CORPORATE GOVERNANCE

The Company adheres to the 2009 Belgian Code of Corporate Governance.
 

The Company’s governance structure is based on a Board of Directors and Managing Director (Rosier Group’s CEO).

The company’s corporate governance charter was reviewed in 2018 and is available on the Company website (www.rosier.eu).

1. Board of Directors

 

    1. Composition
       

The number and appointment of members of the Board of Directors are governed by article 15 of the Company's bylaws which decrees:
 

 “The company is managed by a board composed of at least seven members, who do not need to be shareholders, including at least three who must be independent within the meaning of the Companies Code. Directors are appointed and removed by the General Meeting which sets their number. The term of office may not exceed four years. Outgoing Directors are eligible for reappointment.”


The assessment criteria for determining Directors’ independence are those used by Article 526-3 of the Companies Code and by the 2009 Belgian Corporate Governance Code.

  

At 31 December 2018, the Board of Directors was comprised of 7 (seven) members, of whom 3 (three) were non executive, 1 (one) was an executive and 3 (three) were independent Directors:

 

  • ANBA B.V.B.A., represented by Mrs Anne Marie BAEYAERT
                 Independent Director
                Business management firm

                Term of office expires: June 2022
     
  • Mrs Hilde WAMPERS
                  Independent Director
                 Group Tax Director, Proximus
                 Term of office expires: June 2021

     
  • Exploration B.V.B.A., represented by Mrs Dina DE HAECK,
                   Independent Director
                   CEO
                   Term of office expires: June 2021

     
  • Mr Jan-Martin NUFER
                  Non-executive Director representing Borealis Group
                  Director, Treasury and Funding Borealis AG
                  Term of office expires: June 2021
     
  • Mr Willy RAYMAEKERS
                 Chairman of the Board of Directors
                 Managing Director – Executive Director of Rosier S.A.
                 CEO of Rosier Group
                 Term of office expires: June 2021
     
  • Mr Andreas STEINBUECHLER
                 Non-executive Director representing Borealis Group 
                 General Manager Borealis L.A.T & Head of Sales Fertilizer & TEN
                 Term of office expires: June 2022
     
  • Mr Benoît TAYMANS
                 Non-executive Director representing Borealis Group
                 Project Manager in Borealis’ Base Chemicals Department
                 Term of office expires: June 2022
     

1.2. Resignation and/or appointment of Directors (changes in 2018)
 

Thierry KUTER, non-executive Director, resigned on February 1, taking effect at the end of the shareholders' meeting of June 21, 2018.

 

On the recommendation of the Nomination and Remuneration Committee, the Board of Directors of March 27, 2018 decided to propose Mr. Jan-Martin NUFER as director of the Company.

 

The definitive appointment of Mr. Jan-Martin NUFER has been submitted to the general meeting of June 21, 2018.

 

Mr. Simon JONES, non-executive Director, resigned on November 23, 2018 with effect from November 30, 2018.

 

In order to fill the vacant mandate, and on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of December 18, 2018 decided to co-opt Mr. Andreas STEINBUECHLER as director of the Company.

 

It will be proposed the definitive appointment of Mr. Andreas STEINBUECHLER to the general meeting of June 20, 2019.

1.3. Operation

 

The Board of Directors’ internal rules detail its operation.

The Board of Directors meets at least four times a year, and as often as it deems necessary in the interest of the Company.

 

Article 17 of the Company’s bylaws defines its authority:

 

“The Board of Directors has the power to carry out any actions necessary or useful for achieving the company’s purpose, with the exception of those that the law or the Articles of Association reserve for the General Meeting.”
 

The Board of directors is notably responsible for appointing the Managing Director whose powers it also sets, the closure of the annual accounts and the management report, the convening of general meetings and the preparation of proposals to be submitted to the latter for consideration.
 

The Board of Directors draws up the Company’s strategic plan and its investment programmes. It also notably adjudicates upon contracts and agreements between the Company and Borealis Group, in application of article 524 of the Belgian Companies Code.

