INTRODUCTION

Mvelaphanda Group Limited and its subsidiaries (“Group”) endorse the principles of the South African Code of Corporate Practices and Conduct as recommended in the King II Report (“King II”). The board of directors (“board”) recognises that good corporate governance is essential in achieving high standards of business integrity and ethics across all of its activities. Sound governance remains a priority to the board and the board continues to review and benchmark the Group’s governance structures and processes.

CODE OF ETHICS AND CONDUCT

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 majority of Group companies have documented codes of conduct for staff designed to provide guidance as to the ethical conduct of staff in all areas, appropriate policies in respect of the safeguarding of assets and information, and the appropriate corrective measures to enforce these policies. The Group provides monitors and audits a safe system for employees to report any unethical behaviour by fellow employees, directors or shareholders of the Group.

BOARDS AND DIRECTORS

As at 30 June 2009 the board of directors comprised three executive directors and seven non-executive directors. All non-executive directors, except for Mr Stein, are considered to be independent in accordance with King II.

Messrs Sexwale and Mavimbela resigned as executive directors with effect from 12 May 2009 and 5 June 2009 respectively, and Mr Willcox resigned as non-executive director with effect from 2 February 2009. The offices of the Chairman and Chief Executive are separate. There is adequate division of responsibilities amongst board members to ensure a balance of power and authority.

The appointment of new directors is considered by the board as and when the need arises, and from time to time recommendations for the appointment of new directors are made by the nomination committee of the board and approved by the full board of directors. If appropriate, external consultants are engaged to recommend candidates for appointment to the board. Executive directors are appointed to the board on the basis of functional expertise, experience and overall contribution to the Group. Non-executive directors are selected on the basis of industry knowledge, professional skills and experience.

In terms of the Company’s articles of association, one-third of the directors shall retire from office at every annual general meeting of the Company. The directors who retire in terms thereof shall be those who have been longest in office since their last election. In addition to the aforementioned retiring directors, any director appointed as such after the conclusion of the Company’s preceding annual general meeting shall retire from office at the conclusion of the annual general meeting held immediately after his appointment. Any retiring director shall be eligible for re-election and if re-elected, shall be deemed not to have vacated his office.

Details of directors of the board are set out here

The board has adopted a board charter which covers, inter alia, the following:

• The role and function of the board.
• The board structure.
• Meeting procedures.
• Monitoring of investment and operational performance.
• Risk management and internal control.
• Code of ethics.

Each board committee has its own charter which defines its purpose, authority and responsibility.

The process to entrench the sound principles of good governance throughout the Group has been implemented under the auspices of the audit committee.

All directors have access to the advice and services of the Company Secretary, whose appointment is in accordance with the South African Companies Act (as amended), and who is responsible to the board for ensuring the proper administration of board proceedings. The Company Secretary also provides guidance to the directors on their responsibilities within the prevailing regulatory and statutory environment and the manner in which such responsibilities (including not dealing in the Company’s shares during restricted periods) should be discharged. The directors are entitled to seek independent professional advice at the Group’s expense concerning the Company’s affairs and have access to any information they may require in discharging their duties as directors.

The Group complies with the Listings Requirements of the JSE (“the JSE Listings Requirements”) in relation to the restrictions applicable to trading in Mvelaphanda Group shares by directors and employees during closed periods. Closed periods endure from the end of a financial reporting period until the publication of financial results for that period. Additional closed periods, as defined in the JSE Listings Requirements, may be declared should such circumstances prevail.

2. Board committees

Several committees have been established to assist the board in carrying out its duties. The board has delegated to the committees specific roles of responsibility and these are set out the respective committee charters. There is full disclosure and transparency from the committees to the board. The board annually reviews the effective performance of each of its committees.

2.1 Nomination committee

Members: M Xayiya (chairperson), D Moshapalo, C Stein, Y Cuba and M Mpofu. Of the five members three members are non-executives and, except for C Stein, are considered independent. The nomination committee assists the board in the appointment of new directors.

2.2 Remuneration and transformation committee

Members: M Mpofu (chairperson), D Moshapalo, C Stein and M Xayiya. With the exception of M Xayiya, all members are non-executive directors and with the exception of C Stein, all non-executive directors are considered to be independent. In line with King II the Chief Executive, Y Cuba, attends the meeting when invited to but leaves the meeting before any decisions are made.

2.3 Audit committee

Members: B Hopkins (chairperson), K Dlamini and O Mabandla. All members are independent non-executive directors. All members are financially and commercially literate and are able to carry out their responsibilities. The Chief Executive Officer, Chief Financial Officer, Group internal audit manager and external audit engagement partner are invited to attend all meetings. The internal and external auditors have access to all audit committee members.