the current year.51% Zambian owned to qualify for public sector work itwas agreed that Imara would not increase it’s stake to in Opportunitiesexcess of 49%. Capital Securities in Botswana, which wasrebranded as Imara Capital Securities, registered a small We continue to explore opportunities to increase ourloss after tax. coverage in East and West Africa and it is hoped that the relationship with Chapel Hill Denham in NigeriaImara Edwards Securities in Zimbabwe had an improved will produce positive results this year. The Assetyear with brokerage and profits ahead of the previous Management relationship with ICEA Asset Management,year. This was despite a decline in market share. In which is the co-manager of the Imara East Africa Fund,Angola, progress towards the establishment of the stock is still working positively.market remained slow. On the positive side, followingthe appointment of a new board to the Capital Markets The South African empowerment transaction put inCommission, processes are underway to complete the place in 2007 with Zingwenya Holdings terminatedlicensing of Imara Securities Angola. After the August on 30 April 2011. A new empowerment transaction haselections it is anticipated that the launch of the Bolsa de been negotiated with one of the members of ZingwenyaValores e Mobiliarios de Angola (BVDA) will be given Holdings to take account of changed market conditions.priority by the authorities. It is understood that the market Vuvuzela Investments 1 (Pty) Limited will be the vehiclewill begin with trading in fixed income instruments. In through which the new consortium will contract withPAGE | 29
Imara. Shareholders will be asked to approve the In closing, I would like to thank my Chairman, Miketransaction as an ordinary resolution at the Annual Ndoro, and the Board for their continued support andGeneral Meeting. The Imara South Africa Trust, which guidance. Finally, I must recognise the tremendousowns 6.25% of Imara Capital South Africa (Pty) Limited, contribution made by the entire Imara team. Theirlaunched the Imara Lightwarriors project during the dedication and hard work continues to position Imarayear under review. This is targeted at assisting specific for growth.education in South Africa. The Trustees continue toevaluate options to ensure that the Trust`s resourcesare deployed appropriately.In line with the ongoing strategy to drive revenuesaggressively a Group Marketing Executive wasappointed to centralise all marketing, public MJS TUNMERrelations and advertising. This includes the CHIEF EXECUTIVE OFFICERstandardisation of all documentation and marketing 3rd September 2012materials. In addition the website is undergoinga complete revamp and social media such asFacebook, LinkedIn and Twitter all now form part ofthe Group`s marketing tools. It is anticipated thatthis will significantly enhance the Imara brand.The Group re-structuring, which has taken longerthan anticipated, will not result in significant savings inoperating expenses as anticipated. This is due primarilyto regulatory regulations which promote stand-aloneentities. Nevertheless certain savings will be achieved.Imara Holdings remains listed on the Venture CapitalMarket of the Botswana Stock Exchange and it is stillintended to apply to move to the Main Board once theminimum requirement of 300 public shareholders isachieved.OutlookThe current year has started slowly with the operatingenvironment remaining difficult. However, it is hopedthat the growing interest in Africa will result inincreased inflows, which will have a positive impact onyour Group. Against this background it is anticipatedthat Imara will deliver profits in the year ahead.PAGE | 30
CORPORATE GOVERNANCE REPORTNature of Business standards of integrity are an integral part of how the Group conducts its business affairs. The GroupImara Holdings Limited is a Botswana registered recognises that investor and stakeholder perceptionscompany, licenced by the International Financial are based on the manner in which the Group, itsServices Centre (IFSC), under Tax Certificate Number directors, management and employees conduct22, and is the holding company for a group of companies business. The Group, therefore, strives to achieveconducting the following types of business, primarily the highest standards of integrity, transparency andfor institutional and private clients: business ethics at all times.- asset management;- corporate finance; The Board’s deliberations take into account the values- stockbroking; and underpinning good corporate governance, namely:- trust administration and custodial services. - responsibility; - accountability;There has been no significant change to the nature of - fairness; andbusiness from previous years. - transparency.Corporate Governance Principles The Group is currently formulating a new Code of Ethics which will codify the ethical principles whichThe Group is committed to the principles set out in the Group currently subscribes to and applies. Thethe King Report on Governance 2009 (King III). The Code of Ethics will assist the Board in ensuring thatBoard is satisfied that the Group is working towards business ethics across the entire Group are managedfull compliance with the principles set out in King III effectively.and with progress in this regard. Explanations havebeen