BOARD COMMITTEES AND ATTENDANCE

The Board established and delegated specific roles and responsibilities to sub-committees. Each committee's roles, responsibilities and membership follow their Board-approved charter. The directors have delegated specific responsibilities to committees to assist the boards of AfroCentric Investment Corporation Limited and the major subsidiary, AfroCentric Health (RF) Proprietary Limited (AHL), in meeting their oversight responsibilities. However, the delegation of authority does not absolve the Board and its directors of their fiduciary responsibilities. The directors confirm that the committees have functioned within their charters during the financial year.

The AHL Executive Enterprise Risk Committee and Transformation Committee do not operate at Group level. The Board relies on the sub-committees of AHL and entrusts them to function and operate as intended while updating the Board as to any material matters.

Audit and Risk Committee

The Audit and Risk Committee has adopted formal terms of reference that have been approved by the Board of Directors and are reviewed annually. The Audit and Risk Committee has executed its duties during the past financial year in accordance with these terms of reference.

Member Number of
meetings		     Activities in the 2018 financial year
Lindani Dhlamini Chairperson and Independent Non-executive Director 6/6    
  • Reviewed and approved year-end results and announcement (recommended for Board approval)
  • Reviewed profit announcements and made recommendations to the Board
  • Reviewed and approved all major accounting policy decisions affecting year-end results
  • Reviewed the risk and opportunities register
  • Reviewed the Group’s position on contingent liabilities and other claims at financial year-end
  • Reviewed and confirmed the updated authority levels
  • Reviewed non-audit services fees paid to the external auditors
Sello Mmakau Independent Non-executive Director 6/6    
Grathel Motau Independent Non-executive Director 5/6    
       
   
   
   

Investment Committee

The Investment Committee oversees the approval processes for investments. These ensure alignment with the Group’s agreed strategies and values.

Member Number of
meetings		     Activities in the 2018 financial year
Joe Madungandaba Chairperson and Non-executive Director 7/7    
  • Considered the acquisitions or disposals and first time investments in the Group
  • Considered the viability of the capital project and/or acquisition and/or disposal and their potential effect on the Group’s cash flow, as well as whether it will fit the Group’s overall strategy
  • Managed capital allocation within the Group
  • Ensured due diligence procedures when acquiring or disposing of assets
  • Reviewed and recommended the dividend policy of the Group for Board approval.
Ahmed Banderker Non-executive Director 7/7    
Meyer Kahn Lead Independent Non-executive Director 7/7    
Michael (Motty) Sacks Independent Non-executive Director 4/7    
Antoine van Buuren Group CEO and Executive Director 7/7    
Willem Britz Executive Director 7/7    
Nkateko Munisi Non-executive Director 1/7    

ICT Steering Committee

The ICT Steering Committee manages the progress of all information and communication technology initiatives associated with goals from the Group’s ICT strategy.

Member Number of
meetings		     Activities in the 2018 financial year
Sello Mmakau Chairperson and Independent Non-executive Director 4/4    
  • Reviewed all ICT policies including the business continuity plan
  • Reviewed and recommended the digital ICT strategy
  • Monitored the progress in the Fusion project
  • Ensured the alignment of the business and technical project management functions
Anthony Pedersen Medscheme CEO and Executive Director 3/4    
Vijay Pillay Executive Director 4/4    
Antoine van Buuren Group CEO and Executive Director 4/4    
Hannes Boonzaaier Group CFO and Executive Director 4/4    
Rudzani Nemaangani Chief Audit Executive 3/4    

Nomination Committee

The Nomination Committee provides recommendations to the Board on all new Board and committee appointments.

Member Number of
meetings		     Activities in the 2018 financial year
Anna Mokgokong Chairperson and Non-executive Director 1/1    
  • Reviewed the structure, size and composition (including the skills, knowledge and experience) required of the Board compared to its current position and made recommendations to the Board with regard to any changes
  • Reviewed the organisational corporate structure which includes the growth plan, the holding company and its subsidiaries
Joe Madungandaba Non-executive Director 0/1    
Ahmed Banderker Non-executive Director 1/1    
Meyer Kahn Lead Independent Non-executive Director 1/1    

Remuneration Committee

The Remuneration Committee’s mandate is to ensure that remuneration supports the strategic aims of the business and that packages are sufficient to recruit, motivate and retain senior executives while complying with regulatory and governance principles.

