Governance

Our Board of Directors is committed to strong corporate governance practices that promote and protect the long-term interests of our shareholders.

Learn more about our directors and the management team:

The board endorses the King IV Report on Governance for South Africa 2016 (King IV) and recognises the need to conduct its business with integrity and in accordance with generally accepted corporate practices.

Following the conversion of the company from a private to a public company listed on the JSE Limited (JSE) in 2018, the group continues to proactively take steps to ensure full compliance with the JSE Listings Requirements and the principles of King IV.

Governance Structure

The board has five committees in place.

  • Audit and risk committee
  • Remuneration committee
  • Nomination committee
  • Social and ethics committee
  • Investment and strategy committee

The Board

Libstar has had a board in place since 2005. To align with best practice and King IV compliance, the board was restructured in March 2018 ahead of its listing.

The board is responsible for ensuring that the company complies with all its statutory obligations specified in the memorandum of incorporation of the company, the SA Companies Act, the JSE Listings Requirements and other regulatory requirements.

An effective compliance framework is in place, with the board ensuring the integrity of its financial reporting and risk management, together with timely and transparent disclosure to shareholders.

Internal Control Systems

We have implemented systems of internal control which are designed to detect and minimise the risk of fraud, potential liability, loss and material misstatement. These systems also provide reasonable, but not absolute, assurance regarding compliance with statutory laws and regulations and the maintenance of proper accounting records.

The group makes use of various third-party software systems to manage a range of operational and management systems and identify, amongst other things, health and safety and technical risks in the production facilities of the business units.

The purpose of the systems of internal control is to maintain a sound system of risk management and to sustain an effective internal control environment, ensuring that the financial statements are honest and reliable, as well as to safeguard the group’s assets. We also have certain cost control measures in place, including an independent internal audit function which reports to the audit and risk committee. An internal audit plan is agreed on an annual basis and adopts a risk-based approach to key financial aspects impacting the group.

Social and Ethics

Libstar is committed to realising sustainable long-term stakeholder and social value, whilst aiming to reduce any negative impact on the environment and society. The social and ethics committee is governed by a formal charter. It assists the board to monitor the group’s activities in terms of legislation, regulation and codes of best practice relating to corporate citizenship, organisational ethics and stakeholder engagement.

The social and ethics committee was established as required under the South African Companies Act and as advocated under the King IV principles.

Broad-Based Black Economic Empowerment

The Group is committed to transformation and is working on a scheme that focuses on benefiting certain categories of permanent employees of the group.

This will be implemented through an Employee Share Scheme to incentivise and motivate the beneficiaries of the scheme to remain in the employ of the Group and to contribute to the profitability, growth and success of Libstar. This will also contribute towards the broad-based economic empowerment (B-BBEE) credentials of Libstar and promote the objectives of the B-BBEE Act and BEE Codes by affording black employees the opportunity to participate in the economic benefits arising from the scheme.

The registration process has unfortunately been delayed and the unfavourable listing issue price compared to the current market price has not been helpful. We are evaluating different options and are in the process of consulting with stakeholders.

We have a number of strategies in place to improve transformation and B-BBEE compliance. This is also a key performance metric at business unit level.



Download our BEE Certificate

Socio-Economic Development

We support innovative and responsible initiatives aimed at corporate social upliftment. The group contributes to a variety of programmes through its operating units. Total spend for the F2018 year was R24.2 million.

Contributions included:

  • Transport and housing
  • Discounts to employees in addition to normal business practice
  • Grants and related contributions
  • Donations made in support of healthcare/HIV/AIDS initiatives, community development and education programmes.

During the course of F2018, shares were repurchased from the Amaro Foods Staff Trust for an amount of R11.3 million. 414 employees benefited from this initiative.

We also launched a youth development programme at Lancewood that involves offering mentoring to 20 learners to improve skills in key academic programmes, life skills and community development and civil responsibility. The programme will also assist the learners to gain access to tertiary education and secure jobs after their studies.

In addition, at Multi-Cup, a number of learnerships were launched for unemployed young people.

Environmental Management

We have adopted a strategy that strives to minimise any impact on the environment by regularly reviewing our activities and compliance with all relevant legislation. In light of water shortages experienced in the Western Cape in 2018, various initiatives were put in place at our manufacturing facilities. This included grey water systems and boreholes. This resulted in a 45% reduction in water use, with further initiatives in place without compromising product safety, integrity or site hygiene standards.

In addition, we converted the manufacturing of our earbuds from plastic to paper sticks. We also changed from plastic packaging to food grade paper packaging. This has facilitated a fully recyclable and biodegradable product.

Compliance and Regulatory

The board ensures that Libstar complies with all of its statutory obligations specified in the memorandum of incorporation of the company, the South African Companies Act, the Listings Requirements and all other regulatory requirements.

Each business unit is required to achieve compliance with a number of key standards in addition to the standards that have been imposed on them by their customers, including: FSSC 22000 or ISO 9001:

  • FSSC 22000 certification is required for all food production facilities, whilst ISO 9001 certification is required for non-food manufacturing units.
  • FSSC 22000 is a widely-accepted international food safety and quality management system and one of only eight GFSI-accredited standards that provide a framework for managing food safety. This demonstrates that the group has a robust food safety management system in place.
  • ISO 9001 is a set of international standards on quality management and quality assurance developed to help companies effectively document the quality system elements to maintain an efficient quality system.
  • ISO 14001, 45000 and 55001: These international standards specify requirements relating to effective environmental management, occupational health and safety management and asset management systems.
  • Halaal and Kosher certifications: These are certifications provided to compliant food manufacturers confirming that the processes employed and products produced meet certain religious and cultural requirements. We have achieved compliance with over 50 unique codes and have received more than 150 certifications, including 34 proprietary (customer-specific) codes and 25 industry-related codes.
  • Some of the group’s certifications are outlined below:

    • 23 of the food production facilities are in possession of FSSC 22000 certifications, a further four have complied with internal audits and are expecting to receive formal FSSC 22000 certification shortly and the remaining facilities are at various stages of achieving compliance with the relevant food safety standards.
    • Certain facilities of the group that were recently acquired are still in the process of FSSC 22000 compliance for certification.
    • Certain of the production facilities within the group also comply with other recognised industry standards, such as BRC Global Standards.
    • Two of the non-food production facilities have received ISO 9001 certifications. Certain non-food production facilities of the group that were recently acquired are still in the process of ISO 9001 certification and two non-food production facilities have passed the first stage of the ISO 9001 compliance certification process.
    • 28 of the group’s manufacturing and warehousing facilities are in possession of Halaal certifications and 17 of the group’s manufacturing and warehousing facilities are in possession of Kosher certifications.
    • 34 of the manufacturing and warehousing facilities have passed strict health and safety, food safety and quality control audits conducted by a number of the group’s key customers, such as Woolworths, McDonald’s, Pick n Pay, Shoprite Checkers, Tiger Brands, Unilever, Nestlé and Clicks.

Risk Management

The board recognises that risk management is a key component of good governance, which involves a consideration of both risks and opportunities. In this context, Libstar is required to not only mitigate negative consequences of actions, but to also seek out opportunities.

We have sound management processes to manage risks and outline our key risks in our integrated report. Refer to (provide link to full corporate governance review)

Investor contacts

Libstar Johannesburg
1st Floor 62 Hume Road | Dunkeld | Johannesburg 2196

T: +27 11 447 6619 | F: +27 11 447 6639

Investor Relations
investor@libstar.co.za
Company Secretary
compsecretary@libstar.co.za