International Actuarial Association...our Deloitte Governance Framework, as illustrated in the...

International Actuarial

Association

Measuring up to governance best

practice

July 2013

July 2013

Desmond Smith

Immediate Past President

International Actuarial Association

Dear Desmond

Governance Review Proposal

Thank you for the opportunity to provide you with a proposal to assist the International Actuarial

Association (IAA) in performing a Governance Review.

Based on our discussion, we understand that the IAA requires the assistance of Deloitte in facilitating

the Governance Review process. You have brought to our attention certain concerns raised by the

Society of Actuaries and the Institute and Faculty of Actuaries.

We have prepared this proposal to provide the IAA with our approach in providing assistance with the

governance review process you are about to embark. We also provide you with our proposed client

service team, our estimate fee and our experience.

Based on our experience gained through performing various engagements pertaining to the design

and effectiveness of governance structures, we are confident that we can assist you in achieving your

objectives in the best interests of all stakeholders. Should you require any further information, please

call Munier Damon on 021 427 5657 or 083 234 2336.

Yours faithfully

Munier Damon

Director

IAA Governance Proposal

July 2013

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1. Our understanding

As discussed the IAA has received communications from your members (Society of Actuaries and the

Institute and Faculty of Actuaries) raising certain concerns in respect of IAA processes. The IAA has

decided to conduct a Governance Review that would include matters raised by these members.

Our understanding of Deloitte’s role in this assignment would be to assist the IAA in the following:

developing a robust approach to assessing the governance model

assisting in developing the assessment criteria and questions

assisting in the interpretation and presentation of the results

This proposal has been prepared for the IAA to demonstrate our response to your requirements

above.

“A governance operating model is the

mechanism used by the board and

management to translate the elements of

the governance framework and policies

into practices, procedures, and job

responsibilities within the corporate

governance infrastructure.”

Deloitte Whitepaper – Developing effective governance


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2. Our approach

The assessment of the IAA Governance process will be performed as follows:

Phase I - developing a robust approach to assessing the governance matters

Phase II - assisting in developing the assessment criteria and questions

Phase III - assisting in the interpretation and presentation of the results

Phase I

Evaluating the current status and providing an agreed upon approach

As an international body with multiple stakeholders (members / associate members / council /

committees) it is important that the approach followed in performing the governance assessment is

prepared to take into account these stakeholder matters. Our approach will be customised and

developed to enable the stakeholders to gain a level of comfort in the process being followed by the

IAA in assessing its governance processes and structures.

We will prepare an approach document for the consideration of the IAA and once finalised this

approach will be distributed to the key stakeholders to ensure all matters will be addressed by the

assessment.

Matters to be considered during this part of the engagement include:

Concerns raised by the members (Society of Actuaries and the Institute and Faculty of

Actuaries)

Statutes, Internal Regulations, Policies and Protocols of the IAA

Applicable international governance frameworks

Approach in delivering the governance operating model

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July 2013

Phase II

Provide Governance Assessment Criteria

Once the approach to performing the governance assessment has been finalised and agreed we

will continue with the development of the governance review questionnaire. In the development of

the questionnaire we will assist the IAA in developing governance assessment criteria that

specifically address the following:

Governance Structure

Appointment process for leadership, executive subcommittees and statutory committees

Representation determination process

Assessing respective roles of the committees

Assessment of the functional reporting of the forum into the committee

Strategy

Assessing the strategic planning process

Assessing the members/delegates input process into the strategic plan

Monitoring of the strategic performance process

Committee Activity

Diversity

Contributions by committees in line with the strategic objectives

Risk assessment /Funding

Assess the dependence of the IAA on limited funders


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We will also ensure that best practice governance areas are included in the questionnaire based on

our Deloitte Governance Framework, as illustrated in the diagram below:

The governance questionnaire will be presented to the IAA for review and comment before

finalisation.

The IAA will then host the questionnaire on its own internet based survey tool.

Phase III

Assessment of the results of the questionnaire

Once the members have completed the questionnaire, the results will be consolidated and reviewed

by the Deloitte team. Deloitte will assess the results and provide a written report to the IAA. We will

also assess where the results of the questions are not ideal and provide recommendations on how to

improve the assessment area.


