Corporate governance

 
Remuneration of directors
Remuneration of directors The remuneration philosophy for executive directors is largely aligned with that of other senior members of the company - a fixed annual salary and a component of performance linked remuneration. Whilst, at a subsidiary level, senior management are rewarded through participation in a fixed percentage of profitability of the respective business unit, by way of a profit pool or direct shareholding in the company, the payment of bonuses to executive directors is discretionary and determined annually by the remuneration committee. Remuneration consists of two elements: 
 
salary: it is intended that salaries are market related and comprise compensation for a director’s skill, qualification and experience. Salaries are regularly benchmarked. 
discretionary bonus: bonuses are performance based and take account of the performance of the business, both financial and strategic, as well as the performance of the individual director. 
 
Whilst salary and bonus form the basis of the remuneration for executive directors, equity ownership with its commensurate risks and rewards, does serve to align the long-term interest of executive directors with that of the group’s shareholders. Executive directors have in the past participated in a deferred purchase scheme in shares in Peregrine Holdings Ltd. The group is currently in the process of formulating and implementing a new deferred purchase scheme. Non-executive directors receive fixed fees for their services as directors of the board and as members of board committees. The remuneration committee proposes fees for non-executive directors, which are agreed by the board. The fees are benchmarked annually. Executive and non-executive remuneration for the current and previous financial years is disclosed in note 4 to the financial statements.

Directors’ shareholding
On 31 March 2009, the directors held in aggregate 37 696 016 Peregrine shares (2008: 31 108 599), representing 16.5% (2008: 13.6%) of the issued share capital of the company. The direct and indirect beneficial interests of directors in the company are set out below.

As at year end, the directors had no non-beneficial shareholdings, direct or indirect, in the company other than Sean Melnick in his capacity as trustee of the Citadel Staff Share Trust, which trust holds 2 012 792 (2008: 2 012 792) shares and Ethan Dube in his capacity as trustee of the END Trust and as a director of Vunani Capital (Pty) Ltd in respect of 15 027 210 (2008: 15 027 210) shares.

As reported in the SENS announcement on 9 June 2009, Jan van Niekerk acquired 58 463 shares, increasing his beneficial interest in the company to 679 934 shares. No other changes have occurred in any of the directors’ shareholdings between the end of the financial year and the date of this report. 
 
  Directors’ direct and indirect beneficial interests 
Direct beneficial 2009
Indirect beneficial
Total % of issued share capital Direct beneficial 2008
Indirect beneficial
Total % of issued share capital
SA Melnick 881 33 510 898 33 511 779 14.7 881 26 444 952 26 445 833 11.6
P Goetsch 17 919 2 775 911 2 793 830 1.2 17 919 2 775 911 2 793 830 1.2
KA Betty1 - - - - 1 100 000 - 1 100 000 0.5
JC van Niekerk2 - 621 471 621 471 0.3 - - - -
LN Harris 436 376 - 436 376 0.2 436 376 - 436 376 0.2
MY Sibisi - 332 560 332 560 0.1 - 332 560 332 560 0.1
BC Beaver - - - - - - - -
S Stein - - - - - - - -
E Dube - - - - - - - -
Total 455 176 37 240 840 37 696 016 16.5 1 555 176 29 553 423 31 108 599 13.6
1resigned with effect from 31 March 2009;    
2appointed with effect from 1 April 2009.
 
Company secretary
The functions of the company secretary are currently overseen by the group’s legal division. The division is responsible for ensuring that board procedures and the relevant regulations are fully observed. With the assistance of the group’s corporate sponsors the directors are provided with ongoing guidance on governance, compliance and their fiduciary responsibilities. All directors have access to the advice and services of this division.

Dealing in securities
In line with the JSE’s Listing Requirements, dealings in Peregrine shares by the directors of the Holdings board, the company secretary, as well as the directors of subsidiary companies require advance approval from the chairman, CEO or deputy CEO. Once executed, appropriate disclosure is made on the Securities Exchange News Service (SENS) in terms of the Listings requirements.

These conditions apply to shares held directly, indirectly, beneficially or non-beneficially and also apply to any associate of the directors as defined in the JSE Listing requirements.

The board has implemented a formal trading policy prohibiting directors, officers and employees of the company from dealing in Peregrine Holdings Ltd shares during the company’s closed periods, as prescribed by the JSE. These closed periods start at the close of the annual and interim reporting period and last until the financial results are announced on SENS and include periods during which the company is trading under a cautionary announcement.

Where applicable appropriate personal account trading rules are in place within the subsidiary businesses.

Auditor independence
The group financial statements have been audited by PKF (Jhb) Inc. The company has no reason to believe that the auditors have not acted with unimpaired independence at all times. Details of fees paid for audit and non-audit services are disclosed in the financial statements.

Ethics
The group has a documented code of conduct for staff designed to provide guidance as to the ethical conduct of staff in all areas, appropriate policies around the safeguarding of assets and information and the appropriate corrective measures to enforce these policies.

Sustainability
Sustainability is synonymous with good corporate governance and Peregrine is committed to adopting practices that contribute to the long-term sustainability of the business and the broader environment. A sustainability report is available on the group’s website: www.peregrine.co.za

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