From intergrated annual report for year ended 31 December 2022

Sound corporate governance standards create value for the Bell Equipment group by ensuring the sustainability of the business and by enhancing long term equity performance, in addition to the benefits that good governance brings to society at large and to the groupís stakeholders in particular. As environment, social and governance (ESG) considerations have risen to prominence in recent years, the groupís emphasis on governance, dealt with in this report, is recognised as a crucial constituent part of the broader ESG framework that contributes to ensuring its sustainability and long term performance.

Compliance governance

The groupís governance and compliance framework is founded on the principles of accountability, transparency, ethical management and fairness. Governance processes and group policies are regularly reviewed to ensure alignment with regulatory changes, reflect evolving best practice, seek out opportunities to incrementally improve the groupís governance and ascertain whether the policies and processes are still fit for purpose as the groupís businesses change over time.

The company has complied with its MOI, the provisions of the Companies Act and, in all material respects, complied with the laws of the countries in which Bell does business, including the laws of South Africa, where the company is incorporated.

In the past year, notable governance matters in the group included the following:

ē the appointment of independent non executive director Hennie van der Merwe as the lead independent non executive director of the board, following the resignation of long serving non executive director and lead independent non executive director John Barton in February 2022;

ē in considering the appropriateness of the size, composition and diversity of the board to ensure its effectiveness, the appointment of two new independent non executive directors, namely Usha Maharaj and Markus Geyer in April 2022, bringing with them valuable insight and experience;

ē while welcoming a return to in person board meetings, the group continued to make increasing use of technology, including virtual meetings for board and committee meetings and for the annual general meeting which was held virtually in May 2022;

ē in line with the IRBAís mandatory audit firm rotation rule, the board recommended for appointment by shareholders PWC as the groupís external auditor with effect from the financial year commencing on 1 January 2024;

ē the review and extension of the long term incentive scheme for participating Bell employees was undertaken by the remuneration committee; and

ē the ongoing monitoring of King IVTM and other material legislation affecting the group.

The group has an established and comprehensive group approvals framework that is reviewed annually and is aimed at clarifying the various limits of authority in place within the group.

The board recognises that delegating authority does not reduce the responsibility of directors to discharge their statutory and common law fiduciary duties. As a parent company Bell Equipment Limited strives to exercise appropriate governance oversight over its subsidiaries while acknowledging their independence and the legal and governance responsibilities that apply to each subsidiary.

A key responsibility of the board is setting and steering the strategic direction of the group with the aim of supporting the achievement of good performance against its strategic objectives while taking into account the interconnectedness of its core purpose, risks and opportunities, business model, performance and sustainable development.

The board and the GEC work closely in determining the strategic direction and objectives of the group. The strategic vision of the group is set out on page 16.
On an annual basis the GEC formally presents the short, medium and long term strategy to the board which challenges it constructively in respect of its assumptions, time frames and objectives and, if satisfied, formally approves the strategy, budget and targets for the ensuing year.

King IVTM principles

Bell Equipment supports the governance outcomes, principles and practices of King IVTM. The group views developments and governance trends as opportunities to continuously improve and entrench its own standards. The group has applied the King IVTM report throughout the 2022 financial year and the directors confirm that the group has in all material respects voluntarily applied the principles of the code. The application of King IVTM is covered in the King IVTM register 2022 available here.

Ethics

Good corporate governance is essentially about effective, ethical leadership. While leadership starts with each individual director, it finds its expression through the board as a collective, setting the appropriate example and tone, which is referred to as ethical governance.

The group will not engage in, condone or tolerate any corrupt practices and rejects all forms of dishonesty, fraud, corruption and unethical behaviour.

The Bell group has a developed code of business conduct, a code of ethics and a prevention of fraud and commercial crime policy and is continuously involved in group wide efforts to reemphasise the ethical values that underpin these codes and policies and to provide regular ethics training to its employees.

Through the code of ethics and code of business conduct, the group confirms its commitment to high ethical and legal standards in dealing with its stakeholders. The board accepts responsibility for ensuring that the groupís business is conducted honestly, fairly, legally, reasonably and transparently.

Management is driving this leadership culture of ethical conduct by establishing the correct tone at the top in respect of the groupís corporate culture by ensuring it is based on the 1-BELL philosophy and aligning it to evolving best practice.

Corruption is a risk that is managed on an ongoing basis, particularly in the diverse areas in which the group operates.

Ongoing awareness training on the prevention of fraud and commercial crimes and the entrenchment of applicable policies set stringent standards relating to fraud and the prosecution of offenders, the acceptance of gifts from third parties and declarations of potential conflicts of interest.

A group fraud risk assessment was developed and is frequently reviewed, mitigating action plans and controls are in place and are updated as and when required.

The annual submission by employees of their electronic employee governance declarations confirming their compliance to the group codes and policies; their declaration of any potential conflicts of interest as set out in the conflicts of interest policy as well as their disclosure of any approved outside activities continues to be undertaken. Any non compliance with policies or perceived material conflicts of interest is reviewed and addressed by the GEC.

The established fraud working group meets quarterly or more regularly when required and monitors and oversees the investigation of all fraud related and unethical matters and reassesses the adequacy of the internal control environment (particularly those controls directly impacting on the incidents).

The fraud working group provides strategic guidance to different departments on fraud and unethical behaviour detection and preventative actions. The staff are encouraged to report suspected fraudulent or unethical behaviour on a confidential basis via the anonymous tip off reporting line. This service is administered independently by a professional services firm, and enables all stakeholders to anonymously report environmental, safety, ethics, accounting, auditing and control issues or other concerns.

Awareness of this facility is created through presentations, newsletters and encouragement of staff to report such incidents before significant losses are incurred. All matters reported through the anonymous tip off reporting line are also assessed by the fraud working group and meetings are set up with the internal auditors and investigators to ensure matters are effectively investigated in terms of the prevention of group fraud and commercial crime policy. The follow up on all reported matters is reported to the audit and risk and sustainability committees.

Financial statements and external review

As a part of Bell Equipmentís corporate governance policy, the implemented standards and systems of internal controls continue to be improved by management to provide reasonable assurance on the integrity and reliability of the financial statements and to adequately safeguard, verify and maintain accountability for shareholder investments and group assets.

The board is of the opinion that the internal financial controls are adequate and that the financial records can reliably be used for preparing the financial statements in accordance with IFRS and to maintain accountability for the groupís assets and liabilities.

The board has identified and defined the critical internal financial controls and understood the impact of control failure on the group, developed a framework to establish an approach for the evaluation of the identified controls and developed a standard consolidated report of the critical controls identified and evaluated to monitor the level of adequacy and effectiveness frequently. This allows the chief executive and chief financial officer to provide the necessary representation in terms of the JSE Listings Requirements that the essential internal financial controls are adequate and operating as intended.

During the year under review no matters came to the attention of the directors to indicate that a breakdown in the functioning of controls, resulting in material loss to the group, had occurred during the year and up to the date of this report.

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