Corporate governance

Our objective of being a world-class, responsible company requires us to conduct our business in compliance with international leading practices on company governance. Issues such as transparency, accountability, and business ethics are key to achieving our objectives. We are proud of our reputation and need to ensure that we continue to be held in high esteem around the world.

Corporate governance is aimed at promoting greater corporate accountability, transparency and stakeholder confidence and the Board of Directors subscribes to these principles.

It is the system by which Rössing is directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the company, such as the Board of Directors, managers, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on company affairs.
The Board of Directors executes the mandate it receives from the shareholders to ensure that Rössing is a world-class and responsible company by putting an executive team in place with certain targets to be achieved.

The Board is responsible for ensuring that the company is run in accordance with its mandate as described in Rössing's Articles of Association, and that the various stakeholder interests are balanced and receive the required attention.

The company is committed to being a good corporate citizen and a world-class leader in the Namibian mining industry. While the non-executive directors acknowledge the need for their independence, they recognise the importance of good communication and close cooperation with executive directors and other stakeholders.

Code of business conduct

We are committed to our code of business conduct, covering the following areas:

• Our reputation for acting responsibly plays a critical role in our success as a business and our ability to generate shareholder value.
• Our reputation stems from our four core values, which define the essence of who we are and who we will be: Accountability, Respect, Teamwork and Integrity.
• These values are expressed through the principles and standards of conduct set out in The way we work. They define the way we manage the economic, social and environmental challenges of our operations and are important to fulfilling our commitment to contribute to sustainable development.
• Actions speak louder than words. The behaviour of each and every one of us will influence how well we perform and how the world views us. The way we work is our conscience.
• Our conduct will bring about a success that we can all be proud to share - and one that everyone notices.
• By working according to our values, we will help sustain long-term business success by encouraging more effective relationships and stimulating deeper contributions to our local communities.

The Board is responsible for cultivating and promoting a corporate culture permeated by integrity. The objective of this code of business conduct is to enable employees to always act according to defined ethical principles. This code commits all employees to the highest standards of integrity in dealing with all stakeholders.

All the company's stakeholders are required to, at all times, familiarise themselves with this code and to comply with it, as it is regarded as a strategic business imperative and a source of competitive advantage.

The Board of Directors

The company has a unitary board. The Chairman is elected by the members of the Board from among their ranks and is currently non-executive, but not yet independent, as the current Chairman retired from Rössing as General Manager: Corporate Services in 2009. It is an acceptable norm that the Chairperson only becomes truly independent from Rössing's executive and shareholders three years after his retirement.

The roles of the Chairman and Managing Director are separate and distinct, and the current number and stature of the independent directors serving on the Board ensures that enough independence is applied when making significant decisions.

The Board of the company is comprised of 17 directors: 5 executive directors and 12 non-executive directors. Of the non-executive directors, 4 are independent. The Board seeks and assesses the independence of the directors through the Nominations and Remuneration Committee. The Board of Directors believes that it is constituted of people with the appropriate mix of skills, experience and diversity.

The Board of Directors currently consists of the following members as at 31 December 2010:

Functions of the Board

The Board is responsible and accountable for providing effective corporate governance, direction and control of the company.

The directors have a duty to exercise leadership, entrepreneurship, integrity and judgment based on transparency, fairness, accountability and responsibility. All directors subscribe to the code of business conduct.
A Board Charter governs the working of the Board of Directors and its performance is monitored by the Nominations and Remuneration Committee.

In terms of the memorandum of association, the Board is responsible for appointing the Managing Director of the company. According to the Board Charter, the Board is responsible for adopting a corporate strategy, major plans of action, major policies as well as monitoring operational performance. This includes identifying risks which impact on the company's sustainability and monitoring risk management, internal controls, compliance management, corporate governance, business plans, key performance indicators, as well as non-financial criteria and annual budgets.
The Board is also responsible for managing successful and productive stakeholder relationships. All directors carry full fiduciary responsibility and owe a duty of care and skill to the company.

Appointment

The appointment of directors is set out in the Nominations and Remuneration Committee Charter and ratified at the annual shareholder's meeting by shareholders that are present in person or by proxy. Based on recommendations of the committee, the Board of Directors approve the appointment of directors in compliance with regulatory requirements.
All the directors are periodically subject to retirement by rotation and re-election, in accordance with the memorandum of association.

