Overwhelmingly the Competition Tribunal appeared to be held in high esteem by respondents ...

124 Pages·2013·4.03 MB·English

2012ANNUAL
2013REPORT

CONTENTS
CONTENTS PAGE
LIST OF ABBREVIATIONS AND ACRONYMS 5
PART 1: REPORTS
Report of the Auditor-General to Parliament on the Competition Tribunal 8
Audit committee’s report 10
Risk committee’s report 11
Chairperson’s report 13
PART 2: CASE HIGHLIGHTS
Introduction 22
Mergers and acquisitions 22
Prohibited practices 28
PART 3: OPERATIONAL REVIEW
Introduction 40
Training and development 41
Administrative training and team building 44
Short term internships 45
Tanzanian study tour 47
Communicating the work of the Tribunal 47
Customer satisfaction survey 50
Corporate governance 51
Compliance with legislation 57
Occupational health and safety 59
Ethics 59
PART 4: THE COMPETITION APPEAL COURT
Introduction 64
Cases before the CAC 65
PART 5: FINANCIAL OVERVIEW
Financial management 68
Annual financial statements 71
PART 6: APPENDICES 104
Competition Tribunal South Africa Annual Report 2012/13 3

ABBREVIATIONS
LIST OF ABBREVIATIONS AND ACRONYMS
The Act The Competition Act 89 of 1998
The Tribunal The Competition Tribunal of South Africa
The Commission The Competition Commission of South Africa
Senmin Senmin International (Pty) Ltd
Cellulose Derivatives Cellulose Derivatives (Pty) Ltd
CMC Carboxymthylcellulose
Media 24 Media 24 Limited
Natal Witness Natal Witness Printing and Publishing Company (Pty) Ltd
Gold Circle Gold Circle (Pty) Ltd
Kenilworth Kenilworth Racing (Pty) Ltd
Life Healthcare Life Healthcare Group (Pty) Ltd
JMH Joint Medical Holdings Ltd
Nestlé Nestlé SA
Paarl Coldest Paarl Coldset (Pty) Ltd
Glencore Glencore International AG
Optimum Coal Optimum Coal Holdings Ltd
SAPIA South African Petroleum Industry Association
SAPEG South African Petroleum and Energy Guild
Telkom Telkom SA Ltd
Petzetakis Petzetakis Africa (Pty) Ltd
Vulcania Vulcania Reinforcing (Pty) Ltd
RMS Reinforcing Mesh Solutions
DSI Dywidag Systems International (Pty) Ltd
Videx Videx Wire Products (Pty) Ltd
RSC Ekusasa RSC Ekusasa Mining (Pty) Ltd
SCA Supreme Court of Appeal
SAVA South African Vans Association
ISP Internet service provider
VANS provider Value added network service provider
CAC Competition Appeal Court
HDI Historically disadvantaged individual
ICN International Competition Network
OECD Organisation for Economic Cooperation and Development
CFO Chief financial officer
EDD Economic Development Department
PFMA Public Finance Management Act
EXCO Executive committee
RC Risk committee
RMC Risk management committee
RCC Risk coordination committee
FPC Fraud prevention committee
VAT Value added tax
OHS Occupational health and safety
CCoommppeettiittiioonn TTrriibbuunnaall SSoouutthh AAffrriiccaa AAnnnnuuaall RReeppoorrtt 22001122//1133 55
“Overwhelmingly the Competition Tribunal
appeared to be held in high esteem
by respondents across the different
stakeholder segments included in this
phase of the survey. The Tribunal was
perceived to be executing its mandate in a
very competent and consistent manner.”
[Plus 94, results of stakeholder satisfaction
survey 2013]
PART 1
PART 1: REPORTS
Report of the Auditor-General to Parliament on the
Competition Tribunal
Audit committee’s report
Risk committee’s report
Chairperson’s report
Competition Tribunal South Africa Annual Report 2012/13 7
Part 1: Reports
RepoRt of the audit in accordance with the Public the year then ended in accordance
Audit Act of South Africa, 2004 (Act with SA Standards of GRAP and the
AuditoR-GeneRAl to
No. 25 of 2004) (PAA), the General requirements of the PFMA.
pARliAment on the
Notice issued in terms thereof and
Competition tRibunAl International Standards on Auditing. Report on other legal and
Those standards require that I comply regulatory requirements
Report on the financial with ethical requirements and plan
statements and perform the audit to obtain 7. In accordance with the PAA and
reasonable assurance about whether the General Notice issued in
introduction the financial statements are free from terms thereof, I report the following
material misstatement. findings relevant to performance

