Corporate Governance

Hulamin views the implementation of good corporate governance practices as integral to its business and recognises the need to conduct its business with openness, integrity and accountability. The board of directors believe that it has complied, in all material respects, with the provisions of the King II Report and Listings Requirements of the JSE Limited during the period under review. The board of directors is committed to comply in all material respects with the King III principles and best practice recommendations. Various initiatives are in progress to ensure that Hulamin will be able to report compliance with King III by the end of December 2010.

Board committees

The board has delegated, through formal terms of reference, specific matters to a number of committees whose members and Chairman are appointed by the board. There is full disclosure of matters handled by the committees to the board.

The board has an Audit Committee, a Remuneration and Nomination Committee and a Transformation Committee.

Audit Committee

In early 2008, the group Audit Committee was reconstituted to consist solely of independent non-executive directors to comply with the Corporate Laws Amendment Act. Its members are T P Leeuw (Chairman) and L C Cele.

N N A Matyumza has been appointed a member of the Audit Committee with effect from 1 March 2010. The Chief Financial Offi cer as well as V N Khumalo and representatives of the internal and external auditors attend committee meetings by invitation. The Company Secretary, W Fitchat is the secretary of this committee. The committee normally meets three times a year.

The group Audit Committee's key responsibilities are:

• Ensuring the integrity of the fi nancial reporting process, including sound systems of internal control and financial risk management;
• Review of Annual Reports, Interim Reports and other financial announcements, including the accounting principles and policies adopted therein and compliance to JSE regulations;
• Monitor the performance and effectiveness of the external auditors and evaluate the qualifi cations, expertise, resources, fees, scope of work and independence of the external auditors prior to recommending their appointment to the board and shareholders;
• To approve the internal audit work plan and oversee the conduct of the internal audit and the implementation of internal control enhancements;
• Annually review the committee's terms of reference;
• Approve any non-audit services provided by the external auditors; and
• Consider the appropriateness of the expertise and experience of the Chief Financial Officer.

An internal audit charter is in place which defi nes the function, responsibility and authority of the group's internal audit activity.

The group Audit Committee exercises its functions through liaison and communication with management and the internal and external auditors. The group Audit Committee has confirmed that it is satisfi ed with the independence of the external auditor for the 2009 fi nancial year, and with the expertise and experience of the Chief Financial Officer.

The Audit Committee has had its responsibilities expanded and in 2010 will become the Audit and Risk Management Committee in compliance with the recommendations of King III.

Remuneration and Nomination Committee

The Remuneration and Nomination Committee consists of non-executive directors of whom one is an independent director. Its current members are J B Magwaza (Chairman), V N Khumalo and M E Mkwanazi (who was appointed a member of the Remuneration and Nomination Committee with effect from 23 April 2009).

The Chief Executive Offi cer and T K Mshengu (Human Resources executive) are invited to attend. M A Janneker (Human Resources Manager) is the secretary of this committee. The committee normally meets three times a year.

The Remuneration and Nomination Committee's key responsibilities are:

• Formulation of employment and reward strategies to attract and retain executives and senior management;
• Recommend to the board the remuneration of directors and senior management; and
• Recommend to the board changes in the composition of the board and the appointment and the removal of directors. The nomination of board members to be considered at the annual general meeting of shareholders is the responsibility of the board as a whole and with a relatively small board Hulamin believes it is appropriate in its circumstances that the majority of the directors on the committee are not independent, and that the board Chairman does not act as chairman of this committee.

Transformation Committee

The Transformation Committee consists of an equal number of non-executive and executive directors of whom the Chairman is an independent director. Its members are L C Cele (Chairman), J B Magwaza, A Fourie and M Z Mkhize.
T K Mshengu (Human Resources executive) and F B Bradford (executive for sheet and plate products) attend committee meetings by invitation. N Mthembu (Communications Manager) is the secretary of this committee. The committee normally meets three times a year. The Transformation Committee's key responsibilities are:

• Recommend to the board the strategies and policies to be adopted to ensure the group's transformation targets are achieved;
• Align the group's transformation strategy with its overall business strategy; and
• Monitor the implementation and effi cacy of the employment equity, black management development, black equity ownership, preferential procurement, skills and enterprise development and socio-economic initiatives of the group.

Group executive committees

The group has a number of executive committees consisting of executive directors and other senior executives, with formal terms of reference approved by the board.

Executive Committee

The Executive Committee consists of the executive directors and other senior executives. The current members are A Fourie (Chairman), F B Bradford, C D Hughes, R G Jacob, C J Little, W Ortner, M Z Mkhize, T K Mshengu and D F Timmerman. The Company Secretary, W Fitchat is the secretary of this committee. The committee normally meets on a monthly basis.
The objective of the committee is to assist Hulamin's board in discharging its responsibilities, while acting within the parameters of the authority limits agreed by the board.

