King IV Compliance Report Implementation 2021

King IV™ Report by Principle - Preview FY2021

Adcock Ingram Holdings Limited

Prepared by: Lucky Phalafala

Registration Number: 2007/016236/06

Principle 1

The governing body should lead ethically and effectively.

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The Board, as the custodian of Adcock Ingram's ethical leadership and corporate governance, is committedPage 15 to leading ethically and effectively and strives to govern according to the letter and spirit of good corporate governance. The Board, collectively and individually, is satisfied that the ethics of the organisation are governed in a manner that supports the establishment of an ethical culture. The Board invests effort to ensure

that it sets the tone for Adcock Ingram and actively monitors the implementation of ethics and observes the culture of the organisation by engagement with management (inside and outside of the boardroom) of the Company. Management provides regular progress reports to the Board on the Company and its subsidiaries.

The Board is of the view that a healthy culture of ethics permeates at the Board and across the Group, withno material ethical infractions.

The Board has consistently emphasised the importance of acting with integrity to ensure fairness,accountability and transparency in governing the Company.

During 2021, an evaluation of performance and effectiveness of the Board, its committees, the chairpersons and individual directors was conducted, with a report in this regard submitted to the Board. The evaluation assessed the structures of leadership including the effect of recent changes at the Board, dynamics at the boardroom including the culture, governance, the nature of the relationship with stakeholders and efficacyof reporting.

The Company continues to take reasonable steps to ensure that the Board is effectively supported to playits oversight role in response to COVID-19.

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King IV™ Report by Principle - Preview FY2021

	Adcock Ingram Holdings Limited	Prepared by: Lucky Phalafala
	Registration Number: 2007/016236/06
	Principle 2		The governing body should govern the ethics of the organisation in a way that supports the establishment of an ethical culture.
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			The Board controls the Company and has ensured that the Code of Conduct and Ethics, and the Conflict	Page 15
			of Interests policy are in place to "set the tone from the top". The Board oversees the process of disclosure
			and communications, ensures that appropriate systems for financial control, and for reporting and
			monitoring risk are in place, appoints and evaluates the performance of the executive directors, and
			balances the potential for conflicts between the interests of management and the wider interests of the
			Company and shareholders; this ensures that the management of ethics results in the outcomes
			envisaged by King IV, namely Ethical Culture, Good Performance, Effective Control and Legitimacy.
			Furthermore, ethics are the foundation of Adcock Ingram's business and an unequivocal commitment to
			fairness, transparency and integrity inspire all facets of the Group's operations. Adcock Ingram's Board,
			assisted by its different committees, is responsible for setting the ethical tone "at the top" and monitors its
			implementation, to ensure that business is conducted in a manner that is beyond reproach at all levels in
			the Group.
			The Board reviews the Code of Ethics and Conduct (the Code) annually or when a need arises to ensure
			that it remains relevant. The Code inter alia directs, Board members, employees and other stakeholders
			(when dealing with Adcock Ingram) to model their conduct in accordance with its provisions and to report
			any suspected inappropriate, unethical and illegal activity or misconduct.
			The SET committee plays a key role in exercising oversight of Adcock Ingram's ethics, and ensures that
			the Board is sufficiently equipped to deliver on its goal of having a sustainable ethical culture. Although this
			responsibility has been delegated, the Board remains accountable for the way in which same is
			discharged.
	Principle 3		The governing body should ensure that the organisation is and is seen to be a responsible corporate citizen.
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			Refer to the Sustainability section on pages 72 to 95 which sets out initiatives undertaken by the Company	Pages 15 and 94
			with regards to its people, the environment and the society in which it operates.

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King IV™ Report by Principle - Preview FY2021

Adcock Ingram Holdings Limited

Prepared by: Lucky Phalafala

Registration Number: 2007/016236/06

Principle 4

The governing body should appreciate that the organisation's core purpose, its risks and opportunities, strategy, business model, performance and

sustainable development are all inseparable elements of the value creation process.

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The integrated thinking in our business model section illustrates how all the different elements are linked

Pages 4 and 5

as inseparable elements of the value creation process.

Pages 27 to 31

Pages 27 to 31 which highlights the key material risks, also indicate which strategic pillar will mitigate this

risk, as well as the opportunities identified. Capital impacted are also indicated for each risk.

Principle 5

The governing body should ensure that reports issued by the organisation enable stakeholders to make informed assessments of the organisation's

performance, and its short, medium- and long-term prospects.

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The performance is detailed from page 38 onwards and each section has a view of the future.

Pages 38 - 71

Principle 6

The governing body should serve as the focal point and custodian of corporate governance in the organisation.

