Corporate Governance
The Company complies with the 2009 Belgian Corporate Governance Code.
The Company corporate governance structure is based upon the Board of Directors and the Managing Director.
The following elements specify how the Company is governed :
1. Composition of the Board of Directors
The number and appointment of Board of Director members are governed by Article 15 of the bylaws, as follows:
"The Company is managed by a Board of at least seven members, associated or not, including at least three who must be independent in accordance with the Copany Law. The Directors are appointed and removed by the general meeting that sets their number. The term of office of the Directors may not exceed four years. Directors retiring are eligible for reappointment".
At 31 december 2010, the Board of Directors comprised 8 members, including 3 non-executive Directors, 1 executive Director and 4 independent Directors.
The criteria for evaluating the independence of the directors are those specified in Article 524 of Company Law and by the 2009 Belgian Corporate Governance Code.
Composition of the Board of Directors in 2010 :
- Mr Francis RAATZ
Non - executive Director representing the TOTAL Group
Chairman of the Board of Directors
General Manager for fertilisers of the Chemistry branch of the TOTAL Group
Chairman and Chief executive Officer of GPN
Term of office expires: June 2014 - Ms Françoise LEROY
Non - executive Director representing the TOTAL Group
General secretary and Financial Manager of the Chemistry branch of the TOTAL Group
Term of office expires: June 2014 - Mr Michel-Armand BONNET
Independent Director
Consultant, former Director of Human Resources
Term of office expires: June 2013 - Mr Nicolas DAVID
Independent Director
Retired, former legal Director
Term of office expires: June 2013 - Mr Daniel RICHIR
Managing Director
Term of office expires: June 2013 - Mr Robert-J.F. SEMOULIN
Independent Director
Gynaecologist
Term of office expires: June 2014 - Mr Eric VARDON
Non - executive Director representing the TOTAL Group
Chief Financial Officer of GPN
Term of office expires: June 2013 - Mr Laurent VERHELST
Independent Director
Financial Management department of Stanley Europe B.V.B.A.
Term of office expires: June 2014
2. Functioning of the Board of Directors
The Board of Directors' policies and procedures manual describes how it is to function
The Board of Directors meets at least 4 times a year, and as often as considered necessary in the interests of the Company.
Article 17 of the bylaws defines its competence as:
"The Board of Directors has the power to carry out everything required to the achievement of the Company's objects, with the exception of that reserved to general meeting by the law or the Bylaws".
The Board of Directors notably appoints and sets the powers of the Managing Director, approves the annual accounts and the management report, calls the general meetings and decides on the proposals to be submitted thereto.
The Board of Directors defines the corporate strategic plan, and approves the investment programme as well as the annual budgets. A report is given of all financial, commercial and general matters of interest to the Company, at every meeting.
In 2010, the Board of Directors met five times. In addition to considering general business subjects, the Board specifically considered the following:
- Approval of the annual financial statements at 31 December 2009 and the proposed profit allocation to be submitted to the General Meeting.
- Approval of the consolidated financial statements at 31 December 2009.
- Approval of the press release for the 31 December 2009 results.
- Setting the agenda for the Annual General meeting of 17 June 2010.
- Consideration of the consolidated results at 30 June 2010 and approval of the corresponding press release.
- Investments and divestments during the 2010 financial year.
- Consideration of the ten year plan and approval of the 2011 budget.
- Modification of the accounting policies relating to REACH and the defined benefit pension scheme.
The attendance rate at Board of Directors' meetings in 2010 was 92%:
- Michel-Armand BONNET: 80%
- Nicolas DAVID: 100%
- Françoise LEROY: 60%
- Francis RAATZ: 100%
- Daniel RICHIR: 100%
- Robert-J.F. SEMOULIN: 100%
- Eric VARDON: 100%
- Laurent VERHELST: 100%
The Board of Directors' internal regulations determine the assessment process.
3. Directors' remuneration
In compliance with Article 20 of the Company's bylaws, directors' remuneration amounts to the following :
- Directors representing the TOTAL Group are employed by this group and do not receive any remuneration from the Company.
- Within the limit provided by the transition measure taken by the Extraordinary General Meeting of 1 June 2006 and on the proposal of the Appointment and Remuneration Committee, the Board of Directors granted attendance fees of € 1,000 per Independent Director.
- The Managing Director does not receive any remuneration as a Director, but is remunerated in respect of his position as Managing Director of the Company.
4. Board of Directors Committees
In accordance with Article 18ii of Company's bylaws, the Board of Directors has established two committees.
a. The Appointment and Remuneration Committee :
The Nomination and Remuneration Committee comprise three directors, of which the majority fulfil the independence criteria.
In 2010 the Committee was composed of Michel-Armand Bonnet, Francis Raatz (Chairman) and Robert-J.F. Semoulin.
The Committee is responsible for the identification of potential directors, in accordance with the criteria approved by the Board; it assists the Board in fulfilling its functions relating to the remuneration of the Board of Directors' members and executive management of the Company.
The committee met once in 2010 to a meeting called by its Chairman.
The Committee's internal regulations govern its organisation and particularly its assessment process.
b. The Audit Committee :
The Audit Committee is comprised of at least three directors, the majority of which fulfil the independence criteria.