Member Number of
meetings		     Activities in the 2018 financial year
Joe Madungandaba Chairperson and Non-executive Director 6/6    
  • Reviewed the structure, size and composition (including the skills, knowledge and experience) required of the Board compared to its current position and made recommendations to the Board with regard to any changes
  • Reviewed the organisational corporate structure which includes the growth plan of the Group and its subsidiaries
Ahmed Banderker Non-executive Director 5/6    
Meyer Kahn Lead Independent Non-executive Director 6/6    
Michael (Motty) Sacks Independent Non-executive Director 3/6    
Ronnie Wa-Mundalamo Independent member 4/6    

Social and Ethics Committee

The Social and Ethics Committee assists the Board with responsible business practices within the Group and monitors Group activities in line with section 72 of the Companies Act, terms of reference and other legal requirements.

Member Number of
meetings		     Activities in the 2018 financial year
Nkateko Munisi Chairperson and Non-executive Director 3/3    
  • Ensured Group compliance to the Broad-Based Black Economic Empowerment Act
  • Reviewed the Company’s environment, health and public safety performance, including the impact of the Group’s activities and of its products and services
  • Reviewed results of Employee Climate Survey
  • Reviewed the Company’s standing in terms of the International Labour Organisation protocol on decent work and working conditions, its employment relationships (inter alia, treatment of unions and labour disputes), skills development, the promotion of equality and prevention of unfair discrimination (inter alia, policies and interventions)
Grace Khoza Executive Director 1/3    
Modjadji Tati Executive Director 2/3    
       
   
   
   

Governance policies, procedures and processes

Compliance

During the year, we focused on the following material regulatory developments that impact on our business.

  • Group Compliance Universe: The legislative compliance universe was reviewed, monitored and reported. A key framework that facilitates a compliance environment is our approved Compliance Universe that contains all relevant applicable legislation. The legislation is categorised according to significance; namely:
    core/primary, secondary and topical.
  • Implementation of the Insurance Fraud Manager System (IFM): This system helped recover millions in healthcare fraud, waste and abuse, including reducing claims that fell outside the average patterns through forensic interventions.
  • Protection of Personal Information Act (PoPI): With the impending effective date on application of PoPI, we complied with readiness on legislative requirements of PoPI as well as the General Data Protection Regulation (GDPR). To effectively manage this project, AfroCentric Group adopted a three-step approach to track progress. Firstly, discover as much information as possible; secondly, conduct workshops or interviews to assess the AfroCentric Group's compliance with PoPI; and thirdly, document findings by drafting and delivering a gap analysis report, including actions that need to be taken to ensure compliance. The project is in the final stage of the three steps, as a gap analysis report was provided on 4 April 2018. The project team is defining the scope of work for the project, which will feed into a project schedule, and finally the full implementation of the gap analysis report will commence.
Conflicts of interest

Declaration of interest

The Group has polices to manage potential conflicts of interest. Directors sign a declaration stating that they are not aware of any undeclared conflicts of interest due to their interest in, or association with, any other company. In addition, directors disclose interests in contracts and related party transactions for the Board to assess whether such transactions are done on arm's-length commercial terms.

In such instances, the directors in question will recuse themselves from deliberations.

All information acquired by directors while performing their duties, which is not disclosed publicly, is treated as confidential. Directors may not use, or appear to use, such information for personal advantage or for the advantage of third parties.

Dealings in securities

Directors and officers are prohibited from dealing directly or indirectly in AfroCentric's ordinary shares on the basis of unpublished price-sensitive information regarding its business or affairs. Similarly, no director or officer may trade in shares of the Company during a closed period, as determined by the Board according to JSE Listings Requirements. The Group's closed periods are between the last day of the reporting period and the publication of the results, as well as during those periods when the Group trades under a cautionary note. The Group Company Secretary regularly disseminates written notice to all directors and executive management throughout the Group, highlighting the provisions of the Financial Markets Act and JSE Listings Requirements, and informing them that dealing in AfroCentric shares during certain restricted periods may not be undertaken. The Board reviews its current share dealing policy and updates the policy to improve processes. This was carried out during the year under review.

