Merafe Resources Integrated Annual Report 2018

MERAFE RESOURCES INTEGRATED ANNUAL REPORT 2018 49 Social, Ethics and Transformation Committee report The Social, Ethics and Transformation Committee (the "Committee") was established by the Board of Directors on 21 February 2012, in accordance with the requirements of the Companies Act of 2008 (the "Act"), section 72(4) and Regulation 43(2). The Committee has an independent role. Its members include three non-executive directors, two of whom are independent and two executive directors. Independent non-executive director, Belese Majova, chairs the Committee. The Committee assists the Board in monitoring the Group’s activities in terms of legislation, regulation and codes of best practice relating to: • ethics; • stakeholder engagement, including employees, customers, communities and the environment; and • strategic empowerment and compliance with transformation codes and is responsible for: – monitoring the Company’s activities relating to social and economic development, good corporate citizenship, the environment and health and public safety; – ensuring appropriate short- and long-term targets are set by management; – monitoring progress on strategic empowerment and performance against targets; – monitoring changes in the application and interpretation of empowerment charters and codes; and – monitoring functions required in terms of the Act and its regulations. To meet its responsibilities, the Committee receives reports on the progress that both Merafe and the Venture have made in terms of the issues covered by its terms of reference. A senior representative of the Venture attends specific committee meetings where the focus is on the Venture. In addition to the above, the Committee: • reviewed and updated the Company’s Code of Ethics, the Board Charter, the Committee’s terms of reference, and CSI policy; • reviewed and assessed legislation applicable to Merafe, the Venture and the Committee; • assessed the Company’s compliance with King IV. The Company complies with King IV principles, save as otherwise noted and explained in this Integrated Annual Report; • assessed Merafe’s and the Venture’s transformation performance with specific reference to the Mining Charter and the B-BBEE Codes of Good Practice; • continually assessed Merafe’s corporate social investment; in this regard, the Committee continued to oversee and support the projects as set out on page 37 of this report; and • assessed the Venture's corporate and social investments which Merafe contributes to as set out on pages 37 and 38 of this report. The focus of the Committee in 2019 will be in the fields of education and health in areas in the vicinity of the operations and the school projects. The Committee will also focus on King IV compliance aiming at continual improvement, as well as Merafe's transformation performance with reference to the Mining Charter and the B-BBEE Codes of Good Practice. The members of the Committee believe that Merafe is substantively addressing the issues it is required to monitor in terms of the Act and that it has discharged its responsibilities as set out in its terms of reference. Belese Majova Chairperson 6 March 2019 Requirement Principle Merafe’s approach and compliance 3.84(g) The audit committee must consider on an annual basis, and satisfy itself of the appropriateness of the expertise and experience of the financial director and report thereon in the annual report and compliance with paragraphs 3.84 (g)(ii) and 3.84 (g)(iii). Our Audit and Risk Committee annually considers and satisfies itself of the appropriateness of the expertise and experience of the Financial Director and has reported in its Audit and Risk Committee report that it is satisfied with the appropriateness of the expertise and experience of the Financial Director. The Audit and Risk Committee also ensures compliance in terms of paragraphs 3.84(g)(ii) and 3.84(g)(iii) relating to proper and appropriate financial reporting proceedings being in place and operating and the appointment and suitability of the audit firm and partner. 3.84(h) The provision deals with the competence, qualifications and experience of the Company Secretary and the Board of Directors’ responsibility in relation thereto. The Remuneration and Nomination Committee as well as the Board assessed the competence, qualifications and experience of the Company Secretary (CorpStat Governance Services, represented by William Somerville and Elise Waldeck) against various criteria and a rating scale, and they have agreed that the firm is sufficiently qualified, competent and experienced to hold the position of Company Secretary. The Board made their assessment in a closed Board meeting. 3.84(i) The provision deals with a gender diversity policy. Merafe's Diversity Policy prescribes that at least 30% of the Board shall be female. At 31 December 2018, four of the eight directors were female (50%) and post year end (55%). The Remuneration and Nomination Committee undertakes when nominating and recommending directors to the Board, to take into account the principles and aims of the Diversity Policy of the Company. 3.84(j) The provision deals with a race diversity policy. Merafe's Diversity Policy prescribes targets for the racial composition of the Company, namely that the majority of the Board should be black. Seven of the eight directors are black (88%). The Remuneration and Nomination Committee undertakes when nominating and recommending directors to the Board, to take into account the principles and aims of the Diversity Policy of the Company. 3.84(k) The provision deals with the remuneration policy and implementation report. The Remuneration Policy and Implementation report are set out on pages 51 to 57 of this report.