AFRICAN DAWN ANNUAL REPORT 2019 15 Corporate Governance continued There was no separate risk committee and the Audit and Risk committee assumed the responsibility and tasks. The responsibilities include, ensuring that management’s processes and procedures are adequate to identify, assess, manage and monitor, Company specific and Group risks. The key focus areas are included in the Audit and Risk Committee reports; • Financial / liquidity risks • Information technology risk • Human resources risk • Operational risk • Legal/compliance risk • Strategic risk • JSE Pro-active monitoring letters. Managers are urged to identify, report and assist with mitigating controls and procedures to lower the risk to acceptable levels. The Audit and Risk Committee is satisfied that they have fulfilled their responsibilities. 6. Risk Management The Board is ultimately responsible for the management of risk. Due to the importance and need for good governance it is assisted by the Audit and Risk Committee. The management of risk has included a pro-active approach through an implemented system of effective internal controls maintained and constantly improved by competent ethical managers. The management of risk relies on well-established governance processes and relies on both individual responsibility and collective oversight, supported by comprehensive reporting. The risk approach is one of strong corporate oversight, with the executives having pro-active participation in managing the risks and are responsible for identifying and contributing to mitigating strategies to manage risk to an acceptable level. Risk management is seen as the responsibility of each and every employee. The significant risks are formally communicated to the Board (via the Audit and Risk Committee), in minutes of meetings which ensure that risks taken are within acceptable tolerance and appetite levels. The risk appetite is the maximum residual risk that Afdawn is willing to take, the parameters being set by business strategies, business models, review and approving budgets, forecasts and monthly management packs. Risks pertaining to the Group as a whole, but especially focused on liquidity, asset management, credit risk, market risk and human resources, are noted and managed on an in-house risk register presented at monthly Exco meetings. The identified risks, their likelihood of occurrence, severity if occurred, mitigating control and the risk management outcome are discussed on a monthly basis. Risks are ranked and prioritised to ensure swift response and intervention to risks outside the Board’s tolerance levels. Liquidity risks are managed on a short term, and long term basis ensuring pairing of known cash in and outflows, with predictions of expected cash flows. Credit risk is formally managed by the credit committee, who is tasked with managing advances in such a way to ensure repayment of capital plus earnings, and to assess the outstanding value with expected repayment and manage collections of outstanding debts. 7. Social and Ethics Committee The Afdawn Social and Ethics Committee (the committee) was established in 2013. The committee assists the board in monitoring that the Group maintains high levels of good corporate citizenship with all stakeholders and ensures that the business considers its social and environmental impact and performance. The majority of the members should be non-executive members however there were not enough Board members and this will be rectified in the future. The committee acts in terms of the delegated authority of the Board and assists the directors in monitoring the Group’s activities relating to ethics, stakeholder engagement, including employees, customers, corporate social investment, environmental issues, and black economic empowerment. The responsibilities of the committee are as follows: • Monitor the Group’s activities relating to social and economic development, good corporate citizenship, the environment, and health and public safety; • Draw matters relating to these activities to the attention of the Board, as appropriate; • Monitor functions required in terms of the Companies Act and its regulations; and • Report annually to shareholders on matters within the committee’s mandate. Committee members The committee comprised the following members at the end of the reporting period: Director Designation 2 May 2018 19 February 2019 Mr. SM Roper (Chairperson) Independent non-executive Yes Yes Mr. D Breedt Executive Director Elite Yes Yes Ms. A Van der Westhuizen Human Resources Manager Yes Yes The focus was to embark on a process to ensure the ethical culture in the business was represented by appropriate policies. The Social and Risks Committee is satisfied that they have fulfilled their responsibilities in line with the appropriate policies .
AFDAWN AR FINAL 2019
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