A report is provided at each meeting on all the safety, financial, commercial and other issues concerning the Company.

 

In 2018, the Board of Directors met eight times, seven in the form of physical meetings and one time by telephone.

In addition to reviewing day-to-day management, the Board has notably deliberated on the following points:

 

  • The closure of Rosier S.A.’s annual accounts on 31 December 2017, the management report and the proposed profit allocation to be submitted to the General Meeting;
  • The closure of the consolidated accounts on 31 December 2017, the consolidated management report and the 2017 remuneration report;
  • The approval of the text of the press release for the results as at 31 December 2017;
  • The setting of the agenda for the ordinary general meeting of 21 June 2018;
  • The approval of agreements between Rosier and Borealis, in application of article 524 of the Belgian Companies Code;
  • The follow-up on the recommendations of the Statutory Auditor and the internal audit carried out by Borealis;
  • The review of the consolidated income at 30 June 2018 and approval of the text of the corresponding press release;
  • Its self-assessment.
     
    The average attendance rate for Board of Directors meetings in 2018 was 96%.

     
    The Board of Directors’ internal rules determine the assessment process.

     
    1. Committees within the Board of Directors.
       

In accordance with the legal and statutory provisions (article 18-2 of the Company’s bylaws), the Board of Directors has set up three Committees.

  1. The Appointments and Remuneration Committee

    The Appointments and Remuneration Committee is composed of three Directors, the majority of whom meets the criteria for independence.

    At 31 December 2018, the Committee was composed as follows: Mr Benoît TAYMANS (Chairman), ANBA B.V.B.A., represented by Mrs Anne Marie BAEYAERT and Exploration B.V.B.A., represented by Mrs Dina DE HAECK.

    The Appointments and Remuneration Committee performs the following specific tasks:

     
      • Identifying individuals qualified to become Directors in accordance with the criteria approved by the Board of Directors.
      • Making recommendations to the Board of Directors regarding re-election or the appointment of new Directors.
      • Making recommendations to the Board of Directors regarding remuneration for the managing director and the independent Directors.
      • Making recommendations to the Managing Director regarding remuneration for Rosier Group’s Executive Management.
      • Preparing the annual remuneration report which is submitted to the Board of Directors and the General Meeting for their approval.

        The Committee’s internal rules govern how it is organised giving particular attention to its assessment process.
         
        In 2018, the Committee met three times, convened by its Chairman; the rate of attendance at meetings was 100%.
        The Committee’s internal regulations govern how it is organised giving particular attention to its evaluation process.


         
  2. The Audit Committee

    The Audit Committee is composed of at least three Directors, the majority of whom meets the criteria for independence.


    At 31 December 2018, the Committee was composed as follows: Mr Jan-Martin NUFER (Chairman), ANBA B.V.B.A., represented by Mrs Anne Marie BAEYAERT and Mrs Hilde WAMPERS.
    Mr Jan-Martin NUFER, by virtue of his position, has the required accounting and auditing knowledge.

    The Audit Committee is responsible for assisting the Board of Directors so that the latter can ensure the quality of internal auditing and the reliability of the information given to shareholders as well as to the financial markets.

The Audit Committee performs the following specific tasks:
 

  • Ensuring the process for preparing financial information is monitored and is complete.
  • Studying the parent company’s individual accounts and the annual and biannual consolidated accounts before they are reviewed by the Board, having studied the financial and cash position on a regular basis. 
  • Reviewing the suitability of the accounting methods and policies chosen. 
  • Ensuring the establishment of internal auditing and risk management procedures, and that their effectiveness is monitored with assistance from management.
  • Keeping up to date with any internal and external audit work. 
  • Ensuring that the auditing of the Company’s individual and consolidated accounts by the Statutory Auditor is monitored.
  • Reviewing the external auditors’ annual work programmes. 
  • Proposing the appointment of the Statutory Auditor, his remuneration, and ensuring both his independence and the proper performance of his duties. 
  • Determining the rules for using the Statutory Auditor for work other than auditing the financial statements and verifying their proper enforcement.
     