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3. Our team

The governance assistance is performed using senior members of the Risk Advisory service line to

ensure the appropriate level of professionalism, expertise and broad business knowledge and

exposure. The proposed team is as follows:

Munier Damon

Director

Education

CIA

Munier is a Director in our Risk Advisory division of Deloitte with

over 13 years experience in governance, risk management and

internal audit. He takes responsibility for the management of

outsourced and co-sourced internal audits, risk and control as well

as governance related work at many of our firm’s clients in the

Western Cape.

Munier will be responsible for overall project management to ensure

that all of our services are delivered effectively and that our delivery

on all services is in line with your requirements. Munier will also

ensure the overall quality of outputs. Munier is a Certified Internal

Auditor (CIA) and an accredited International Internal Audit Quality

Assessor through the Institute of Internal Auditors.

Johan Erasmus

Director

Education

BLC LLB LLD

Global Reporting Initiative

Certified

Johan is a regulatory analyst with a special focus on the Companies

Act, King III, Integrated Reporting and consumer protection

legislation.

Johan has consulted with a number of institutions on matters

pertaining to governance and King III, Integrated Reporting, the

management of compliance and regulatory risk, including the

design, establishment and performance of the compliance function,

and the implementation of measures to ensure cost-effective

compliance with a wide range of regulation, most notably the

Companies Act and the National Credit Act.

He is Chairperson of the SAICA Legal Compliance Committee, and

a member of the SAICA Corporate Law Ad Hoc Committee.

Johan’s clients include: Barloworld, Sanlam, Momentum Health,

Tongaat Hulett, Reunert, Eskom, Nedbank, Imperial and Mondi.


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Claire Hoy

Associate Director

Education

Bachelor Business Science

Global Reporting Initiative

Certified

CIA and CRMA

Claire is an Associate Director in Risk Advisory and has ten years of

experience in audit, governance and risk management and

sustainability services. Claire Hoy is involved in the Governance,

Risk and Integrated reporting services with specific focus on the

retail industry, her clients include Clicks Group, Pepkor, Sanlam,

Santam and MMI.

She has led teams on sustainability assurance assignments and

ensured that the limited/ reasonable assurance engagements are

delivered in line with her client expectations. Claire is GRI certified

and works closely with the GRI, IRBA and other industry forums to

influence the suitability assurance processes. Claire has experience

in providing assurance in line with the ISAE 3000 standard.


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4. Our experience

The following are specific examples of corporate governance reviews which we have

performed:

Nedbank

Our initial review of Governance structures and processes was to provide the Nedbank Board of

Directors with assurance regarding their governance structures and processes, which would enable

them to sign off on the governance requirements of the Banks Act in South Africa. Subsequently we

have performed follow up reviews of governance structures and processes to provide the Board and

the external auditor assurance regarding the status of Nedbank Governance to enable them to sign

off on the requirements of the Banks Act.

Firstrand Bank

We reviewed the current charters in place for the FRB Board and Board Committees, benchmarked

these charters against governance best practice both locally and internationally, and made

recommendations for improving the charters, as well as Board structures and processes. In addition,

we reviewed audit committee structures, processes and authorities, and made recommendations for

improvements and provided templates to assist with implementation of certain of these improvements.

Financial Services Board

We performed a high level review of their Governance structures and processes, benchmarking

against best practice corporate governance guidelines. Recommendations were made to improve

governance processes where appropriate.

Sanlam




Pioneer Foods




Merchant Bank Ghana

Although Ghana does not have a formal governance benchmark, we performed a high level

governance review and benchmarked the Merchant Bank’s governance structures and processes

against the requirements of the King Code. The report identified areas for improvement and

recommendations regarding how governance could be improved.

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July 2013

Hannover Re

A high level assessment of corporate governance structures and process including a report detailing

areas for improvement and areas of good governance practice.

National Treasury

We developed a Corporate Governance Framework for all national non-business entities and

government business enterprises, listed as Schedule 3A and 3B entities in the Public Finance and

Management Act of 1999 (PFMA), and their subsidiaries. The framework also included high-level

guidelines on certain aspects of Financial Management governance, and detailed guidelines on

procurement practices within these entities.

