Corporate governance aligned to the King IV^TM principles

Key focus areas and value-creating activities for the period under review

MEETINGS WITH MANAGEMENT AND THE FINANCE FUNCTION

During 2023, the ARC met frequently with Management; reviewed the 2023 annual budget and recommended to the Board the approval of the 2023 annual budget.

The ARC conducted an evaluation of the performance of the Chief Financial Officer and finance function and has identified areas requiring improvement. Implementation of initiatives to address these will be monitored by the committee during the 2024 financial year.

EXTERNAL AUDITORS

Following the expiration of their previous contract, Mazars underwent a tender process and were subsequently selected as the external auditors for a duration of 5 years starting from 2022. In 2023, the audit partner was rotated in accordance with Mazars’ internal rotation policies. The ARC held discussions with the external auditors throughout the year, to keep the ARC briefed on the audit progress and all audit and accounting issues. The ARC conducted a private interview with external auditors before giving its clearance on the various financial statements. The ARC received assurances that the audit process went as planned, with full support from SAICA management.

The ARC regularly assesses the external auditor’s independence, including the absence of conflicts of interests and is satisfied with the independence and objectivity of the external auditors. The ARC reviewed the annual audit plan and considered the scope and fees to be paid to the auditors. There were no non-audit services provided by the external auditors during 2023. The ARC conducted an evaluation of external audit’s performance and is satisfied with its outcome.

INTERNAL AUDIT

The internal audit unit is an independent outsourced function of SAICA with a direct reporting line to the ARC. The internal audit coverage plan for 2023 was approved and implemented. The ARC took note of the outcome of the internal audit performance evaluation, together with key conclusions and recommendations raised. The committee also monitored the status of implementation of internal audit action plan.

Internal audit performed additional reviews in the year under review within the set limits and the scope of work and the fee was approved by the ARC. The ARC conducted an evaluation of internal audits’ performance for 2023 and is satisfied with its outcome.

COMBINED ASSURANCE, RISK AND COMPLIANCE MANAGEMENT

The ARC addressed various aspects of risk management and regularly reviewed SAICA’s risk and combined assurance activities. SAICA received an opinion of “Satisfactory” i.e. controls evaluated are adequate, appropriate, and effective to provide reasonable assurance that risks are being managed and objectives should be met on risk management as expressed by the internal auditors. The ARC oversaw the implementation of the action plans arising from SAICA’s Enterprise Risk Management (ERM) maturity assessment. SNG independently assessed the ERM maturity level for 2022 and suggested plans for enhancement. By 2023, SAICA’s ERM maturity had progressed to a level 4 (Proactive) maturity, an improvement from the level 3 (Foundation) maturity status it held in 2022.

The ARC further received assurance from the Board sub-committees on the effectiveness of the risk management processes relevant to their portfolios.

The ARC monitored the mitigation of control weaknesses and levels of non-compliance and was satisfied that the material compliance matters are adequately monitored and addressed. The ARC was also updated on SAICA’s Group approach to regulatory developments and tax compliance. In addition, the ARC considered the process for the whistleblowing reporting which is under the custody of the risk and compliance unit and obtained the unit’s assurance that all reported matters have been adequately addressed with the assurance for material matters. Matters reported through the whistleblowing process in the scope of the Board and its sub-committees are referred for investigation.

The ARC conducted an evaluation of the performance of the risk and compliance function, and was satisfied with its outcome.

ANNUAL FINANCIAL STATEMENTS

The ARC examined SAICA’s 2023 financial statements, prepared in accordance with the International Financial Reporting Standards (IFRS) and has discussed with the external auditors, in the presence of SAICA’s management and in private, in order to obtain an understanding of the audit procedures applied.

Based on the work undertaken and the information received (including the opinion from the external auditor on the separate and consolidated financial statements and a representation letter from the management of SAICA), the ARC confirms that the separate and consolidated financial statements of SAICA, presents a true and fair view of the financial position of SAICA as of 31 December 2023, in accordance with IFRS. On this basis, the ARC recommended the group financial statements of SAICA to the SAICA Board of Directors of which the Board has approved the submission of the SAICA separate and consolidated financial statements to the members of SAICA on 29 April 2024.

ARC concurs and accepts the conclusions of the external auditor on the annual financial statements and is of the opinion that the audited separate and consolidated financial statements be accepted and read together with the report of the external auditors.

INTEGRATED REPORT

The committee reviewed the content of the integrated report ensuring it is presented in accordance with the Integrated Reporting Framework and recommended it for approval to the Board. An independent limited assurance on the review of the SAICA’s Annual Integrated Report was provided by the external auditors.

The Board approved the submission of the SAICA Annual Integrated Report on 29 April 2024, for approval by members at the Annual General Meeting on 31 May 2024.