provided where the Group is yet to comply with The South African subsidiaries recently established acertain key principles. Social and Ethics Committee as required in terms of the South African Companies Act and related regulations.The Imara Holdings Limited board (the Board) is the This Social and Ethics Committee reports to the Imarahighest decision making body in the Group and is Capital South Africa and Imara Holdings Limited Boards,ultimately responsible for corporate governance. and its terms of reference are reviewed annually andThe Board acknowledges the relationship between approved by these boards.strategy, risk, performance and sustainability. Board CharterThe Board of Imara Holdings Limited remains committedin its stewardship of the Group’s affairs, to applying The Board Charter outlines the role of the Board andthe highest standards of corporate governance and its responsibilities.international best practice. Key responsibilities of the Board include:Ethics and Organisational Integrity i. the setting of the strategic direction of the group and monitoring management’s implementationThe Board provides effective leadership based on of that strategy;an ethical foundation and directs the strategy and ii. ensuring an effective corporate governanceoperations to build sustainable businesses. structure; iii. ensuring that effective audit, risk management,Professional and ethical conduct and the highest information technology, internal controlPAGE | 31
Fishermen and Reed CuttersMany of the species of fish in the Delta areinedible or protected, so the traditional fishermendraw selectively from the 71 recorded varietiesheld in the Delta’s waters. The three main speciespulled from the river for consumption are TigerFish, Bream and Barbel. Reed rafts enmeshwith the other plants on the Delta’s riverbed,lending cohesion to sand. Reed-cutters utilisethe fibrous qualities of the ubiquitous reed in themarketplace of village life. Cut reeds are traded,and harvested as abundantly available material forwoven sleeping mats, baskets, screens, roofs andfish traps.
CORPORATE GOVERNANCE REPORT and compliance systems are in place to protect matters which are sensitive, extraordinary or of a the group’s assets, so as to minimise the strategic nature. possibility of operating beyond legal requirements or acceptable risk parameters; The Board composition is balanced so that no iv. monitoring of operational performance; individual board member or small group of members v. ensuring that succession planning is in place; and has unfettered control over decision making. vi. the integrity and quality of communications with stakeholders, regulators, shareholders and Independent Non-Executive Directors employees. The Board evaluates the independence of non-Composition and Functions of the Board executive directors annually. Independence is determined according to the King Code of GovernanceThe Group is governed by a unitary board of recommended practice, which requires rigorousdirectors. In terms of the Company’s Constitution, reviews of directors’ independence and performancethe Board may not comprise fewer than four or annually and particularly so after they have served onmore than twenty directors, at least one of whom the Board for over nine years. The Board, following its’shall be ordinarily resident in Botswana. The evaluations, is of the view that all independent non-Board of directors is chaired by Michael Ndoro executive directors are indeed independent.an independent non-executive director andcomprises ten directors, five of whom are non- Declaration of Directors’ Interestsexecutive. The majority of non-executive directorsare independent. Details of the composition of the Directors of the Board and subsidiary boards areBoard are detailed on page 6 of this Annual Report. required to make annual declarations of their interests and a register of directors’ interests is maintained byIn terms of the Company’s Constitution, directors the Company Secretary. Directors and managementare appointed for three years. At least one third are also required to disclose any material interestsof the directors (rounded down) retire by rotation in contracts and business transactions relating to theannually and if available, can offer themselves Group and to recuse themselves from any discussionsfor re-election at the company’s Annual General relating thereto.Meeting. Non-executive directors are not requiredto hold shares in the company but certain directors The Board manages all conflicts of interest whenhave independently elected to do so. Remuneration they arise. The management of conflicts of interest atlevels of non-executive directors are reviewed subsidiary company level is delegated to the respectiveannually and benchmarked against the Botswana boards within set parameters.financial services sector companies and proxyfinancial services groups with a regional presence. Board AppointmentsThe roles of the Chairman and the Group ChiefExecutive Officer are separate with clear divisions The selection and appointment of directors is a formalof their responsibilities to ensure a balance of and transparent process, involving the Board as apower and authority between them. whole and assisted by the Nominations Committee. In appointing directors, emphasis is placed on achievingThe Board delegates responsibility for implementing a balance of skills, experience, professionalism andthe strategic direction and managing the day-to- industry knowledge necessary to conduct the businessday operations of the Group to the Group Chief of the Board.Executive Officer. The Chief Executive Officerconsults with the Chairman, in the first place, onPAGE | 33
