Annual Integrated Report 2019
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ANNUAL INTEGRATED REPORTA n n u a l Integrated Report 2019 NPO Registration number – 020-050 DEVELOPING RESPONSIBLE LEADERS FOR A CHANGING FUTURE CONTENTS WHO WE ARE PART I WHO WE ARE > SAICA at a glance 4 About this report 5 Performance against 2018 commitments 6 2019 highlights 8 TRUST IS Chairman’s message 10 CEO’s statement 14 SAICA strategy 17 EARNED Business model and value chain 20 SAICA members 26 Stakeholder engagement and shared value creation 40 I II III IV PART I WHO WE ARE strategic Part II businessSAICA’s operating environment and its impact on strategy 50 SAICA’s operating model 52 OPERATING ENVIRONMENT context SAICA’s Disciplinary Process 60 AND PERFORMANCE > GOVERNANCE AND SAICA’s material matters 66 Risk management 69 STAKEHOLDER SAICA’s governance framework 82 > King IV report 85 MANAGEMENTPART III The Board 91 Key governance positions 94 GOVERNANCE Board committees 96 The new SAICA Council 101 Board of Directors 106 Executive Committee 109 performance Part IV 2019 Performance against strategy 112 2019 Remuneration Report 121 PERFORMANCE > Committee reports 124 2019 Summary financial information 140 SAICA INTEGRATED REPORT 2019 1 DEVELOPING RESPONSIBLE LEADERSPart I 2 SAICA INTEGRATED REPORT 2019 I II III IV PART I WHO WE ARE WHO WE ARE > DEVELOPING SAICA at a glance 4 About this report 5 Performance against 2018 commitments 6 2019 highlights 8 Chairman’s message 10 CEO’s statement 14 RESPONSIBLE SAICA strategy 17 Business model and value chain 20 SAICA members 26 Stakeholder engagement and LEADERS shared value creation 40 DEVELOPING RESPONSIBLE LEADERS SAICA INTEGRATED REPORT 2019 3 SAICA at a glance SAICA IS A VOLUNTARY, NOT-FOR-PROFIT MEMBER ORGANISATION THAT OPERATES IN TERMS OF ITS CONSTITUTION (AVAILABLE ON OUR WEBSITE) https://www.saica.co.za/Portals/0/documents/SAICA_Constitution2019.pdf OUR PURPOSE: OUR MAIN OBJECTIVES ARE TO: DEVELOPING RESPONSIBLE >• Promote the interests of SAICA members LEADERS FOR A CHANGING >• Support the development of the South FUTURE African economy and society #aprofessionofnationalvalue 2 286 1 658 2 286 SAICA is the custodian of three complementary 1 658 accounting designations, CA(SA), AGA(SA) and AT(SA), 4 304 708 and has 49 804 active members around the world. 4 304 Our primary sources of revenue are membership fees, 708 fees from seminars and events, as well as donor funding. CA(SA) members SAICA is an active member of a number of international CA(SA) members forums as part of our advocacy role and to participate in knowledge-sharing and global standard-setting. Our recognition agreements with 14 peer accounting 37 116 institutes worldwide improve members’ professional 37 116 mobility and international business networks. SouthSouth Africa Africa RestRest of ofAfrica Africa UK andUK Europe and Europe The Institute’s head office is in Johannesburg with offices TheThe Americas Americas MiddleMiddle East, East, Asia Asia and Australiaand Australia in Bloemfontein, Cape Town and Durban situated close to the business areas in which our members operate. SAICA’s strategy supports the achievement of its purpose and has six pillars, which are shown below. The report is also relevant to these pillars. Continued Delivering better Growth and Growing the 1 relevance of the 2 member value and 3 transformation 4 Institute’s thought accountancy offerings that will of the accountancy leadership profession see our members profession in terms standing, both remain relevant and of race and gender locally and Making a in high demand in and in line with the internationally, 5 quantifiable social the marketplace overarching national through technical contribution agenda excellence and through nation- a more robust building initiatives, Sustainability of the stakeholder thereby contributing 6 profession through engagement focus to the global the attraction and Sustainable retention of new Development Goals members (SDGs) 4 SAICA INTEGRATED REPORT 2019 I II III IV PART I WHO WE ARE About this report This integrated report provides an overview of SAICA’s MATERIALITY DETERMINATION structure, activities, performance and outlook for the This report aims to provide readers with information year ended 31 December 2019. It has been prepared regarding SAICA’s most material matters. Materiality to meet the information needs of SAICA members as is determined by considering matters that have the well as those who form part of the Institute’s broader potential to affect SAICA’s ability to create value for its stakeholder groups (refer to SAICA’s stakeholder stakeholders by implementing its strategy. section on page 40). Material matters that have the potential to destroy value MAIN FRAMEWORKS USED AND TIME are referred to as risks, while those that