South African Airways (SAA)

SAA required assurances regarding both the appropriateness and effectiveness of certain of their

corporate governance practices, to support both effective direction and governance on the one hand

as well as effective management and operations on the other. Our review included a high level

evaluation of Governance structures and practices in terms of best practice, and recommendations for

improvement.

SAB Miller Limited

Our review included the Board of Directors and committee structures and processes, and the

establishment and on-going monitoring of Audit Committees throughout the African operations.

Murray and Roberts

This review involved Board and Board committee processes, authorities frameworks and business

risk management processes with emphasis on decision making processes and their effect on

operations and ensuring operational accountability to group executives and the board.

Cell C

We conducted a review of Board and Board committee processes, authorities frameworks and

business risk management processes. In addition, we assisted with the implementation of Charters

and terms of reference for the Board and Board Committees and the development of a code of

conduct for the organisation.

The Department of Trade and Industry

We performed a review of Corporate Governance processes and structures throughout the DTI,

benchmarked these against best practice and reported on the status of governance and made

recommendations for improvement.

Capitec Bank

Review of Board structures and processes.

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July 2013

Oceana Group Limited


Brimstone Investment Corporation Limited



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5. Proposed Fee

Proposed fee for this enagement

We have prepared our proposed fee for your consideration below:

Area Hours Fee

Phase I 8 R24,000

Phase II 24 R72,000

Phase III 12 R36,000

Total R132,000

Note: Disbursements will be billed at actual costs incurred, and will include travelling, and other

incidental costs. The amounts above are exclusive of Value Added Taxation.

“A governance operating model has the potential to address this need and thus enhance management’s ability to implement governance and the board’s ability to exercise proper oversight.”

Deloitte Whitepaper – Developing effective governance


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6. Acceptance

Acceptance of terms and conditions

Please sign the acceptance of proposal form to indicate your acceptance of this engagement and

return it for the attention of Munier Damon. Should you wish to discuss any aspect of this proposal,

please do not hesitate to contact Munier Damon.

We agree with the terms, conditions and fees as set out.

Name: _____________________________________________________

Date: ______________________________________________________

Position: ____________________________________________________


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7. Standard terms and conditions

All services provided by Deloitte to a client in accordance the written agreement with that client will

be subject to the following Standard Terms and Conditions in addition to what is stated specifically in

the written agreement.

1. Definitions

1.1 Unless the context clearly indicates otherwise:

reference to any gender shall include the other genders

the singular shall include the plural

1.2 In these Standard Terms and Conditions, the words and phrases set out below have the

following meanings:

1.3 Client means the entity/entities, or the persons, named in the written agreement to which or

whom services are to be provided by Deloitte, including a firm of attorneys mandating

Deloitte to perform the services on behalf of its client, as the case may be. In this regard, the

Client is MMI Holding.

1.4 Deloitte means Deloitte & Touche; any division of Deloitte & Touche; any company owned or

managed by Deloitte & Touche; the partners, directors and employees of Deloitte & Touche;

and the directors, officers and employees of any company owned or managed by Deloitte &

Touche. The contracting element of Deloitte will usually be identified by our letterhead or set

out in the written agreement.

1.5 Entity(ies) includes any association, business, close corporation, company, concern,

enterprise, firm, partnership, natural person, trust, undertaking, voluntary association, joint

venture, consortium or other similar entity, whether incorporated or not.

1.6 Party(ies) means the client and Deloitte respectively.

1.7 Services mean the audit, project, engagement, assignment procedure, investigation,

assistance, advice, report, certificate, or other services to be rendered by Deloitte as set out

in the written agreement. This will also include any goods, products or other items to be

supplied by Deloitte that the written agreement stipulates.

1.8 Terms and Conditions means these Standard Terms and Conditions that are attached to

the written agreement.

1.9 Written agreement means the letter of engagement, or contract, or proposal, or other

document between the client and Deloitte setting out the services to be provided and the

related terms and conditions.

2. Headings have no effect

2.1. The headings in the written agreement and in these terms and conditions shall not in any way

affect or govern the interpretation or construction of the applicable terms and conditions.