In 2010 the Committee was composed of Nicolas David, Robert-J.F. Semoulin, Eric Vardon (Chairman) and Laurent Verhelst. Eric Vardon and Laurent Verhelst have the necessary accounting and audit knowledge as a result of their position.
The Audit Committee has the responsibility for assisting the Board of Directors in assessing the quality of internal control and the reliability of information provided to shareholders as well as the financial markets.
The Audit Committee more specifically performs the following duties:
- Ensuring the completeness and appropriateness of financial information.
- Review of the annual and half-year parent company and consolidated financial statements, prior to their review by the Board, having regularly reviewed the financial and cash position.
- Review the appropriateness of the accounting principles and policies selected.
- Ensure the implementation of internal control and risk management procedures and ensure follow up with regard to their efficiency via discussion with management.
- Be regularly informed about the work of the internal and external auditors.
- Ensure follow up of the audit of parent company and consolidated financial statements by the Statutory Auditors.
- Review the annual work plans of the external auditors.
- Propose the appointment of the statutory auditors and their remuneration, ensure their independence and oversee their work.
- Set rules calling upon Statutory Auditors to carry out work other than the audit of the financial statements and check its proper implementation.
The Committee met five times in 2010 at meetings called by its Chairman.
The Committee's internal regulations govern its organisation and in particular its assessment process.
5. Profit allocation policy
There is no defined profit allocation policy. However, dividends paid out every year take into account the Company's profits, financial situation and outlook.
6. Relationship with the majority shareholder (TOTAL group)
All transactions between the Company and the companies in the TOTAL group, relating to current trading, are carried out on normal market terms.
These mainly consist of commercial relationships with the GPN Group and financial relationships with PetroFina International Group.
7. Shareholding structure
At 31 December 2010, the shareholding structure was as follows:
8. Principal characteristics of the internal control and risk management systems
The Board of Directors and management consider that internal control and risk management should be an integral part of the daily operation of the Rosier Group.
The Board of Directors oversees the proper operation of the internal control and risk management systems through the Audit Committee.
The Audit Committee in this context is reliant upon information provided by management and the external auditors.
At regular intervals an evaluation is undertaken on the organisation and operation of the internal controls integrated into the processes and systems.
The external auditors are concerned with the certification of the Rosier Group's consolidated financial statements, whereas Management puts more emphasis on managing the risks in its processes and their potential negative consequences.
8.1. Internal control
Management has implemented and maintains an appropriate internal control framework relevant to its activities, the efficiency of its operations and the efficient use of resources to achieve the objectives set.
Management is currently developing a formal internal control framework based on mapping risks inherent in its operations. The mapping of these risks and the related different controls necessary to hedge such risks is an important internal control tool. The formalisation of this documentation will support the current sentiment of management that it has a tailored control framework.
Management has shared its ethical values and its respect for principles which flow from this through the distribution of a Code of conduct to the Rosier Group's employees.
The Managing Director's internal regulations define the scope of its authority, in compliance with the bylaws and the Company Code.
The Audit Committee has enacted its internal regulations, which have been approved by the Board of Directors; the operation of the Committee and its regulations are reviewed on an annual basis.
Specific training programmes relative to compliance with competition regulations have been provided to all staff members in direct or indirect contact with the business world.
Sub-delegations of authority are granted to the various levels of management and are presented on an annual basis to the Board of Directors.
All operating departments as well as the expertise necessary for their proper implementation have been described; their relevance is reviewed through an annual assessment.
Rosier Group's internal control comprises rules of conduct and procedures that:
- Relate to accounting entries that provide a reasonably detailed and a true and fair view of the Company's transactions and asset disposals;
- Provide reasonable assurance that transactions are properly accounted for to prepare financial statements in accordance with Belgian Law, generally accepted accounting principles in Belgium and IFRS international accounting standards.
On an annual basis, Management carries out an assessment of the proper implementation of internal control, relying on in-house resources from its finance department to carry out this assessment, given that it does not avail of an internal audit department.
8.2. Risk management
Rosier Group's risk management is a permanent process allowing the identification, evaluation and management of risks relevant to its operations with the aim of minimising the effects of such risks whilst reaching its objectives and creating value for its shareholders.
Rosier Group's risk management framework is currently in the process of development in the form of a risk map.
The Audit Committee regularly analyses the key risks and discusses the procedures under which management evaluates and manages its exposure to risk, as well as the steps taken to measure and control them.
A description of Rosier Group's significant risks as well as the manner in which they are managed is presented in note 5 of the consolidated financial statements.
8.3. Control activities
Control activities take place monthly and are included in the monthly reporting aimed at ensuring the application of standards and procedures issued by management.
At the monthly meetings, management analyses the various key performance indicators.
The monthly financial reporting is communicated to the members of the Board of Directors.
8.4. Information and communication
The Company meets its legal obligations with respect to the communication of financial information, notably by means of its website www.rosier.eu.
The IT system is regularly updated to meet the demands of reliability, availability and relevance of information.
IT security is subject to much scrutiny and is included in adequate procedures.
8.5. Oversight
The Audit Committee in charge of monitoring the effectiveness of internal control systems and risk management. The Audit Committee reports its observations to the Board of Directors at its meetings.
Management is in charge of the supervision of the implementation of internal control and risk management. Formal internal control evaluations take place on a regular basis.