The Executive Committee's key responsibilities are:

• Recommend the business strategy, business plans and budgets to be adopted by the group;
• Manage the implementation and execution of the business strategies and plans approved by the board;
• Recommend major acquisitions and disposals as part of the group's business strategy;
• Ensure the group's systems of internal control, governance and risk management are both robust and well managed;
• Implement the approved authorities matrix within the organisation and approve the appointment of senior managers and the members of the group's executive committees; and
• Approve the capital expenditure plans of the group, within the budget approved by the board.

Risk Management Committee

The members of the Risk Management Committee are drawn from the group's senior executives. The current members are C D Hughes (Chairman), F B Bradford, A Fourie, R G Jacob, A P Krull, C J Little, M Z Mkhize, T K Mshengu and D F Timmerman. The Company Secretary, W Fitchat is the secretary of this committee. The committee normally meets four times a year.

While the board is ultimately accountable for risk management, the implementation of the group's risk management policies and systems of internal control are an integral part of management of the group's operations. The risk management activities of the group are reviewed by the
board at least twice a year.

The Risk Management Committee's key responsibilities are:

• Recommend to the board the risk management strategies and policies of the group;
• Review the integrity and appropriateness of the group's systems of risk assessment and management;
• Identifying new or emerging risks related to all aspects of the business, including fi nancial, operational and compliance risks;
• Monitor risk reduction actions; and 
• Review the internal controls that have been implemented to manage signifi cant risks, and the assurance provided in respect of those controls.

The Risk Management Committee will in 2010 report on its activities to the Audit and Risk Management Committee in compliance with the recommendations of King III.

Employment Equity Committee

The Employment Equity Committee members are drawn from the group's senior managers. Its current members are A Fourie (Chairman), F B Bradford, V Dukhee, C D Hughes, R G Jacob, M A Janneker, C J Little, M M F Mabe,

M Z Mkhize, T K Mshengu, N Mthembu, R N Nyandeni and D F Timmerman. M A Janneker (Human Resources Manager) is the secretary of this committee. The committee normally meets four times a year.

The Employment Equity Committee's key responsibilities are:

• Formulate strategy, policies and targets related to employment equity;
• Monitor the implementation of the agreed strategies for employment equity; and
• Involve a diverse range of employees in employment equity decision making.

Safety, Health and Environment Committee

The Safety, Health and Environmental (SHE) Committee members are drawn from the group's senior managers. Its members are A Fourie (Chairperson), M Aldworth, F B Bradford, B Henderson, R G Jacob, M Z Mkhize, T K Mshengu and D F Timmerman. The Company Secretary, W Fitchat, is the secretary of this committee. The committee normally meets on a quarterly basis.

The Safety, Health and Environment Committee's key responsibilities are:

• Review SHE performance;
• Review major SHE risks;
• Monitor actions to reduce SHE related risks;
• Identify new or emerging risks related to SHE; and
• Review of the internal controls to manage SHE risks.

Investor relations and shareholder communication

The group communicates its strategy, performance and vision through regular presentations to investors, analysts, employees and other stakeholders. In addition, management regularly meets with investors and institutional stakeholders on a one-to-one basis. The group website (www.hulamin.co.za) is also used for this purpose.

Code of ethics

The group's code of ethics requires all directors and employees to be committed to fair dealing, honesty and integrity in the conduct of its business. The code of ethics has been actively endorsed by the board and distributed to all employees in the group.

The code is designed to raise ethical awareness, act as a guide in day-to-day decisions and to assure customers and other stakeholders of the group's commitment to ethical behaviour.

An important element of the induction process is to communicate to new employees the code of ethics, the group's core values and its compliance procedures.

Compliance by all employees to the high moral, ethical and legal standards of the code is mandatory, and if employees become aware of, or suspect, a contravention of the code, they must promptly and confi dentially report it in the prescribed manner. Appropriate action has been taken in respect of all reported instances of non-compliance with the code by employees.

Whistle-blowing

Hulamin adopted a whistle-blowing policy during 2009 and has installed an anonymous reporting facility (the Vuvuzela Ethics Line), enabling employees and other stakeholders to report fraudulent, corrupt or unethical behaviour related to any of the group's activities, without fear of victimisation and retribution. Anonymity is guaranteed and the facility is managed in compliance with the Protected Disclosures Act, No 26 of 2000.

Contact details of the Vuvuzela Ethics Line are as follows:
Toll free number: 080 225 5688
E-mail: Hulamin@hotline.co.za
Website: www.thehotline.co.za

Price-sensitive information

No director, offi cer or employee may deal either directly or indirectly in the company's shares on the basis of unpublished price-sensitive information regarding the company's business or affairs. In addition, no director, offi cer or employee in possession of price-sensitive information may trade in the company's shares during closed periods. Closed periods are from the end of the interim and annual reporting periods to the announcement of financial and operating results for the respective periods, and while the company is under a cautionary announcement.