    In 2018, the Committee met seven times; the attendance rate at these meetings was 100%.
     
    The Committee’s internal regulations govern how it is organised giving particular attention to its assessment process.
     
  1. The Committee of Independent Directors
     
    This Committee was created in 2013 in accordance with article 524 of the Belgian Companies Code which pertains to all decisions and all transactions between a listed company and an affiliated company.
     
    Within this framework, the main tasks of the Committee, assisted by one or more independent experts, are as follows:
     

  • Describing the nature of a decision or an operation, estimating the associated profit or loss for the company or for its shareholders, assessing the financial consequences and determining whether the decision or the operation is likely to result in manifestly excessive damages for the Company in light of the Company’s policy.
     
  • Providing the Board of Directors with a reasoned opinion in writing. 
     
    At 31 December 2018, the Committee was composed of the Company’s three independent Directors: ANBA B.V.B.A., represented by Mrs Anne Marie BAEYAERT, Mrs Hilde WAMPERS and Exploration B.V.B.A., represented by Mrs Dina DE HAECK.     
     
    In 2018, the Committee met four times; the attendance rate at these meetings was 100%.
                   
  • Meeting of 20 June 2018:
     

Opinion to be given by the Committee to the Board of Directors on proposed contracts between two companies of Borealis and Rosier Group and on the renewal of an 18-month financing agreement between Rosier and Borealis AG expiring on December 31, 2018.

                                   
                        Conclusion of the Committee of Independent Directors:

“The Committee of Independent Directors considers it is not conceivable that the decision to sign the various service contracts and the renewal of the financing agreement to secure the Company's financing would cause manifestly excessive damages for the Company in light of the Company’s policy or even cause harm to the Company. 

The present opinions, signed by the independent Directors, are intended for the Board of Directors of the Company.

 

Done at Roucourt on June 20th, 2018. "

 

Extract from the minutes of the Board of Directors’ meeting of 20 June 2018:

"With regard to the provision of services, the information was provided to the members of the Committee of Independent Directors.
The Committee considers that, in view of the costs in line with those observed in Belgian industry, these contracts are not prejudicial to Rosier. They do not duplicate positions of Rosier employees.

"The financing agreement will cover the needs of Rosier SA until June 30, 2020. The interest rate is based on a market index. The margin is not unusual and is less than that required by a bank. The fact that Rosier S.A.
belongs to the Borealis Group explains the need to respect the financial policy of this group. The conditions proposed by Borealis for the extension of the contract at conditions better than those of the market are reasonable and should be retained by Rosier. "

Conclusion of PwC, the Statutory Auditor:

“In conclusion, we declare that our audit has not revealed anything that could seriously affect the accuracy of the data referred to in the opinion of the Committee of Independent Directors of 20 June 2018 and in the minutes of the Board of Directors of 20 June 2018. ”

 

2. Profit allocation policy
 

The Board of Directors will assess the future dividend policy on the basis of Rosier’s financial performance and investment needs.

 

3. Relations with the principal shareholder:

As from 28 June 2013, the date on which Borealis A.G. assumed control of Rosier S.A., operations relating to the application of article 524 of the Belgian Companies Code have been the subject of an opinion of the Committee of Independent Directors – assisted by independent experts - submitted to the Board of Directors for its decision.

The operations falling under the application of this article that were approved by the Board of Directors in 2018 concern:

  • The financing of the Company by Borealis Group;
  • The review and the prolongation of service contracts of Borealis employees.

The Committee of Independent Directors and the Board of Directors concluded that the transactions specified by article 524 were not likely to cause manifestly excessive damages, nor harm to the Company.

 

4. Shareholding structure


As at 31 December 2018, the situation regarding shareholders declaring a holding in excess of 2% of the share capital was as follows:
 
 

  1. Main characteristics of the internal control and risk management systems

    The Board of Directors and Management consider that internal controls and risk management must be an integral part of Rosier’s day-to-day operations.

