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

GOVERNANCE AND ACCOUNTABILITY Internal audit The audit committee has oversight of the group’s annual financial statements and reporting process, including the system of internal financial control. It is responsible for ensuring that the group’s internal audit function, as outsourced to the Naspers internal audit team, is independent and has the necessary resources, standing and authority in the organisation to discharge its duties. The committee oversees cooperation between internal and external auditors and serves as a link between the board of directors and these functions. The head of internal audit for MultiChoice South Africa reports functionally to the chair of the committee and administratively to the MultiChoice group CFO. An assessment of the effectiveness of the internal audit function, as well as the head of internal audit, is performed annually by the committee. Based on the assessment, the committee is of the opinion that the internal audit function, as well as the head of internal audit, is effective. Following the unbundling from Naspers, the outsourced Naspers internal audit team has been transferred to the MultiChoice group. Effectiveness of the company’s internal financial controls The committee reports to the board and it is of the opinion that, based on enquiries made and the reports from the internal and external auditors, the risk management processes and systems of internal control of the company were effective for the year under review. No material weaknesses in financial control of the company and its subsidiaries were reported for the year under review. Independence and effectiveness of the external auditor PwC was reappointed as auditor of the company until the next AGM. PwC has been the auditor of MultiChoice South Africa for 13 years. During PwC’s tenure as auditor, there have been changes in the executive management team and a reorganisation of the finance function which has helped mitigate risk of familiarity between PwC and management. The committee believes that the auditor has observed the highest level of business and professional ethics. The committee is satisfied that the auditor has at all times acted with unimpaired independence. Details of fees paid to the external auditor are disclosed in note 34 to the annual financial statements on www.multichoice.com/ multichoice-south-africa/ . All non-audit services provided by the auditor were approved by the committee during FY2019 in accordance with the board-approved policy on non-audit services performed by the external auditor. The audit committee approved the provision of non-audit services that it believes are routine and recurring services that would not impair the independence of the auditor and are consistent with the principles of the Code of Professional Conduct set by the independent Regulatory Board for Auditors. Approved services included general consulting advice and limited tax consulting advice such as tax compliance and tax planning. Services approved for FY2019 amounted to R1m for general tax consulting advice and R2m for other tax consulting advice. During FY2019, the audit committee reviewed a representation by the external auditor and, after conducting its own review, confirmed the independence of the auditor. The quality of the external audit was reviewed, focusing on a range of factors considered relevant to audit quality and feedback from PwC on its performance against its own objectives, the committee concluded the external audit to be satisfactory. It was confirmed that no unresolved issues of concern exist between the group and the external auditor. 93 MultiChoice South Africa Holdings Proprietary Limited integrated annual report 2019