INTEGRATED ANNUAL REPORT FOR MULTICHOICE SOUTH AFRICA HOLDINGS (PTY) LTD AND PHUTHUMA NATHI INVESTMENTS (RF) LTD

GOVERNANCE AND ACCOUNTABILITY Adequate controls have since been implemented and accordingly no further fines of this nature were paid in FY2018 or FY2019. Fines paid to the BCCSA: FY2017 R90 000 FY2018 R0 FY2019 R0 In the past year there were no environmental accidents, nor were any environment-related fines imposed by any government. DStv Media Sales Proprietary Limited (DMS), a subsidiary of MultiChoice South Africa Proprietary Limited, entered into a consent agreement with the Competition Commission in FY2018. The agreement was approved by the Competition Tribunal. It was agreed that an administrative penalty of R22m be paid (provided for in FY2017), a contribution of R8m, payable over three years to a fund to be administered through an industry trust to assist small black-owned media agencies and bonus airtime, to the value of R50m per annum, to be provided to qualifying small agencies. Internal control systems MultiChoice has mature systems of internal controls based on policies and guidelines. As part of overall risk management, internal control measures aim to prevent significant risks from materialising and to detect these expediently if they arise to mitigate potential adverse consequences. Internal audit reviews systems of internal control and reports concerns to management and the audit and risk committees. The external auditor considers elements of internal control systems as they relate to financial reporting as part of its audit and communicates deficiencies where identified. The possibility of human error or deliberately bypassing control measures always exists. The group’s system of internal controls is designed to provide reasonable assurance on the integrity and reliability of internal controls; to safeguard, verify and maintain accountability of its assets; and to detect fraud, potential liability, loss and material misstatement while complying with regulations. The board reviewed the effectiveness of the internal control system for the review period by confirming the board-approved combined assurance model, based on representation letters from executive management. Input from internal audit, external audit, compliance, risk management and other assurance providers was also considered. Where necessary, programmes for corrective actions have been initiated. Nothing has come to the attention of the board to indicate that any material breakdown in the functioning of internal controls occurred during the year. Internal audit An internal audit function is in place throughout the group. Prior to the Naspers unbundling, the internal audit function was outsourced to Naspers. Following the unbundling, the internal audit team responsible for MultiChoice transferred to MultiChoice Group Limited. The head of internal audit reports to the chair of the audit committee, with administrative reporting to the MultiChoice group chief financial officer. CORPORATE GOVERNANCE REVIEW continued 70  MultiChoice South Africa Holdings Proprietary Limited integrated annual report 2019