Mondi Limited

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Corporate governance statement Dual listed company structure Mondi operates under a dual listed company (DLC) structure, which requires compliance with the corporate and accounting regulations of South Africa and the UK. Mondi Limited and Mondi plc (together ‘the Mondi Group’ or ‘Mondi’) have separate corporate identities and separate stock exchange listings. Under the DLC structure, any ordinary share held in either Mondi Limited or Mondi plc gives the holder an effective economic interest in the whole Mondi Group. Compliance statement Mondi Limited has complied throughout the year with the principles contained in the South African King II Code of Corporate Practices and Conduct, save that Cyril Ramaphosa, joint chairman, was not considered independent upon appointment. The South African King III Code of Corporate Governance Principles, published in September 2009, is effective for financial years commencing on or after 1 March 2010. Although the Company is not therefore required to report on 2 Annual report and accounts 2010 its compliance with King III until its 2011 annual report, the board has already reviewed the requirements and has applied certain of the principles that are reported on below. Chairmen and boards of directors Pursuant to the DLC structure under which Mondi operates, the boards of Mondi Limited and Mondi plc are identical (together ‘the Boards’). The Boards manage Mondi as if it were a single unified economic enterprise and, in addition to their duties to the company concerned, have regard to the interests of the ordinary shareholders of both Mondi Limited and Mondi plc in the management of the Mondi Group. The Boards have defined their responsibilities and have clearly defined the matters reserved for decision by the Boards. As at 31 December 2010 there were nine directors: the joint chairmen, three executive directors and four independent nonexecutive directors. There is a strong mix of skills and industry experience, particularly in Europe and South Africa, locations important to Mondi’s operations. Mondi Limited DLC board board (six Directors Position (one meeting) meetings) Cyril Ramaphosa Joint chairman 1 6 David Williams Joint chairman 1 6 David Hathorn Chief executive officer 1 6 Andrew King Chief financial officer 1 6 Colin Matthews Non-executive director 1 6 Imogen Mkhize Non-executive director 1 6 John Nicholas Non-executive director 1 6 Peter Oswald Chief executive officer, Europe & International Division 1 6 Anne Quinn Senior independent non-executive director 1 6
Appointments to the Boards are subject to approval by the Boards as a whole, having first considered the recommendations of the DLC nominations committee, and take place in accordance with a formally adopted nominations policy. On appointment each non-executive director receives letters of appointment from each of Mondi Limited and Mondi plc setting out, among other things, their term of appointment, the expected time commitment for their duties to Mondi and details of any DLC committees of which they are a member. Non-executive directors are initially appointed for a three-year term after which their appointment may be extended for a second term subject to mutual agreement. Joint chairmen and chief executive officer Mondi has joint chairmen, Cyril Ramaphosa and David Williams, with the chief executive officer role held separately by David Hathorn. The division of responsibilities between the joint chairmen and the chief executive officer has been clearly defined and approved by the Boards. David Hathorn, chief executive officer, does not hold any directorships external to Mondi. Whilst David Williams was independent upon appointment, Cyril Ramaphosa was not considered independent upon appointment in view of his existing connection with Mondi as chairman of the Shanduka Group, which has shareholdings in Mondi Shanduka Newsprint (Proprietary) Limited and Mondi Packaging South Africa (Proprietary) Limited (see page 80). Notwithstanding this, Mondi benefits greatly from his considerable knowledge and experience, particularly of the South African business environment, and the Boards firmly believe that this justifies his appointment. Senior independent director Anne Quinn is the senior independent director providing support to the joint chairmen. During the year she has chaired a meeting of the non-executive directors at which the performance of the joint chairmen was considered. She is also available to shareholders should they have any concerns that contact through other channels has failed to resolve or for which such contact may be inappropriate. Board committees The DLC committees (which are single committees for both Mondi Limited and Mondi plc, acting in the combined interest of both entities), to which the Boards delegate specific areas of responsibility as described below, have authority to make decisions according to their terms of reference. Each committee is empowered, through its terms of reference, to seek independent professional advice at Mondi’s expense in the furtherance of its duties. Membership of each committee is kept under review and, in particular, will be considered when each committee undertakes its annual evaluation. Each committee reviews its terms of reference on an annual basis. DLC audit committee DLC audit Committee committee member (four Members since meetings) Colin Matthews May 2007 4 John Nicholas (chairman) October 2009 4 Anne Quinn May 2007 4 The DLC audit committee operates on a Group-wide basis. The committee has responsibility, among other things, for monitoring the integrity of the Mondi Group’s financial statements and reviewing the results announcements. It also has responsibility for reviewing the effectiveness of the Mondi Group’s system of internal controls and risk management systems. An effective internal audit function has been established, which formally collaborates with the external auditors to ensure efficient coverage of internal controls and is responsible for providing independent assurance to the DLC executive committee and Boards on the effectiveness of the Company’s risk management process. All members of the committee are independent non-executive directors. They each have relevant financial, accounting or similar experience from current and past employment. The Boards consider each member to have appropriate knowledge and understanding of financial matters, sufficient to enable them to consider effectively the financial and accounting issues that are presented to the committee. The Boards consider John Nicholas, DLC audit committee chairman, to have specific recent and relevant financial experience. He is a chartered accountant and a member of the UK Financial Reporting Review Panel. He was formerly the group finance director of Tate & Lyle plc and is currently the audit committee chairman of Ceres Power Holdings plc, Hunting PLC and Rotork p.l.c.. The DLC audit committee oversees the relationship with the external auditors; is responsible for their appointment, reappointment and remuneration; reviews the effectiveness of the external audit process; and ensures that the objectivity Mondi Limited 3
Page 1 and 2: Mondi Limited Annual report and acc
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Shareholders’ information Shareho
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Mondi Limited

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