Brikor : Financial Results - Year Ended 28 February 2022

Brikor Limited

CORPORATE

GOVERNANCE

REPORT

2022

THE SPIRIT OF BRICKMAKING

CONTENTS

1. Governance structure and framework
2. Brikor's application of governance principles in terms of King IV™

1. Leadership
2. Organisational ethics

1. Responsible corporate citizenship
2. Strategy and performance

4 Reporting

1. Primary role and responsibilities of the governing body
2. Composition of the governing body

9 Committees of the governing body

1. Evaluation and performance of the governing body
2. Appointment and delegation to management
3. Risk governance
4. Technology and information governance

1. Compliance governance
2. Remuneration governance

1. Assurance
2. Stakeholders

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CORPORATE GOVERNANCE REPORT

Brikor complies with the principles of King IV™, as applicable to the Company, and the mandatory corporate governance requirements of the JSE. During the reporting period, Brikor applied the principles of King IV™, as disclosed in this report, for the fourth time.

GOVERNANCE STRUCTURE AND FRAMEWORK

Risk tolerance/appetite

BOARD OF DIRECTORS

Reporting

Company

Secretary

AUDIT AND RISK COMMITTEE		REMUNERATION		NOMINATION		SOCIAL AND ETHICS
	COMMITTEE		COMMITTEE		COMMITTEE
Combined assurance
framework

AUDITRISK

CEO		Executive Committee

Functional	Administrative

Internal

Control

IT Governance

IT business systems

• Risks
• Standards
• Disaster recovery

Risk

managementEthics and

governance

• Code of Business Ethics and Conduct

• Training and awareness

• Whistle-blowing line

• Fraud and irregularities

Assurance	Consulting		Risk		Sustainability
	management
				•	Operational risk/opportunity	Reporting Global Reporting Initiative
				•	Tactical risk/opportunity	Combined assurance plan
				Projects:
				•	Strategic risk/opportunity
•				•	Project risk/opportunity	•	Procurement practices
Achievement of Group	•	Carbon reduction
•	strategy and goals			•	BBBEE
Safeguarding of assets			•	Training and education
•	Compliance with laws,			•	Diversity
•	regulations and policies			•	Non-discrimination
Reliability of information			•	Local communities
•	Effective and efficient

operations

			•	Compliance
			Companies Act
Environmental, health and safety	•	Consumer Protection Act	Compliance framework
•	Protection of Personal Information Act
			• Occupational Health and Safety Act
• Third-party assurance	•
•	JSE	Legal
• Group safety, health and	•	King IVTM	•	Policies and procedures
environment function	•	Income Tax Act	•	Code of Business Ethics and Conduct
			•	BBBEE	•	Delegation of authority
			•	Environmental legislation
			•	Declaration of interests
			•	Anti-corruption legislation

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Corporate governance report

continued

BRIKOR'S APPLICATION OF GOVERNANCE PRINCIPLES IN

TERMS OF KING IV™

The directors endorse and accept full responsibility for the application of the principles outlined in the King IV Report on Corporate Governance for South Africa 2016 (King IV™) to ensure that effective corporate governance is practised consistently throughout the Group. The Group is committed to the practices underlying the principles, giving effect to the principles, and leading to the governance outcomes of an ethical culture, good performance, effective control and legitimacy.

LEADERSHIP

Principle 1: The governing body should lead ethically and effectively.

The Board of Directors of Brikor exercises effective leadership, with directors adhering to their ethical and fiduciary duties. The directors have the necessary experience, expertise and competence and act ethically in discharging their responsibilities to provide strategic direction and control of Brikor, as provided for in the Board Charter and the Memorandum of Incorporation of Brikor.

The Board Charter includes the policies and practices of the Board in respect of matters such as directors' dealings in the securities of the Company and declarations of conflicts of interest, in accordance with the JSE Listings Requirements and the Companies Act, respectively, which declarations are tabled at each Board meeting and untenable conflicts are identified and acted on.

