Annual Report Harel Frère Ltd 2006 - Investing In Africa

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50 corporate governance report (cont'd) Environment and Strategy Risks These arise when there are environmental forces that could either put a company out of business or significantly change the fundamentals that drive its overall objectives and strategies. The assessment of the environment and strategy risks also included : Regulatory risks : Changes in regulations and actions by the local regulators can result in increased competitive pressures and significantly affect a company's ability to efficiently conduct business. Industry risks : The industry may lose its attractiveness due to changes in : • key factors for competitive success within the industry, including significant opportunities and threats; • capabilities of existing and potential competitors; and • group's strengths and weaknesses relative to present and future competitors. Operational risks : Operational risks are risks of loss resulting from inadequate or failed internal processes and procedures, human error or system failure. They also include legal risk. Human resources risks The personnel responsible for managing and controlling the organisation or a business process may not possess the requisite knowledge, skills and experience needed to ensure that critical business objectives are achieved and significant business risks are reduced to an acceptable level. Financial risks These may be defined as the risk that cash flows and financial assets are not managed cost-effectively to : • maximize cash availability; • reduce uncertainty of currency, interest rate, credit and other financial assets; and • move cash funds quickly and without loss of value to wherever they are needed most. Information technology risks may not be operating as intended, thereby compromising the integrity and reliability of data and information and exposing significant assets to potential loss or misuse, or exposing the group’s ability to sustain the operation of critical processes. Dividend policy No formal dividend policy has been determined by the Board. However, having regard, inter alia, to group performance, capital expenditure and debt servicing requirements, investment needs as well as the uncertainties facing the group, the Board attempts to distribute a yearly dividend which, under normal circumstances, should remain sustainable in the medium to long-term. Remuneration policy All directors receive a Board remuneration consisting of a fixed fee, as well as an additional fee for each Board meeting attended by them. The Chairperson is remunerated in a similar manner, but at higher rates. Changes therein are submitted to the Annual Meeting for approval. In addition, directors who are Board Committee members receive attendance fees for such meetings, while chairpersons are again remunerated at a higher rate. Committee fees are approved by the Board. As regards executive directors, the remuneration policy aims to : • align executive remuneration with the group's business objectives and shareholder value, • attract, retain and motivate high calibre employees capable of achieving the group’s objectives, • motivate executives to achieve ambitious performance levels, and • recognize both corporate and individual performance. The overall remuneration of executive directors comprises a base salary, pension and other benefits and a nonpensionable annual performance bonus, in addition to the Board remuneration described above. The proportion of variable pay to fixed pay has been increased over the past few years so as to better align interests of these directors with those of the group and to provide an added incentive to respond to the challenges facing the group. The Corporate Governance Committee has retained outside consultants to provide independent market information and advice relating to executive remuneration. The information technologies used in the group's businesses Harel Frères Limited Annual Report ‘06
51 corporate governance report (cont'd) Directors' remuneration for the year ended December 31, 2006 is set out below. Remuneration from the company Remuneration from subsidiaries Remuneration from companies on which director serves as representative of the company MUR ‘000 MUR ‘000 MUR ‘000 Jocelyn de Chasteauneuf 349 - - Philippe de Chasteauneuf 988 190 - Jean Desmarais 179 - - Jean de Fondaumière 202 - - Dominique de Froberville 172 51 - Alexis Harel 179 2,587 25 Henri Harel 3,862 - 327 Joseph Marc Harel 46 - - Jean Hugues Maigrot 505 - - Cyril Mayer 10,686 - 418 Jacques de Navacelle 342 - - Charles Edouard Piat 49 - - Guillaume Raffray 169 - - Alain Vallet 179 3,237 39 Share information Share option plan Information relating to the share distribution and its Stock Exchange performance is set out on pages 8 and 9. Dates of important events are also noted. The group has no share option plan. Sustainability reporting Donations The aggregate amounts of political and other donations made during the year are shown on page 56. The policies and practices of the group regarding ethics, health, safety and environmental issues as well as social responsibility are detailed on pages 52 and 53. Related party transactions Related party transactions are disclosed in aggregate in Note 37 to the Financial Statements. HF Administrative Services Ltd Secretary However, during the year, there were no material transactions between the company or any of its subsidiaries or associates and a director, chief executive, controlling shareholder or companies owned or controlled by a director, chief executive or controlling shareholder. May 16, 2007 Management agreements The main management agreements with third parties are disclosed in Note 37(iv) to the Financial Statements. Harel Frères Limited Annual Report ‘06
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Page 11 and 12: 11 group value added chart year end
Page 13 and 14: 13 board profile Jean Hugues Maigro
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Page 54 and 55: 54 statement of directors' responsi
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Page 58 and 59: alance sheets 58 december 31, 2006
Page 60 and 61: 60 statement of changes in equity y
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Page 64 and 65: 64 cash flow statements year ended
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directors of subsidiary companies 1
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proxy / casting postal vote form ha
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Annual Report Harel Frère Ltd 2006 - Investing In Africa

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