New Clicks Holdings is fully committed to effective corporate governance which it believes is fundamental to the achievement of business objectives and the fulfilment of corporate responsibilities. The group supports the Code of Corporate Practices and Conduct as set out in the King Report, and the directors endorse its aim of conducting the affairs of the company with the highest standards of corporate practice.

Board of Directors
The board meets at least four times a year. The positions of chairman and chief executive officer are held by separate individuals. All directors have access to the advice and services of the company secretary and are entitled, at the company's expense, to seek independent professional advice about the affairs of the group or to call a meeting of the board.

Remuneration committee
A remuneration committee, comprising non-executive directors, is responsible for approving the remuneration and the terms and conditions of employment of the executive directors and senior executives.

Financial control
The directors acknowledge and recognise that they are responsible for the company's system of financial control. The board has established a system of controls and procedures of a high standard to ensure the accuracy and integrity of the accounting records and to effectively monitor the group's businesses and their performance.
The system encompasses a wide range of checks and balances as well as interactive controls which include:

o an approval framework with clearly defined authority limits which sets levels of materiality on the full range of activities affecting the group;

o a comprehensive budgeting system;

o monthly reporting of income statement and balance sheet;

o regular reporting on treasury, legal, pension, medical aid and insurance matters.

The controls provide reasonable assurance that assets are safeguarded from loss or unauthorised use and that the financial records may be relied on for preparing the financial statements and maintaining accountability for assets and liabilities. These controls are augmented by accounting policies and organisational structures that provide for the division of responsibilities and the careful selection and training of financial personnel.

Financial statements
The directors are solely responsible for the preparation of the financial statements and related financial information that fairly present the state of affairs and the results of the company and the group. The external auditors are responsible for independently reviewing and reporting on these financial statements.

The financial statements set out in this report have been prepared by management in accordance with South African Statements of Generally Accepted Accounting Practice. They are based on appropriate accounting policies which are supported by reasonable and prudent judgements and estimates.

Audit committee
The audit committee comprises the non-executive directors of the company. There are written terms of reference which deal adequately with the membership, authority and duties of the committee. The committee, under the chairmanship of non-executive director Mr E. Osrin, meets formally twice a year. The chief executive and finance director attend these meetings.

The internal audit manager and the external auditors attend all the meetings and have unrestricted access to the chairman of the audit committee.

The main function of the audit committee is to report to the board on the effectiveness of the financial controls to safeguard the group's assets and to promote the financial integrity of reporting.

To achieve this it is the committee's responsibility:

o to ensure that management imposes no limitation on the scope of the audit and does not put pressure on or interfere with the auditors;

o to review and approve the appropriateness of accounting and disclosure policies in the annual financial statements;

o to assess the effectiveness of internal controls;

o to review action taken on major accounting problems.

Internal audit
The internal audit function is recognised as an important part of corporate governance. Internal audit, which reports to the audit committee, is an independent appraisal function to examine and evaluate the group's activities. Its objective is to assist members of executive management in the effective discharge of their responsibilities. The scope of the internal audit function includes reviews of the reliability and integrity of financial and operating information, the systems of internal control, the means of safeguarding assets, the efficient management of the group's resources and the efficient conduct of its operations.

Internal control
The board of directors is responsible for the group's systems of internal control. These systems are designed to provide reasonable, but not absolute, assurance against inaccurate internal financial information and other irregularities.

The board, through the audit committee, has reviewed the effectiveness of the systems of internal control for the year under review. This review has revealed nothing to indicate that the systems of internal control were inappropriate or unsatisfactory.

Worker participation
The group has a policy of encouraging employee involvement in a wide range of issues. Various participative structures are designed to achieve good employer-employee relationships through effective sharing of information, consultation and the identification and resolution of conflict.

Employment equity
The group continues to be committed to Employment Equity at all levels. Training, development and new opportunities are accessible to all employees.

Code of ethics
All employees of the group are required to maintain the highest ethical standards in ensuring that the group's business practices are conducted in a manner that in all reasonable circumstances is above reproach.

A culture involving the individual employee assuming personal responsibility for the actions of the business is encouraged, as is a culture of full disclosure.

Going concern
The annual financial statements and group annual financial statements set out on pages 33 to 52 have been prepared on the going concern basis, since the directors have no reason to believe that the company and the group will not continue to function as going concerns in the foreseeable future.