The Nominations and Remuneration Committee takes cognisance of the need to ensure that the Board's composition is appropriately diversified in terms of different experience, skills, diversity and demographics to serve the interest of the company and its stakeholders.

Board meetings

The Board meets quarterly, with additional meetings convened as and when necessary. The table below shows the attendance of directors at Board meetings as well as board committee meetings:

The 15 per cent shares that the Iranian Foreign Investment Company has in the company were acquired during the Iran pre-revolution days when the Shah was still in power. During the year under review, the United Nations Security Council Resolution 1929 was passed, which prohibits UN member countries, of which Namibia is one, from allowing Iran to acquire an interest in a commercial activity involving uranium mining or obtain access to nuclear technology. Messrs. SN Ashrafizadeh and AV Kalantari did not attend the meetings since February 2010 in compliance with the UN Resolution 1929 requirements.

Directors' development

Training and development of directors is conducted through a formalised process, which takes into account performance evaluation of the directors and the Board as a whole.

Directors undergo a formalised induction programme at appointment, as well as continuing professional development. Training sessions were conducted for directors during the past year. These sessions covered important topics, such as recent developments in corporate governance, updates on legislative developments, as well as relevant developments in the company's areas of operation. Directors are also at liberty to propose training topics at their discretion.

Directors' evaluation

The Board of Directors, through the directors' Affairs and Governance Committee, conducts an annual performance evaluation of the Board, committees and individual directors on the various functions as set out in charters. The Executive Director's performance, both as an executive and as a director, is evaluated against set objectives.
Special purpose vehicles

The company has established two special purpose vehicles, which are managed independently from Rössing by their own board of trustees, on which Rössing Board members are represented, but are in the minority. These are The Rössing Foundation and the Rössing Environmental Rehabilitation Fund.

The Transformational Economic and Social Empowerment Framework (TESEF) Committee was established in 2009 to review and propose strategies to ensure our compliance with Government's TESEF policy statements.
The Rössing Foundation was established in 1978 by Rössing Uranium Limited through a Deed of Trust to implement and facilitate its corporate social responsibility activities within the communities of Namibia.

Board committees

The Board sets up various committees to assist it in achieving its mandate. These committees enable the Board to make informed decisions by dividing the workload among the members, allowing them to focus more intensively on different aspects of the business, and to debate the issues raised more intensively, based on their areas of expertise. The committees then take proposals and recommendations to the Board for approval.

The Audit Committee reviews the effectiveness of the risk management process, the accuracy of external reporting, and manages the effectiveness of assurance activities. It is also the custodian of the company's standards of business conduct and ethics, and ensures compliance with all the relevant laws of the countries in which we operate.
The Sales Committee reviews the pricing policy and market condition assumptions used in the uranium marketing strategy.

The Nominations and Remuneration Committee manages the recruitment process of directors, reviews the succession plans of directors, reviews the effectiveness of Board Members, and determines the remuneration of the Board Members.
The trustees of the Rössing Environmental Rehabilitation Fund review the closure plans and trust funds put aside for eventual rehabilitation of the mine site.

All committees have formal charters or terms of references and report to the Board of Directors. They are chaired by non-executive directors, who are in the majority.

Financial statements

The directors are responsible for monitoring and approving the financial statements in order to ensure that they fairly present the company's affairs and the profit or loss at the end of the financial year. The independent auditors are responsible for expressing an opinion on the fairness with which these financial statements depict the financial position of the company. The financial statements are prepared by management in accordance with the International Financial Reporting Standards (IFRS) and in the manner required by the Namibian Companies' Act. They are based on appropriate accounting policies that have been consistently applied, and which are supported by reasonable and prudent judgements and estimates.

External auditor independence

The group's annual financial statements were audited by the independent auditors, PricewaterhouseCoopers. The company believes that the auditors observed the highest level of professional ethics, and has no reason to suspect that they did not act independently from the company. The Audit and Risk Committee confirmed the independence of the external auditors for the reporting period.

Company secretary

The company secretary, GD Labuschagne, is suitably qualified and has access to the company's resources to effectively execute her duties. She provides support and guidance to the Board in matters relating to governance and compliance practices across the company. All directors have unrestricted access to the company secretary.