3. General principles

3.1. The services, written agreement and any related matters are governed by South African

law and any claims will be subject to the exclusive jurisdiction of the courts in South Africa. In

the case of a dispute between the parties and if the parties so agree by mutual consent, the

matter may be referred to arbitration on terms agreed between the parties, in which case the

findings of the arbiter is regarded as final and binding, and the jurisdiction of the courts are

thereby specifically excluded.

3.2. The written agreement and these terms and conditions, together with any documents

specified in the written agreement, constitute the entire agreement between Deloitte and

the client and supersede any prior oral or written representations, if any. They may be varied

only by the written agreement of both Deloitte and the client.


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3.3. Deloitte and the client are independent contractors. Neither party shall act or represent itself

as an agent or employee of the other and shall not in any manner assume or create an

obligation of, or in the name of, the other.

4. Validity

4.1 Where the written agreement is in the form of a proposal, it shall be valid for a period of

30 days from the date of issue, unless otherwise indicated. Where there is a conflict between

the terms in the written agreement and these terms and conditions, these terms and

conditions will apply. On acceptance of such proposal, within the period of validity, the

proposal becomes the written agreement.

5. Provision of services

5.1. Deloitte will endeavour to deliver the services with the requisite level of skill, integrity and

professional competence.

5.2. Where the delivery of the services requires information from, or the co-operation of, officials

and employees of the client, the client undertakes to use its best efforts to ensure that its

directors, management, officials and employees are available when required and that they

provide the necessary information and co-operation on a timely basis. Reasonable facilities

and access to data and information will be provided by the client.

5.3. The Engagements shall be rendered by Nina le Riche, Dr Johan Erasmus and Claire Hoy.

5.4. To the extent applicable, our work might be based on discussions with client management

and staff and certain third parties, as well as the perusal of documentation and accounting

records made available to us. Unless otherwise indicated in our reports, such information will

not be verified or audited by us. Although we shall take reasonable steps to ensure that the

information obtained in the course of the investigation is authentic, we cannot guarantee this.

5.5. To the extent applicable, our report or findings will be based on information made available to

us by the client. We do not warrant or guarantee that we will be able to obtain or be given

sight of all relevant information. Our report or findings may change if additional information

becomes available after the initial issuing thereof.

5.6. The client shall apply its best efforts to procure that Deloitte is provided with access to any

and all information required for the purposes of performing the services required in terms of

this engagement, including (without limitation) access to information held by the advisors to

the client and/or other relevant third parties.

5.7. The client does not assume that information furnished to Deloitte in any other capacity is

available to Deloitte during the services performed for a particular engagement, and any

information that is relevant to the services should accordingly be disclosed directly to the

Deloitte engagement team.

5.8. The client accepts that the Deloitte engagement team is authorised to speak to or meet with

such persons and/or to release such information as might be necessary, in the discretion of

Deloitte, for the performance of the services, except where such information can be

reasonably construed as highly confidential to the client, in which case Deloitte will obtain the

the client’s prior written consent to release such information (which consent shall not be

unreasonably withheld), provided that Deloitte shall be entitled to release any such

information where required by law or any court of competent jurisdiction to be released.

6. No offers of employment to be made

6.1. The client undertakes not to make any offer of employment to any Deloitte personnel

involved in delivering the services from the date of signing the written agreement until the

expiration of 6 months after the completion of the services. Similarly, the client undertakes

not to contract with any such Deloitte personnel, to the exclusion of Deloitte, for the provision

of any services for the same period.

6.2. Deloitte undertakes not to make any offer of employment to, and not to contract with, any

client personnel with whom Deloitte is involved in delivering the services on the same basis

as that set out in 6.1 above.


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6.3. Should a member of Deloitte personnel apply, within the above-mentioned period, for

employment at the client, then the client shall pay Deloitte a fee of 20% of the annual cost

of employment package of that person if he or she is employed or contracted by the client. If

the Deloitte personnel is contracted by the client for the provision of any service to the client

within the above-mentioned period, the client shall pay a fee of 20% of the total fee paid to

the contractor. These fees will be due and payable within 30 days from date of

commencement of employment and/or date of receiving each invoice from a contractor, as

relevant.