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The Board continues to demonstrate its commitment to adhere to good corporate governance, including

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the structures, processes and practices used to direct and manage the Company's operations. As the

custodian of corporate governance, the Board is aware of its responsibility to lead the Group competently

and with integrity, to ensure fairness, accountability and transparency.

The Board, is committed to ensuring that Adcock Ingram has appropriate governance structures, processes and practices that entrench ethical, effective and responsible leadership at Board and executivelevel and throughout the Group.

Each committee promotes strong principles of integrity within the Company and the Board remains the overall custodian of good corporate governance. There is a culture of delegation and trust by the Board with respect to the committees and the role they play in providing the Board with the necessary support and oversight of the Company. The Board is satisfied that the arrangements for delegation within its own

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King IV™ Report by Principle - Preview FY2021

Adcock Ingram Holdings Limited

Prepared by: Lucky Phalafala

Registration Number: 2007/016236/06

		structures promotes independent judgement and assists with balance of power and the effective discharge
		of its duties. The Board is of the view that the established committees are appropriate, relevant and
		adequate for the Group.
		An account of the Board's activities during FY2021 outlining how the Board applied principles of good
		governance to enable and support our value creation process is set out on page 18.
Principle 7		The governing body should comprise the appropriate balance of knowledge, skills, experience, diversity and independence for it to discharge its governance
		role and responsibilities objectively and effectively.
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		The Nominations Committee operates in accordance with its terms of reference which were approved by			Pages 11,13, 20 and
		the Board and plays an important role in the nomination and appointment of new and suitable directors as			101
		well as the identification and removal of underperforming or unsuitable directors. Before nominating a
		candidate for election, the Nominations Committee considers the collective knowledge, skills and
		experience required, diversity of the Board and whether the candidate meets the fit and proper criteria. The
		Board considers its composition holistically and procedures for appointments to the Board are formal and
		transparent and conducted by the Nomination Committee.
		The Nominations Committee is also responsible for assessing the independence of the directors.
		Independence is determined according to the Companies Act, JSE Listings Requirements and the
		recommendations of King IV.
		The Board is constituted in terms of the Company's Memorandum of Incorporation (MOI) and in line with
		King IV. The majority of Board members are independent nonexecutive directors who bring diversity to
		board deliberations and create sustained value by constructively challenging management.
		As the Board is led by a non-independent nonexecutive Chairman, in the objective and effective discharge
		of its governance role and responsibilities, a lead independent director was appointed to achieve a balance
		of power and reinforce accountability mechanisms on the Board.
		A clear separation of power exists between the Chairman of the Board and the Chief Executive Officer.
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King IV™ Report by Principle - Preview FY2021

Adcock Ingram Holdings Limited

Prepared by: Lucky Phalafala

Registration Number: 2007/016236/06

			The Board is committed to forward-thinking succession planning and to ensure stability and leadership
			structures. During the year the Nominations Committee reviewed the Board's succession planning and
			changes were made in this regard.
	Principle 8		The governing body should ensure that its arrangements for delegation within its own structures promote independent judgement, and assist with balance of
			power and the effective discharge of its duties.
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			The Board is governed by an approved Charter and the Company's Memorandum of Incorporation (MOI),			Page 17
			amongst others. The Board charter regulates the parameters within which the Board operates and ensures
			the application of the principles of good corporate governance in all its dealings. The Charter sets out the
			roles and responsibilities of the Board and individual directors, the composition and relevant procedures of
			the Board, including the powers delegated to various Board committees and the relevant principles of the
			Group's approval limits and delegations of authority. The Charter ensures that there is a clear division of
			roles and responsibilities on the Board and that no chairperson has a casting vote. The Charter is aligned
			with the provisions of relevant statutory and regulatory requirements, including, the Companies Act, the
			JSE Listings Requirements, King IV and the MOI. The Board is satisfied that the delegation of authority
			framework of the Company contributes to role clarity and effective exercise of authority and
			responsibilities.
	Principle 9		The governing body should ensure that the evaluation of its own performance and that of its committees, its chair and its individual members, support
			continued improvement in its performance and effectiveness.
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			During the year, the Board embarked on a journey of a Board evaluation with a difference. The evaluation			Page 18 and 19
			was facilitated by an independent service provider, Luvivi Proprietary Limited, trading as Luvivi
			Governance Services (Luvivi). A qualitative assessment of structures of leadership, including the effect of
			recent changes at the Board, dynamics at the boardroom, including the culture, governance, the nature of
			the relationship with stakeholders and efficacy of reporting.

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