1 (65 MARKS) You are currently employed as an Audit Senior at For You Auditors and have been assigned to the audit engagement of Direct Access (Pty) Ltd for 2022 (hereafter Direct). Direct has a February year-end. The Board of Directors of Direct believes in maintaining exceptional standards of corporate governance, integrity, and compliance with King IV principles. In order to perform the tasks assigned to you in an effective and efficient manner, you need to gain a thorough understanding of Direct's business and corporate structures. The following information from Direct was obtained. Shareholders of Direct: African Supplies 49% Mr. Niel Truiter 28% Ms. Tamsyn Botha 23% Mr. Johan Verwey Mr. Jason Penning Mr. Ryan October Ms. Tamsyn Botha Non-executive director. Independent non-executive director. Member of the audit committee and social and ethics committee. He has served as a non-executive director since the inception of the company in 1998. He has never been employed by Direct and the Board has never reviewed his independence. Independent non-executive director and chairman of the Board. Chairman of the remuneration committee. He was the CEO of Direct up to February 2017 and was appointed as the chairman of the board of directors by the shareholders on 1 March 2018. Independent non-executive director. Ms. Nicole Slabbert Mr. Bernard Ruiters Ms. Chantel Cloete Mr. John Smith Mr. Craig Adams CA (SA) Mr. Ben Smith Mr. Carter Jonker Chairman of the audit committee and member of the risk committee. Independent non-executive director. Chairman of the risk committee and member of the audit committee. Executive director. Non-executive director. Non-executive director. Chairman of the social and ethics committee. Financial Director. Member of the remuneration committee. Chief Executive Officer. Operating Director. Additional information 1. Direct does not have a company secretary and this position has been vacant for a few years already. Mr. Penning will make an appointment in the upcoming financial year. 2. It was noted that Ms. Cloete has only attended two board meetings for the year. 3. It was noted that the social and ethics committee assumes responsibility for the governance of technology and information by setting the direction for how technology and information should be approached and addressed in the organisation. 4. The remuneration committee exercises ongoing oversight of the management of information and technology. 5. Mr. October mentioned that during the year they received a complaint from staff members about the remuneration policy. The complaint specifically mentioned the fact that the remuneration of executive directors is not fair compared to top management and that when the Board of Directors votes on the remuneration policy, they should ensure everything is market-related. 6. The audit committee also approved management's determination of the reporting frameworks and standards to be applied in reports. ANNEXURE F: FORMATIVE ASSESSMENT 1 7. You inspected the disclosure pertaining to the Board and noted the following: The targets set for gender and race representation on the Board and progress made against these targets. Required: > categorisation of each director as executive or non-executive. Discuss any concerns you may have regarding Direct Access (Pty) Ltd's application of the recommended practices contained in the King IV Report. Structure your answer under the following headings and remember to first provide the requirements of the Act under each heading, where after you apply the scenario in this question to the Act. Composition of the board of directors 0 Chairman of the board Disclosure pertaining to the board of directors Remuneration committee Social and ethics committee 0 Risk committee Attendance of meeting Company secretary O Technology Remuneration Policy Audit Committee (65 marks)