ACCOUNTABILITY

Going concern

The directors have ascertained that the Group has sufficient resources to maintain the business for the future and confirm that the business is a going concern. The board has minuted the facts and assumptions used in the assessment of the Group’s going-concern status at the financial year-end.

Auditing and accounting

The board ensures that the auditors observe the highest business and professional ethics and maintain their independence.

The Group uses external auditors in combination with the internal audit function. Management encourages unrestricted consultation between external and internal auditors.

Taxation

Since inception, the Group has treated tax law compliance as a prerequisite of accountability. A tax charter, covering all forms of tax, tax risk management, strategy and governance has been accepted in principal, and subject to final board approval.

Internal financial controls

The directors must maintain adequate internal controls giving reasonable assurance that assets will be safeguarded. They must also maintain proper accounting records and ensure the reliability of financial and operational information.

Internal controls manage the risk of failure to achieve business objectives and can provide reasonable, although not absolute, assurance against material misstatement or loss. Ongoing processes identify, evaluate, manage, monitor and report on significant risks.

Risk management

The board is responsible for risk management after consulting executive directors and senior management within the divisions. The board sets risk strategy, which is based on the need to identify, assess, manage and monitor all known forms of risk across the Group.

Management is accountable to the board for designing, implementing and monitoring the processes of risk management and integrating them into day-to-day activities. Risk management and internal control are practised in every business.

Operating risk can never be fully eliminated. Bidvest minimises it by ensuring all businesses have appropriate infrastructure, controls, systems and human resources.

Key mechanisms to manage operating risk include the segregation of duties, transaction authorisation, monitoring and financial and managerial reporting.

The effectiveness of the internal control systems, including the potential impact of changes in operating and business environments, is monitored through:

• regular management reviews (with representation letters on compliance signed annually by the chief executive and chief financial officer of each major business unit);
• testing by internal auditors and testing of certain aspects of internal financial control systems by external auditors during their statutory examinations; and
• annual written declarations of interests by directors who are also obliged to report potential or actual conflicts.

Whistle-blowing

In addition to other compliance and enforcement activities, the board recognises the need for confidential reporting (“whistle-blowing”) of fraud, theft, breach of ethics and other risks. Whistle-blowing procedures and our 24-hour call centre ensure formal reporting and feedback and is accessible via a toll-free telephone number, e-mail, fax, letter or SMS. Calls were received in various languages including English (86%), Afrikaans (6%), isiZulu (5%), isiXhosa (1%), seSotho (1%) and seTswane (1%).

The call centre received 340 calls, resulting in 144 interventions. These involved allegations of: 51 human resources issues or unfair labour practices, 12 breaches of ethics, four conflicts of interest, two incidents of reported discrimination, four incident of abuse of company property, seven thefts, 52 criminal investigations and 12 requests for information.