6.4. Similarly, Deloitte will pay such a fee to the client in the event of employing or contracting a

member of the client personnel with whom Deloitte had been involved in delivering the

services. The periods as quoted above apply unchanged to such situations.

7. Intellectual property

7.1 Deloitte shall retain all intellectual property rights in all materials, including methodologies,

know-how, trade secrets, software and tools used, provided or developed by Deloitte in

providing and delivering the services.

7.2 Except for cases where a licence is expressly granted by Deloitte, the client shall acquire no

rights or interest in such property.

7.3 This clause is severable from the rest of these terms and conditions and shall remain valid

and binding on the parties notwithstanding any termination of the written agreement.

8. Non-exclusivity

8.1. The client acknowledges that Deloitte provides audit, accounting, financial services,

management consulting and a variety of other services to a large and diverse range of clients.

The provision of the services to the client will not prevent Deloitte from providing the same

or similar services to other parties, some of whom could be competitors of the client or who

may be in conflict or dispute with the client.

8.2. The client also acknowledges that Deloitte may already have provided the same or similar

services to other parties.

8.3. Where Deloitte is aware of the same or similar services being provided to other or conflicting

parties, safeguards will be implemented to protect the interests of the client. These

safeguards will include the use of different personnel and other barriers to ensure the

confidentiality of information.

8.4. Whilst Deloitte will be bound by the confidentiality clauses mentioned below, Deloitte shall

have the right to use the name of the client and a description of the services as a reference

in seeking to provide services to other parties, provided that Deloitte obtains the prior written

consent of the client (which consent shall not be unreasonably withheld).

9. Confidentiality

9.1. Deloitte will keep confidential all information obtained from the client except such information

as is in the public domain, or where the client agrees to Deloitte making this information

available to other parties.

9.2. Notwithstanding clause 9.1 above, the client acknowledges that Deloitte may be required to

disclose confidential information to its legal advisers, insurers, the Independent Regulatory

Board for Auditors (IRBA), or to another party under any law requiring such disclosure.

Disclosure in any of these instances will be permissible and will not be a breach of clause 9.1

above.

9.3. The client agrees to keep confidential any methodologies, technology, know how, trade

secrets, software and tools used, provided or developed by Deloitte in providing and

delivering the services. Similarly, any information provided or developed by Deloitte will be

kept confidential, unless Deloitte expressly agrees in writing to the client making this

available to other parties.

9.4. Where the written agreement is in the form of a proposal for work to be performed and the

client does not accept the proposal, any documentation or property specifically identified by

Deloitte will be returned to Deloitte on request.


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9.5. The client acknowledges that Deloitte is required, in terms of professional standards, to

retain documentation to support the work done and any deliverables provided. Where this

documentation includes confidential information of the client, Deloitte will be entitled to retain

such documentation.

9.6. The confidentiality clauses contained herein are severable from the rest of these terms and

conditions, and shall remain valid and binding on the parties notwithstanding any termination

of this agreement.

10. Professional fees

10.1. The basis of charging professional fees is set out in the written agreement.

10.2. Disbursements and out-of-pocket expenses incurred in providing the services will be charged

at cost. These include all reasonable expenditure necessary for the successful completion of

the services including but not limited to travelling, subsistence, goods and services

purchased on the client’s behalf, communications, stationery, report and presentation

material, secretarial time and computer charges.

10.3. Statements reflecting invoices for fees and expenses/disbursements will be presented within

two (2) weeks of completion of each engagement set out in clause 5 above. Statements are

payable within 65 days of presentation.

10.4. Payments shall be made by the client without any deduction. In the event of a dispute over

an amount of fees, the amount not in dispute shall be paid on presentation of the invoice

without any set-off or counterclaim that may be alleged.

10.5. Deloitte will, at its discretion, charge interest on any invoices, or portions thereof, not paid

after 75 days of presentation. The rate of interest will be at the overdraft interest rate charged

by Deloitte’s bankers plus 2%. The charging of such penalty interest shall be without

prejudice to any other rights that Deloitte may have in law or otherwise.