against predetermined objectives,
1. I have audited the financial statements
4. An audit involves performing compliance with laws and regulations
of the Competition Tribunal set out on
procedures to obtain audit evidence and internal control, but not for the
pages 72 to 101 which comprise
about the amounts and disclosures in the purpose of expressing an opinion.
the statement of financial position
financial statements. The procedures
as at 31 March 2013, the statement
selected depend on the auditor’s predetermined objectives
of financial performance, statement
judgement, including the assessment
of changes in net assets, the cash
of the risks of material misstatement 8. I performed procedures to obtain
flow statement for the year then
of the financial statements, whether evidence about the usefulness and
ended, the statement of comparison
due to fraud or error. In making those reliability of the information in the
of budget and actual amounts and
risk assessments, the auditor considers annual performance report as set out
notes, comprising a summary of
internal control relevant to the entity’s on pages 36 to 37 and 60 to 61 of
significant accounting policies and
preparation and fair presentation of the the annual report.
other explanatory information.
financial statements in order to design
Accounting authority’s responsibility audit procedures that are appropriate 9. The reported performance against
in the circumstances, but not for the predetermined objectives was
for the financial statements
purpose of expressing an opinion evaluated against the overall criteria
on the effectiveness of the entity’s of usefulness and reliability. The
2. The accounting authority is
internal control. An audit also includes usefulness of information in the annual
responsible for the preparation and
evaluating the appropriateness of performance report relates to whether
fair presentation of these financial
accounting policies used and the it is presented in accordance with the
statements in accordance with South
reasonableness of accounting estimates National Treasury annual reporting
African Standards of Generally
made by management, as well as principles and whether the reported
Recognised Accounting Practice
evaluating the overall presentation of performance is consistent with the
(SA Standards of GRAP) and the
the financial statements. planned objectives. The usefulness of
requirements of the Public Finance
information further relates to whether
Management Act of South Africa,
5. I believe that the audit evidence indicators and targets are measurable
1999 (Act No.1 of 1999) (PFMA),
I have obtained is sufficient and (i.e. well defined, verifiable, specific,
and for such internal control as the
appropriate to provide a basis for my measurable and time bound) and
accounting authority determines is
audit opinion. relevant as required by the National
necessary to enable the preparation
Treasury Framework for managing
of financial statements that are free
opinion programme performance information.
from material misstatement, whether
due to fraud or error.
6. In my opinion, the financial statements The reliability of the information in
present fairly, in all material respect of the selected objectives
Auditor-General’s responsibility
respects, the financial position is assessed to determine whether
of the Competition Tribunal as at it adequately reflects the facts (i.e.
3. My responsibility is to express an
31 March 2013, and its financial whether it is valid, accurate and
opinion on these financial statements
performance and cash flows for complete).
based on my audit. I conducted my
8 Competition Tribunal South Africa Annual Report 2012/13
10. There were no material findings internal control
on the annual performance report
concerning the usefulness and 15. I considered internal control relevant
reliability of the information. to my audit of the financial statements
and compliance with laws and
Additional matter regulations. The matters reported
below under the fundamentals of
11. Although no material findings internal control are limited to the
concerning the usefulness and significant deficiencies that resulted in
reliability of the performance the findings on compliance with laws
information were identified in the and regulations included in this report.
annual performance report, I draw
attention to the following matter. leadership
Achievement of planned targets 16. The accounting authority did not
exercise sufficient oversight to ensure
12. Of the eighteen planned targets, only compliance with applicable laws
ten targets were achieved during the and regulations with regard to supply
year under review. This represents chain management.
44.44% of total planned targets that
were not achieved during the year financial and performance
under review. For further details on management
the extent and reasons for deviations
between planned targets and actual 17. Management did not take adequate
performance refer to the annual action to ensure compliance with
performance reports on pages 36 supply chain management policies
and 60. and procedures.
Compliance with laws and
regulations
13. I performed procedures to obtain
evidence that the entity has complied pretoria
with applicable laws and regulations 31 July 2013
regarding financial matters, financial
management and other related
matters. My findings on material non-
compliance with specific matters in
key applicable laws and regulations
as set out in the General Notice
issued in terms of the PAA are as
follows:

expenditure management
14. The accounting authority did not take
effective steps to prevent irregular
expenditure as required by section
51(1)(b)(ii) of the Public Finance
Management Act.
Competition Tribunal South Africa Annual Report 2012/13 9
Part 1: Reports
Audit Committee RepoRt the effectiveness of internal evaluation of annual financial
control statements
We are pleased to present our report for
the financial year ended 31 March 2013 The system of internal controls applied by the The audit committee has:
entity over financial and risk management • reviewed and discussed the audited
Audit committee members and is effective, efficient and transparent. In annual financial statements to be
attendance line with the PFMA and the King III Report included in the annual report, with the
on Corporate Governance requirements, Auditor-General and the accounting
The audit committee of the Tribunal consists internal audit provides the audit committee authority;
of the members listed in Table 1 and is and management with assurance that • reviewed the Auditor-General’s
required to meet four times per annum as the internal controls are appropriate and management report and
per its approved terms of reference. During effective. This is achieved by means of management’s response thereto;
the year under review four meetings were the risk management process as well as • reviewed the entity’s compliance with
held. The audit committee’s meetings have the identification of corrective actions and legal and regulatory provisions;
regularly included the internal auditors suggested enhancements to the controls
and representatives from the office of the and processes. From the various reports The audit committee concurs with and
Auditor-General. of the internal auditors, the audit report on accepts the Auditor-General’s report on
the annual financial statements, and the the annual financial statements, and is
Audit committee responsibility management report of the Auditor-General of the opinion that the audited annual
South Africa, it was noted that no matters financial statements should be accepted
The audit committee reports that it has were reported that indicate any material and read together with the report of the
complied with its responsibilities arising deficiencies in the system of internal control Auditor-General.
from section 55(1) of the PFMA and or any deviations therefrom. Accordingly, we
Treasury Regulation 27.1.7 and 27.1.10 can report that the system of internal control internal audit
(b) and (c). over financial reporting for the period under
review was efficient and effective. The audit committee is satisfied that
The audit committee also reports that it the internal audit function is operating
has adopted appropriate formal terms of the quality of in year effectively and that it has addressed the
reference as its audit committee charter, management and monthly/ risks pertinent to the entity and its audits.
quarterly reports submitted in
has regulated its affairs in compliance
with this charter and has discharged all terms of the pfmA Auditor-General of South Africa
its responsibilities as contained therein.
Accordingly the audit committee operates The audit committee is satisfied with The audit committee has met with the
in accordance with the terms of the said the content and quality of monthly and Auditor-General to ensure that there are no
charter and is satisfied that it has discharged quarterly reports prepared and issued by unresolved issues.
its responsibilities in compliance therewith. the accounting authority of the entity during
the year under review.
Table 1: Audit committee members and attendance
Number of
Number of
Status of meetings
Name meetings
member required to
attended Victor Nondabula
attend
Chairperson of the audit committee
V.Nondabula (AC Chair - term ends Non- executive 4 4
October 2014) 31 July 2013
K.Teixeira (Risk Chairperson - term ends Non-executive 4 4
October 2013)
M.Ramataboe (term ends October 2013) Non-executive 4 4
N.Mhlongo (term ends October 2013) Non-executive 4 4
S. Gounden (term ends October 2013) Non-executive 4 4
10 Competition Tribunal South Africa Annual Report 2012/13