Company Secretary discharged effectively in accordance with best practice. The results of the evaluation are collated by the ChairmanThe Company Secretary is appointed by the Board and discussed with the Board with the purpose ofof Directors. All directors have direct access to the identifying training needs for directors. The evaluationCompany Secretary and to information regarding the process includes a review of the performance ofGroup’s affairs. David Stone serves on the Board as an individual directors, including the Chairman. The mostexecutive director and is also the Company Secretary. recent evaluation exercise indicated that the directors’Consequently, the company has not complied with were satisfied with the overall effectiveness of thethe King III Code recommendation that the Company Board and that of its members.Secretary should not be a director of the company. TheBoard is, however, of the view that the incumbent is able Board Committeesto execute both roles effectively and independentlyand the status quo will be reviewed and re-assessed The Board is assisted in the discharge of its duties andperiodically. responsibilities by a number of board committees, which comprise the:Board Meetings - Audit and Risk Committee, - Executive Committee;The Board meets at least four times a year to review the - Nominations Committee; andGroup’s financial performance, strategic direction and - Remuneration Committee.key policies. It approves budgets and reviews the overalleffectiveness of the internal control, risk management These Committees are accountable to the Board. All ofand statutory and regulatory compliance systems. the Committees are chaired by non-executive directors,It also monitors the implementation of strategy and with the exception of the Executive Committee which ispolicy through structured reporting mechanisms and chaired by the Group Chief Executive Officer. Boardconsequent accountability by executive management. Committees, in the main, make recommendations to the main Board for its approval or final decision. Terms ofAccess to Information and Resources reference of the Committees have been approved by the main board and are reviewed annually. Minutes ofDirectors have unrestricted access to executive Committee meetings are circulated and reported on atmanagement, the Company Secretary and Group ensuing board meetings. Senior executives are invitedinformation. They are also entitled to make use of to attend meetings of the committees by invitation,independent professional advisors, at the Group’s where considered appropriate.expense, when necessary to discharge specificresponsibilities. External auditors attend the Group and Audit and Risk Committeesubsidiary audit committees by invitation. Non-executivemembers of the Audit and Risk Committee meet with the The Audit and Risk Committee is chaired by Gunterexternal auditors at least once a year without executive Steffens, an independent non-executive directormanagement present. and comprises three members, all of whom are non- executive directors. Details of the composition of theBoard Effectiveness and Evaluation Committee is detailed on page 6 of this Annual Report. The Group Chief Financial Officer and the ChairmanThe Chairman of the Board requires all directors of the Board attend meetings of the Committee byto complete annual questionnaires to evaluate the invitation.effectiveness of the Board as a whole and also ofits members. This process is used to ensure that the The main responsibility of the Committee is to assistresponsibilities detailed in the Board Charter are the Board in discharging its responsibilities under thePAGE | 34
CORPORATE GOVERNANCE REPORTCompanies Act for ensuring compliance with regulations implementation of an ISO 31 000 compliant Enterprise Riskimposed by regulators and supervisory authorities and Management System, which will assist in the enhancementfor assessing, managing and monitoring risk. and standardisation of the group’s risk management processes. The Board is satisfied that existing riskThe Committee has formal terms of reference which management practises are adequate but acknowledgeshave been approved by the Board and set out its the need for enhancements, standardisation and moreresponsibilities. robust systems. Consequently, independent advisors have been engaged to assist the group in implementingThe Audit and Risk Committee is responsible for an Enterprise Risk Management System. Implementationrecommending the appointment of the external is currently in progress and is scheduled for completionauditors and overseeing the external audit process. It before the end of the April 2013 financial year.also monitors the effectiveness of:- financial controls; The Audit and Risk Committee is also looking to expand- reporting; the internal audit function in order to attain effective- compliance with International Financial Reporting combined assurance. Standards (IFRS);- the system of