     

The Board of Directors monitors the proper functioning of the internal control and risk management systems through the Audit Committee and the Committee of Independent Directors.
 

These Committees are based in this context on the information provided by Management, the internal audit and the external audit.

 

An audit on the internal control system was carried out by Borealis Group in August 2017. The findings and recommendations of this audit were examined in detail by Management, the Audit Committee and the Statutory Auditor. 

 

Management has defined an improved internal control system based on the description of the flows for which each manager has committed to implement continuous improvements (Internal Control Standards). This system began to be put in place during the year 2018; it will ensure that the objectives of reliability of financial information, compliance with laws and regulations and the establishment of internal control processes are achieved (points 5.1 and 5.3 developed below).


This internal control system is complementary to the integrated management system set up and reviewed every three years (ISO 9001: 2015).
 

Rosier applies a three-lines-of-defence model in order to fulfil its objectives in terms of risk management:
 

First line of defence

Operational management, which is responsible for maintaining effective internal controls and the day-to-day implementation of risk control procedures.

 

Second line of defence

The function linked to risk management under the responsibility of the CEO ensures that the first line of defence achieves its purpose in an effective manner (point 5.2 developed below).
 

Third line of defence

Rosier Group’s external audit, which certifies the consolidated accounts and issues recommendations on risk management and internal control.

 

To this, we can add monitoring carried out by the Audit Committee responsible for tracking the effectiveness of internal control and risk management systems.

The Audit Committee reports its findings to the Board of Directors.

 

The internal control and risk management framework adopted by Rosier includes the information developed below.

 

    1.  Internal control environment
       

Management is working to improve the formalised internal control system contributing to the control of activities, the effectiveness of operations and the efficient use of resources to meet the objectives set.

 

Management has shared its ethical values and respect for the principles arising from them with all Rosier staff members through the regular circulation of Borealis’ ethical policy and ongoing training in the form of “e-learning”. These ethical values and their respect are the cornerstones of the internal control system.

The powers conferred on the Managing Director are set out in an Authority Schedule in accordance with the bylaws and the Belgian Companies Code.

The Audit Committee has issued its internal regulations, which have been approved by the Board of Directors; the workings of the Committee and its regulation are evaluated on a yearly basis. After assessment, no changes were applied in 2018.

 

All operational functions are described in addition to the skills necessary for their proper implementation; the staff has access to this information. An annual assessment makes it possible to check that they are adequate.

 

5.2. Risk Management
 

Rosier’s risk management is a process that makes it possible to identify, evaluate and manage the risks associated with activities in order to minimise the effects of such risks on its ability to achieve its objectives and create value for shareholders.

 

The risk management policy was updated in 2018 under the CEO’s responsibility.
This risk mapping ensures that the Company regularly identifies, assesses, monitors and implements appropriate actions to minimise the effects of these risks.

All risks are periodically reviewed and assessed.

 

The register of these risks created in this way includes three levels:
 

  • Strategic risks: risks that could have an impact on the company’s strategy and reputation.
     
  • Tactical risks: risks identified within the context of requirements or compliance. These risks mainly relate to the processes or to the control weaknesses.
     
  • Operational risks: risks that could have an impact on the effectiveness of the company’s day-to-day operations. Operational risks generally relate to short-term events that have an impact in areas such as finance, production, project management or IT.


     Operational risks have been classified under four categories:
     
      • Financial risks: risks linked to the exchange rate, interest rates, cash flow, credit, insurance and the price of raw materials.
        Rosier Group doesn’t use financial instruments.

         
      • Prevention of production risks: proactive risk prevention management as regards production, health, safety and the environment and the availability and quality of the facilities.
         
      • Project management: events having an impact on the scope, schedule and budget of a project.
         
      • IT risks: events having an impact on information and the technology used to process, store and transfer information (data availability, integrity and confidentiality).
         
