Corporate Governance  

The Board endorses the fundamental principles of good financial, social, ethical and environmental practice as set out in the King Report on Corporate Governance for South Africa 2009 (“the King Report”). The Company complies with the King Report in all material aspects. The Directors also intend that the Company will comply with the main provisions of the QCA Corporate Governance Guidelines for AIM Companies and the UK Corporate Governance Code insofar as they are appropriate given the Company’s size and stage of development.

The Directors recognise that they are responsible for implementing practices of good governance and that companies no longer act independently from the societies and the environment in which they operate. Shareholders and stakeholders insist on high standards of corporate governance requiring increasing levels of transparency, integrity, openness and accountability by directors.

Issues of corporate governance continue to receive the Board’s consideration when appropriate; refinements are made to reflect current best practice in corporate governance and specifically taking into account the changes arising from the South African corporate law reform process, including the recent publication of the King Report.

The Board is responsible for formulating, reviewing and approving SacOil’s strategy, budgets and corporate actions. The Directors hold regular board meetings, but as a minimum at least every two months.

Terms of Reference

Audit Committee

On completion of the Proposed Transaction the Audit Committee will be comprised of Richard Linnell, Colin Bird and Gontse Moseneke and will be chaired by Gontse Moseneke.

The Audit Committee shall monitor the integrity of the financial statements of the Company, including its annual and interim reports, preliminary results’ announcements and any other formal announcement relating to its financial performance, reviewing significant financial reporting issues and judgments which they contain. The Audit Committee shall also review summary financial statements, significant financial returns to regulators and any financial information contained in certain other documents, such as announcements of a price sensitive nature.

The Audit Committee shall keep under review the effectiveness of the Company’s internal controls and risk management systems and shall review and approve the statements to be included in the annual report concerning internal controls and risk management, which in any event will also be done by the Board as a whole.

The Audit Committee shall monitor and review the effectiveness of the Company’s internal audit function in the context of the Company’s overall risk management system.

Remuneration Committee

On completion of the Proposed Transaction the Remuneration Committee will be comprised of Richard Linnell, Colin Bird and Gontse Moseneke and will be chaired by Gontse Moseneke.

The Remuneration Committee shall determine and agree with the Board the framework or broad policy for the remuneration of the Company’s Chief Executive, the Chairman, the executive directors, the Company secretary and such other members of the executive management as it is designated to consider.

The remuneration of non-executive directors shall be a matter for the Chairman and the executive members of the Board. No Director or manager shall be involved in any decisions as to their own remuneration. The Remuneration Committee shall in determining such policy, take into account all factors which it deems necessary. The objective of such policy shall be to ensure that members of the executive management of the Company are provided with appropriate incentives to encourage enhanced performance and are, in a fair and responsible manner, rewarded for their individual contributions to the success of the Company. The Remuneration Committee shall also review the ongoing appropriateness and relevance of the remuneration policy.

Share Dealing Code

SacOil has adopted and will operate a share dealing code governing the share dealings of the Directors and applicable employees which is appropriate for a company admitted to trading on AIM and on the JSE.