internal control; and The Audit and Risk Committee has:- statutory and regulatory compliance at both Group - satisfied its responsibilities for the year, in and subsidiary company level. compliance with its terms of reference; - satisfied itself regarding the effectiveness of internalThe Committee also assesses the independence and financial controls;effectiveness of the external auditors’ monitors. - satisfied itself regarding the independence of the external auditors; andAudit and Risk Committee meetings are held at least - recommended the approval of the consolidated andthree times a year and are attended by the independent company annual financial statements, incorporatingexternal auditors, who have unrestricted access to the accounting policies, by the Board.Chairman of the Committee. Meetings are also attendedby internal auditors, compliance officers and senior Remuneration Committeemanagement, on an as required basis. The Committeemeets with the external auditors at least once a year, The Remuneration Committee is chaired by Garywithout executive management present. Johns, a non-executive director and comprises three members all of whom are non-executive directors.Risk Management Details of the composition of the Committee are detailed on page 6. The Chief Executive Officer andThe Board is responsible for determining the risk appetite one other executive director attend meetings of theof the Group, for setting risk parameters and for the Committee by invitation.overall governance of risk. The Audit and Risk Committeecurrently assists the Board in discharging its risk The Remuneration Committee is responsible for settingresponsibilities by monitoring the effectiveness of risk remuneration policies for the Group. It aims to ensuremanagement procedures at both Group and subsidiary that the financial rewards offered to employees arecompany level. The Board currently holds the view that sufficient to attract people of the calibre required tothe risk and audit function can be combined under a single effectively implement strategy, and manage the group’sCommittee and as a consequence, there is no separate affairs in order to produce the required returns forRisk Committee. This position is reviewed annually. shareholders. It also seeks to ensure that directors and executives are fairly rewarded for their respectiveThe Committee has recommended the establishment and contributions to the Group. The Committee performsPAGE | 35
annual reviews of the Employee Share Option Scheme, Executive Committeethe allocation of share options, the profit sharingscheme and the apportionment of profit share to The Executive Committee is chaired by the Group Chiefexecutives and employees. Executive Officer and comprises the senior executives of the group. The Committee meets monthly and isThe Committee has formal terms of reference which responsible for managing the business of the Groupset out its responsibilities. The Committee has satisfied when the Board is not in session, subject to statutoryits responsibilities for the year, in compliance with its and any other limitations on the delegation of authorityterms of reference. determined by the Board from time to time. It also acts as a medium of communication and co-ordination betweenNominations Committee business units, group companies and the Board.The Nominations Committee is chaired by Michael The Executive Committee is also responsible forNdoro and comprises four members, two of whom the implementation of structures, processes andare non-executive directors. The Committee includes mechanisms relating to information technologythe Chief Executive Officer and is responsible governance. The Committee monitors informationfor making recommendations to the Board on all technology governance practices and ensures thatnew appointments to the Board and reviews the they are aligned with the Group’s performance andappointment of directors to subsidiary company sustainability objectives.boards. A formal and transparent process is in place interms of which the requisite skills needed on the Board The Committee has formal terms of reference, which setare identified and those individuals who are best suited out its responsibilities.for the position and who are able to assist the Board intheir endeavours, are recruited. The Committee meets Appointments to the Boardon an as required basis. Messrs Joe Matsau and Gunter Steffens were invited toThe Committee has formal terms of reference, which join the Board of Directors on 1 December 2010. Theirset out its responsibilities. The Committee has satisfied formal appointment as directors was subject to approval by the Group’s regulator, Non-Bank Financial Institutionsits responsibilities for the year, in compliance with its Regulatory Authority (NBFIRA). Approval for their formalterms of reference. appointments was received from NBFIRA during the year.Board Meeting Attendance 2011/2012 Board Attendance Register Director Audit & Risk Remuneration Nominations Main AGM Committee Committee Committee SM Ndoro 3/3* 3/3 3/3 4/4 1/1 MJS Tunmer - 3/3* 3/3 4/4 0/1 AR Fleming - - - 1/4 0/1 G E Johns 3/3 3/3 - 4/4 1/1 JR Legat - - - 4/4 0/1 ACH Mackeurtan - 3/3* 3/3 4/4 0/1 RH Macleod - - - 4/4 0/1 TJ Matsau 3/3 4/4 0/1 GZ Steffens 3/3 - - 4/4 0/1 DE Stone 3/3* - - 4/4 1/1* By invitation.PAGE | 36