10.6. The client acknowledges that Deloitte may suspend an engagement and/or the provision of

the remainder of the services until all amounts due to Deloitte for statements presented to

MMI Holdings are paid in full.

11. Use of reports and other deliverables

11.1. Any advice, report, certificate, schedule or other deliverable arising from or in connection with

the services will be for the sole use of the party or parties to whom it is addressed and may

be relied upon only by that party or parties. No person other than the party or parties to

whom it is addressed shall be entitled to place any reliance thereon for any purpose

whatsoever.

11.2. Any such advice, report, certificate, schedule or other deliverable is based on the particular

facts and circumstances of the client at a particular point in time. Consequently, such advice,

report, certificate, schedule or other deliverable may well not be relevant to another party or at

a different time and under different circumstances. Deloitte does not warrant or guarantee

that there will be no change to relevant facts and circumstances in the future or that future

events or outcomes will transpire.

11.3. Copies may be made available to the addressee’s advisors, provided that they are to be used

by the advisors solely for the purposes stated in such advice, report, certificate, schedule or

other deliverable and provided that the advisors are made aware of this clause 11.

11.4. Copies of such advice, report, certificate, schedule or other deliverable, in whole or in part,

may not be made available to any other party without the prior express written consent of

Deloitte, which consent shall not be unreasonably withheld , provided that the client may

make same available to entities within the client’s group without the prior written consent of

Deloitte.

11.5. The client indemnifies Deloitte against any claim by any third party arising from the

distribution of a copy of any report, certificate, schedule or other deliverable to a third party.

12. Reliance on client information

12.1 The services, or any portion thereof, may be dependent on information supplied by the

client. Deloitte will not be liable to the client or to any third party for any damages suffered


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as a result of the client providing any information that is incorrect or incomplete or where the

client fails to disclose any relevant information to Deloitte; and the client indemnifies

Deloitte against any claims or expenses relating thereto.

13. Limitation of liability

13.1. When the services comprise any service or services other than statutory audit, such as legal,

tax, internal audit, data analytics or forensic services, the following limitations on liability shall

apply:

13.2. The maximum liability of either party, their partners, shareholders, directors, employees, and

agents (“personnel”) in respect of any and all claims which may arise in respect of the

services and/or this written agreement shall be limited to the fees charged for these

services by Deloitte and paid by the Client. This maximum liability shall be an aggregate

liability for all claims howsoever arising, whether by contract, delict, negligence or otherwise.

Any limitation set out in this clause 13 shall not apply in the case of claims brought for breach

by Deloitte or its personnel of the confidentiality obligations contained in clause 9 or in the

case of gross negligence or wilful misconduct on the part of either party and/or their

respective personnel.

13.3. Where any services are rendered otherwise than in terms of a written agreement or in

addition to those in a previous written agreement, this clause shall apply separately to

services relating to all such services and/or each invoice issued.

13.4. Neither party, its partners, shareholders, directors, employees and agents will be liable to the

other party or any third party for any consequential, punitive or any other loss or damages

beyond the maximum liability specified in clause 13.2.

13.5. Any claims, howsoever arising, must be commenced formally within two years after the party

bringing the claim becomes aware (or ought reasonably to have become aware) of the facts

which give rise to the action and, in any event, no later than three years after any alleged

breach of contract, negligence, delict or other cause of action.

13.6. Deloitte will not be liable for any delays resulting from circumstances or causes beyond its

reasonable control, including without limitation, fire or other casualty, strike or labour dispute,

war or other violence or cause through any law, order or requirement of any governmental

agency or authority.

13.7. The client, in addition to the limitations indicated above, indemnifies Deloitte against all

liabilities, losses, damages, claims, demands and reasonable expenses including, but not

limited to attorneys’ fees and expenses, in any action brought against Deloitte by any other

party except the client in connection with or arising out of Risk Advisory services, provided

that the extent of this indemnity shall be limited to the maximum liability provided for in clause

13.2 above. This indemnity shall not apply in respect of wilful misconduct or gross negligence

on the part of Deloitte.

13.8. Deloitte shall have no responsibility or liability whatsoever in respect of any advice given or

work undertaken for the client by persons who are not partners, directors, principals,

members of staff or employees Deloitte, regardless of whether or not such persons were

introduced to the client by Deloitte.

