Page 45 - Integrated Annual Report

not at risk returned to work on 1 July 2020 based on a schedule which limited the number of employees in the office. At risk employees continue to have an option to work remotely.
Guaranteed salary:
The average salary increase recommended by the remuneration committee for FY2022 is 6% (2021 : 5%; not implemented).
Short-term incentive cash bonus:
The company froze all short-term incentive bonuses to senior staff for FY2020 and postponed considerations of any such payment this year despite the committee being absolutely satisfied with the efforts made by executives related to objectives set out in the short- term incentive policy.
• Market capitalisation has increased from R2.221bn in FY2020 to R5.137bn in FY2021 as a result of the share increasing from R27.46 to R63.52 at year-end, demonstrating that the company has overcome the crisis and is on the road to recovery;
• The effect of COVID-19 has been to reduce headline earnings from R1.05bn in FY2020 to R0.2bn in FY2021;
• Throughout the pandemic management continued to create value and ensure the sustainability of its subsidiaries.
Bank negotiations and long-term debt:
• Successful negotiations with a consortium of banks to conclude a debt repayment program which was fundamental to the sustainability of the business;
• Many assets in the group are brought to HCI as opportunities due to their need of financial support. These assets are nurtured from start-up until they reach profitability. The potential of these growth assets would be stunted if funding were not available to them during the period under review. The negotiations with the banks preserved the ability of the company to continue funding companies, if required, such as Alphawave, Impact Oil and Gas and Platinum Group Metals;
• Management managed to prevent the banks from enforcing any sale of assets and/or a rights issue which would have diluted current shareholder value; and
• Inter-company loans were eliminated. Long-term debt was successfully reduced and HCI increased its shareholding in several listed entities.
Legal matters:
• Generally, the subsidiary companies operate without the assistance of HCI unless there are significant
issues and, as the majority shareholder, HCI becomes involved. This involvement normally involves assistance with litigation;
• The conclusion of the dispute with Ithuba resulted in an unexpected windfall which allowed the company to reduce some of its long-term debt;
• eMedia was granted an interdict to prevent government from auctioning off the spectrum and switching off the transmitters in a number of areas as they migrate from analogue to digital; and
• Current legal matters include wage negotiations for Golden Arrow Bus Services; consultations with the community that owns the surface rights on land required for the Platinum Group Metals infrastructure; successful delisting of Niveus Investments Limited;
Long-term incentive scheme:
The company did not pay awards to management in April 2020 due to the effect of COVID-19 on the market and the HCI share price. The committee postponed the awarding of the share options to December 2020 when the share price had recovered and the market had sufficient time to consider the interim results posted by the company in November 2020.
No outstanding share options granted to management prior to the December 2020 award were exercisable during the year.
Non-executive fees:
In line with the 6% increase granted to management, the committee approved an above CPI increase to the non-executive directors.
The proposed fee structure payable to non-executive directors from the 1 September 2021 to the following annual general meeting is presented in the table below. Also see Special Resolution Number 2 on page 10 in the Notice of Meeting.
Position
Actual fee 2020
Proposed Fee
excl VAT R’000
Non-executive director
323.6
343.0
Member of audit committee
161.8
171.5
Member of remuneration committee
84.9
90.0
Member of social and ethics committee
40.0
42.4
HOSKEN CONSOLIDATED INVESTMENTS LIMITED
INTEGRATED ANNUAL REPORT 2021 43
VOTING RESULTS AND SHAREHOLDER ENGAGEMENT
The remuneration policy report and the remuneration implementation report, which provide insight into the group’s remuneration practices are tabled for non- binding advisory votes of shareholders at the annual