           The main risks identified during this exercise are listed below:
         
    • Risks that sales of fertilisers do not meet the targets set (granulates, liquids and powders);
    • Risks of a shortage in strategic raw materials;
    • Risks linked to the production tools (technical problems);
    • Risks linked to the quality of products;
    • Risks linked to emanations from hazardous products and the decomposition of products;
    • Risks of legislative changes (requirements relating to the environment, transport, hazardous products, …);
    • Risks linked to non-compliance with regulations in the financial and legal areas (tax audits, FSMA audit, legal proceedings, etc.);
    • Organisational risks (linked to staff knowledge and skills);
    • IT risks.
       

Action plans to minimise the effects of risks have been drawn up and are subject to quarterly monitoring in the Management Members’ Committee.

 

5.3. Control activities

Control activities are carried out periodically.

At monthly meetings, Management analyses the various key performance indicators.

 

Management and the members of the Board of Directors receive the monthly activity report.

 

The CEO reports to each Board of Directors, on the Company’s position (Health, Safety, the Environment and the course of business).

 

5.4. Information and communication


The Company is fulfilling its statutory obligations as regards the communication of financial information, in particular through its website www.rosier.eu.

 

Communication tools are made available to staff. Information is circulated through Borealis Group’s intranet, Rosier Group’s intranet and continuously on the screens available on the Group’s various sites.

 

The information system is regularly upgraded to meet requirements as regards the reliability,  availability and relevance of the information.
 

6. Remuneration report

6.1. Remuneration of non-executive Directors
 
In accordance with article 20 of the bylaws, the non-executive Directors do not receive remuneration, with the exception of the independent Directors who receive an attendance allowance for their effective participation at meetings of the Board of Directors, the Audit Committee, the Appointments and Remuneration Committee and the Committee of Independent Directors.
 
Subsequent to the decisions of the Annual General Meeting of 19 June 2014, the amount of the Directors’ fees awarded to the independent Directors is set as follows:

  • €1,500 for attending a meeting of the Board of Directors;
  • €900 for attending a meeting of one of the Committees created by the Board of Directors, i.e. currently the Audit Committee, the Appointments and Remuneration Committee and the Committee of Independent Directors;


The Directors’ fee paid to the independent Directors in 2018 and in 2017 were as follows:

 

 

  

2018

 

2017

     

ANBA B.V.B.A.,
represented by Mrs

 

 

 

 

 Anne Marie BAEYAERT

 

€24,600

 

€25,200

Mrs Hilde WAMPERS

 

€21,900

 

€23,400

Exploration B.V.B.A., represented by Mrs Dina DE HAECK

 

€18,300

 

€10,200

Mr Nicolas DAVID

 

-

 

€12,300

Mr Laurent VERHELST

 

-

 

€7,200

     

Total

 

€64,800

 

€78,300

In addition to Directors’ fee, the independent Directors are reimbursed for travel and accommodation expenses incurred in the performance of their duties with the Board of Directors or the various Committees.

 

6.2. Remuneration of the executive director

 

Since 12 November 2014, the executive director (CEO) has been a Borealis employee; he holds this position alongside that of Chairman of the Board of Directors.

 

His services are invoiced to the Company by Borealis in accordance with a service provision agreement which was approved by the Board of Directors of 11 February 2015, after having received the support of the Appointments and Remuneration Committee and the Committee of Independent Directors.

 

6.3. Remuneration of Management Committee members 

 

As of December 31, 2018, the Rosier Group Management Committee is composed of seven members (there were nine members in 2017): three members are employees of Rosier S.A., three members are employees of Rosier Nederland B.V. and one member is employee of Borealis and seconded to Rosier.
 

The remuneration of Management Committee members employed by Rosier Group is set by the CEO after consultation with the Appointments and Remuneration Committee, and consists of a fixed part and a variable part.  The variable part is linked to the achievement of collective (the Group’s financial performance, safety and transformation plan) and individual annual targets.  For the four employee members of Rosier S.A., half of the variable part is settled by a payment in March of the following year and half is settled through a specific insurance contract.

 

 

 

 

 

 

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