can help create value are termed opportunities. FRAMES The integrated report is prepared in accordance with GROUP STRUCTURE AND REPORT the International Integrated Reporting <IR> Framework and considers the principles of the King Report™ on BOUNDARY Governance for South Africa 2016 (King IV). In this At the end of 2019, the SAICA Group comprised SAICA, report: the Thuthuka Education Upliftment Fund (TEUF), The Hope Factory Group (THF) (comprises of The Hope • Short term refers to the coming financial year Factory and it’s 100% owned subsidiary SAICA Enterprise • Medium term is the period to 2023, and Development) and the dormant company Association of • Long term is the period beyond 2023 Accounting Technicians (AT(SA)) which is in the process of being wound up. The reporting boundary includes There were no significant changes to SAICA and its those risks, opportunities and outcomes associated with activities during the year that affect comparability entities or key stakeholders beyond the financial reporting with the 2018 report and no material restatements of structure which have a significant and direct effect on information provided in previous reports. the ability of the SAICA Group to create value (refer to ‘Stakeholder engagement’, ‘Risk management’ and ‘2019 Performance against strategy’ sections – pages 40, 69 and 112 respectively). ASSURANCE PROCESS Our integrated reporting process, as well as the The process to determine the information content of this report, is guided by the principles and included in this report includes: requirements of the <IR> Framework and King IV. Management prepares and validates the report, ensuring A review of SAICA’s external environment it provides a balanced and reasonable view of SAICA, (refer to ‘Our operating environment’ on its performance for the year and outlook. The report has page 50). been reviewed and approved by the Board, assisted by the Audit and Risk Committee. Financial information is extracted from the audited financial statements, which The priorities identified through are available on our website. Limited assurance is engagements with members and expressed over the actual performance information used SAICA’s other key stakeholders (refer to to evaluate performance over the strategic objectives. ‘Stakeholder engagement and shared The assurance statements are available on our website, value creation’ on page 40). http://www.saica.co.za/Portals/0/documents/SAICA_ Limited_Assurancel_Report_2019.pdf and provide a detailed overview of the assurance provided. The external Assessment of risks and opportunities auditors also reviewed the alignment of the Integrated (refer to ‘Risk management’ on page 69). Report against the requirements of the International <IR> Framework. Assessment of the critical issues discussed at SAICA Board, Board sub-committee STATEMENT BY THE BOARD and executive management meetings The Board acknowledges its responsibility to ensure the throughout the year. (Refer to ‘The Board’ integrity of this report. The Board has applied its collective on page 91 and ‘Board committees’ on mind to the preparation and presentation of the report and page 96). the information it contains. The Board is satisfied that the information contained in this report is presented in accordance with the International <IR> Framework. This integrated report was approved by the Board on 16 April 2020. SAICA INTEGRATED REPORT 2019 5 Performance against 2018 commitments Development of an The first draft of the framework was finalised early in 2019. Ethics Management An internal values and ethics workshop was conducted during the Framework stemming year that concluded with a session to develop a set of core values from the results of the for SAICA which will be refined, approved and adopted in 2020 ethics culture survey Rollout of the The first phase of the project was implemented during the year Ushintsho project Communication on The outcome of SAICA’s actions following the Ntsebeza Inquiry were Ntsebeza inquiry communicated to members and the public in June 2019. Further communication will be made as and when the cases are concluded Implementing the The GRTT recommendations were approved by SAICA members in Governance Review 2019 and are being implemented in a phased approach Task Team (GRTT) recommendations Developing The necessary changes to curricula, teaching methodologies, the necessary capacitation and assessment protocols are being embedded in programmes and schools, universities, training programmes and in SAICA’s continuous partnerships to deliver professional development programmes the competencies defined in the CA2025 initiative Implementing SAICA’s SAICA’s strategy is being implemented and is being reported on new strategy throughout the integrated report Accrediting the The University of Venda