Directors, executives and senior employees are prohibited from dealing in the Company's securities during certain prescribed periods and the Company Secretary regularly informs the Board of insider trading legislation and advises them of closed periods. A report of directors' dealings in Brikor's shares is tabled at each Board meeting and disclosed in terms of the JSE Listings Requirements.

Brikor's strategy, which is based on an ethical foundation, is driven and approved by the Board to ensure that it supports a sustainable business. The Board acts in the best interests of the Group by taking into account the Group's short-, medium- and long-term impact on the economy, environment, society and its stakeholders.

Risks are considered, and the Board oversees and monitors management's implementation and execution of the strategy, ensuring accountability for the Group's performance.

Through the governance framework, which includes detailed reporting to the Board and its Committees, a decision-making authority framework and a system of assurances on internal controls, the Board exercises control.

Planned areas of future focus: The Board continues to adopt a more stakeholder-inclusive approach in the execution of its governance role and responsibilities.

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ORGANISATIONAL ETHICS

Principle 2: The governing body should govern the ethics of the organisation in a way that supports the establishment of an ethical culture.

The Board determines and sets the tone of Brikor's values, including principles of ethical business practice and human rights considerations and, supported by the Social and Ethics Committee, approves Brikor's Code of Business Ethics and Conduct and considers the requirements for the Group to be a responsible corporate citizen, based on responsibility, honesty, fairness and respect.

The implementation and execution of the Code of Business Ethics and Conduct has been delegated to management with the Board, assisted by the Social and Ethics Committee, providing ongoing oversight of the management of ethics by monitoring the activities with regard to ethics and ensuring it is integrated into the operations of the Group.

The ethics programme, including the whistle-blowing mechanism and management of the independent and anonymous disclosure of information gathered from whistle-blowers to detect breaches of ethical standards, as well as ongoing effort to create awareness, detect and resolve ethical violations, together with the provision of training on anti-corruption, bribery and anti-competitive behaviour, contribute to a strong ethical foundation.

A separate Code of Business Ethics and Conduct has been developed for suppliers. In support of the Group's ethics programme, a Whistle-Blowing Policy has been adopted by the Board, which Policy outlines the whistleblowing procedures as well as the protection of whistle-blowers.

Planned areas of future focus: Brikor's Code of Business Ethics and Conduct would form part of future agreements with customers, suppliers and other relevant stakeholders.

RESPONSIBLE CORPORATE CITIZENSHIP

Principle 3: The governing body should ensure that the organisation is and is seen to be a responsible corporate citizen.

The Board, assisted by the Social and Ethics Committee and supported by the Executive Committee, oversees and monitors how the operations and activities of the Group affect its status as a responsible corporate citizen. Through stakeholder engagement and collaboration, Brikor has committed to understanding and being responsive to the interests and expectations of stakeholders and to partnering with them in finding solutions to sustainability challenges.

Oversight and monitoring of activities and outputs that affect Brikor's status as a responsible corporate citizen include:

• Workplace (employment equity; fair remuneration; health and safety; training and development of employees);
• Economy (economic transformation; prevention, detection and response to fraud and corruption);
• Society (consumer protection; community development; protection of human rights); and
• Environment (rehabilitation programmes).

The Group has a zero-tolerance approach policy to corruption. The OECD recommendations regarding corruption are captured in the Group's Fraud Prevention Policy and are also addressed in the Code of Business Ethics and Conduct.

The Audit and Risk Committee monitors risk and considers and investigates any allegations on fraud, bribery and corruption. There were no such instances during the reporting period.

The Board, through the Social and Ethics Committee, considered measures to monitor organisational ethics and methods by which to address outcomes. Brikor's loyal customer base and employees illustrate that the Company is an ethical organisation.

Planned areas of future focus: A responsible and transparent Tax Policy will be developed for the Group.

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