During the year under review, there were no compliance concerns in respect of directors' dealings. This follows the commitment made to the JSE to strengthen its internal controls and processes relating to trading in AfroCentric's securities. An information and share dealings policy is in place. Controls are in place and the Board was inducted on the JSE rules in respect of share dealings. Constant updates are provided to the Board via the Company Secretary.

Internal controls

Organisational policies, procedures, structures and approval frameworks provide direction, accountability and segregation of responsibilities, and contain self-monitoring mechanisms. Operational and executive management closely monitor the controls and actions taken to correct weaknesses as they are identified. The Head of Group Finance reports directly to the Group Chief Financial Officer, who is responsible for the overall financial control and reporting.

Standards of disclosure increased significantly, and internal governance structures and roles were reviewed and improved, where necessary, to reflect best practices. This occurred at Board and management levels. The Internal Audit function is governed by an Internal Audit Charter, which is annually reviewed and approved by the Audit and Risk Committee.

Internal Audit

AfroCentric Internal Audit is an independent function governed by an Internal Audit Charter which is approved by the Audit and Risk Committee and is reviewed annually. The Internal Audit Charter defines the role, organisational status authority, responsibilities and scope of the Internal Audit Activity (IAA). It also includes the principles underlying the realisation of the objectives of the IAA and the translation thereof into operational activities. The Chief Audit Executive reports at each Audit and Risk Committee meeting and has a direct reporting line to its Chairperson. Internal Audit operates independently of executive management and is not authorised to perform any operational duties in the Group. For administrative purposes, the Chief Audit Executive reports to the Group Chief Executive Officer. The Internal Audit team is fully capacitated with 21 professionals who collectively possesses the knowledge, skills, experience, tenure and other competencies to fulfil its mandate effectively and competently. Specific specialist skills and additional resources are obtained from third parties.

The vision of Internal Audit is to add proactive, objective and independent value and assist with the Group's business strategy and objectives while upholding the core values of mutual respect, accountability, empowerment, integrity, innovation, accessibility, commitment, efficiency, proactivity and professionalism. According to its core values, AfroCentric's Internal Audit endeavours to comply with the highest professional standards of integrity, sound practice and transparency to build trust and maintain the interests of client schemes and shareholders at the forefront of our corporate agenda.

Internal Audit assists AfroCentric to accomplish its strategic objectives by bringing a systematic, disciplined approach to evaluating and improving the effectiveness of risk management, control, and governance processes. This is achieved by managing the significant risk exposures and control issues, corporate governance issues and other matters. These detailed reports of specific results and their action plans are available on request from the Audit and Risk Committee. Detailed reports on all audit projects are distributed to executive management. Detailed management action plans to audit findings are communicated.

The Institute of Internal Auditors (IIA) standards require an external quality assessment on the IAA of an entity at least every five years. AfroCentric Internal Audit was subjected to an independent external quality assessment in August 2016. The overall rating as assessed by the IIA was 'Generally Conforms', and thus the function is entitled to use the 'in accordance with the Standards' statement in their internal audit reports. IAA aims to meet and exceed the IIA Standards and Code of Ethics.

Information and security governance

IT governance is defined in King IV as the "effective and efficient management of IT resources to facilitate the achievement of corporate objectives". It exists to inform and align decision-making for IT planning, policy and operations to meet business objectives and to ensure that risks are managed appropriately.

The AfroCentric Group applies the principles of King IV in its governance frameworks, as far as it is appropriate, and has regard to the requirements of Cobit, ISO 27001, ITIL and ISO 38500:2015 in the governance of IT. The Group adopted a formal IT Governance Framework to standardise IT practices across the organisation and formalise the good governance requirements stipulated in King IV.

In addition to applying due governance across our IT areas, within our Governance Framework, we have an extensive review of our ICT controls, (ISAE3402) which is done by external auditors; the report of which is shared with our clients as further assurance. The protection of our data is our highest priority.