Risk report

Risk management is a fundamental part of the company's business. This is achieved by keeping risk management at the centre of the company's activities, and by introducing a culture in which risk management is embedded in the everyday management of the business. The Board acknowledges its overall responsibility for the process of risk management, as well as for reviewing its effectiveness. Executive management is accountable to the Board for designing, implementing and monitoring the process of risk management, as well as integrating it with the day-to-day activities of the group. The company remains committed to the objective of increasing shareholder value by developing and growing business that is consistent with its risk appetite, and through building more effective risk management capabilities.

Protection of our reputation

A strong corporate reputation is a valuable asset to the company. By managing and controlling the risks incurred in the course of conducting business, the company protects its reputation. This means avoiding large concentrations of exposures of all kinds, as well as business deals that are sensitive for tax, legal, regulatory, social, environmental or accounting reasons.

Credit risk

Credit risk represents the risk of loss to the company as a result of a counter party being unable or unwilling to meet its contractual obligations. Credit risk is a critical risk to the business, and management takes the necessary steps to prevent this risk from materialising. We are in the fortunate position that, to date, no client has ever defaulted on their obligations.

Liquidity risk

Liquidity risk is the risk that the company will not be able to meet all payment obligations as liabilities fall due. During the coming period, as Rössing establishes itself as a new mine for the future, a high level of investment will be made. This will place a heavy burden on the company's cash resources, which are carefully monitored to ensure that all stakeholders are timeously paid and that cash from customers is timeously received in order to honour our commitments.

Operational risk

Operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. Operational risk is inherent in the company's operations. The goal is to manage this risk to acceptable levels and to minimise unexpected events. Senior management is responsible for identifying and mitigating operational risks.

Business resilience and recovery risk

The company has a comprehensive emergency response programme in place to react to any emergency that may occur on site. The process for enhancing our capability to support the availability of systems, restore technology platforms, resume operations and deliver core business processes in the event of problems is currently under review and should be completed in 2011.

Information risk management

Changes to IT systems can introduce risk if not properly planned, assessed and implemented with care.

Reputational risk

Reputational risk is the risk caused by damage to the company's or any of its stakeholders' reputation, name or brand. Such damage may result from a breakdown of trust, confidence or business relationships, and can arise if other risks emerge without being decisively dealt with.

Solvency risk

Insolvency is the chronic condition of being unable to pay one's debts in full. An insolvent company cannot pay its debts. It must either be liquidated or rescued. The Board and Risk Committee reviews the solvency and going concern of the company on a regular basis.

Market risk

Market risk is defined as the risk of losses in on and off balance sheet positions arising from movements in market prices. Rössing is exposed to exchange rate movement risks, U₃O₈ market price risks and, to a lesser degree, interest rate risks. These risks are a top priority for the directors, and are as such analysed on a continuous basis in order to ensure that the risks remain within the tolerance levels set.

Internal audit

The company's internal audit function performs an independent appraisal activity with the full cooperation of the Board and management. It has the authority to independently determine the scope and extent of work to be performed. Its objective is to assist executive management with the effective discharge of its responsibilities by examining and evaluating the company's activities, resultant business risks and systems of internal control. Its mandate requires it to bring any significant control weaknesses to the attention of management and the Audit and Risk Committee for remedial action.

The internal audit function for the year was outsourced to Ernst & Young. Internal auditors report functionally to the company's Audit and Risk Committee, and administratively to the company secretary.

Internal control

Internal control comprises methods and procedures implemented by management to ensure:

• Compliance with policies, procedures, laws and regulations;
• Authorisation by implementing the appropriate review and approval procedures;
• Reliability and accuracy of data and information: Information used in the decision making process at Rössing needs to be accurate, timely, useful, reliable and relevant;
• Effectiveness and efficiency: All operations at Rössing need to add value and be effective and efficient, with the most economical use of resources, which is accomplished through the continuous monitoring of goals: "That which is measured is controlled"; and
• Safeguarding of assets: Assets are protected from theft, misuse, use for fraudulent purposes and/or destruction.

 

The Rössing Mountain, a well-known landmark between the mine and Swakopmund.