13.9. Termination

The written agreement shall terminate after provision of the last of the services to be provided

by Deloitte to the client in accordance with the written agreement, unless earlier terminated in

terms of the provisions of this clause 13.9.

13.10. The written agreement may be terminated by the client on 7 days written notice to Deloitte.

13.11. The written agreement may be terminated forthwith by the client or Deloitte in the event of

either party going into liquidation or having a judicial manager appointed over all or part of its

activities.

13.12. In the event of either the client or Deloitte being in breach of any of the terms of the written

agreement, the other party may, by written notice require the party which is in breach to

remedy such breach. If this has not been remedied within 7 days of receipt of such notice, or


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if the breach is incapable of being remedied, the other party may in writing terminate the

written agreement without prejudice to its right to claim damages

13.13. Deloitte reserves the right to terminate the engagement with immediate effect if, in the sole

discretion of Deloitte, the physical safety, well-being or security of our staff is compromised

or threatened due to the environment where the services are provided and/or the nature of

the services performed during this engagement. Such termination shall not take place

without consultation with the client. Should the agreement be terminated for the reasons

contemplated in this clause, the client will remain liable for the fees in respect of all work

carried out to the date of termination.

14. Legal addresses and notices

14.1. The client and Deloitte each choose the address set out opposite its name on its letterhead

covering the written agreement or in the address clause of the written agreement as its

legal address. Any changes to such address will be communicated to the other party by

written notice.

14.2. Any notice to be given in terms of the written agreement or these standard terms and

conditions must be in writing and delivered to the legal address of the party concerned.

14.3. Written notice given in a correctly addressed envelope, delivered by hand to a responsible

person during ordinary business hours shall be deemed to have been received on the day of

delivery.

15. Severability of clauses

15.1. If any provision or clause of the written agreement or of the terms and conditions becomes

invalid or unenforceable, such provision or clause shall be divisible and be regarded as pro

non-scripto and the remainder of the written agreement and the standard terms and

conditions shall remain in force and binding.

16. Dispute resolution

16.1. The parties accept that disputes may arise between the parties during the course of this

agreement.

17.1 Any dispute that arise, shall be referred to a joint committee of a director of the client and a

director/partner of Deloitte, or alternates appointed by them, who will use their best

endeavours to resolve the dispute within 7 (seven) days of the dispute having been referred

to them.

17.2 Should the joint committee be unable to resolve a dispute, such dispute will be submitted to

and decided by arbitration in terms of clause 18.

17. Arbitration

17.1. Subject to the provisions of clause 16, any dispute which may arise at any time between the

parties relating to any matter arising out of this written agreement or the interpretation

thereof, shall be finally resolved in accordance with the Rules of the Arbitration Foundation of

Southern Africa by an arbitrator or arbitrators appointed by the Foundation.

18.1 Either party to this agreement may demand that a dispute be referred to arbitration by giving

written notice to that effect to the other party.

18.2 This clause shall not preclude either party from obtaining interim relief on an urgent basis

from a court of competent jurisdiction pending the decision of the arbitrator.

18.3 The arbitration referred to in 17 shall be held at Johannesburg in the English language; and

immediately and with a view to its being completed within 7 (seven) days after it is demanded.

18.4 The parties irrevocably agree that the decision in arbitration proceedings shall be final and

binding upon the parties; shall be carried into effect; may be made an order of any court of

competent jurisdiction.

18.5 The provisions of clauses 17 and 18 shall not preclude the parties from obtaining urgent

interim relief from any court of competent jurisdiction.

18. Force Majeure

18.1. Neither party shall be liable for any failure to fulfil its obligations under this agreement if and to

the extent such failure is caused by any circumstances beyond its reasonable control,


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including but not limited to flood, fire, earthquake, war, tempest, hurricane, industrial action,

government restrictions or acts of God. Should either party be unable to fulfil a material part

of its obligations under this agreement for a period in excess of 60 (sixty) days due to

circumstances beyond its reasonable control, as recorded in this clause, the other party may

at its sole discretion cancel this agreement forthwith.

19. Waiver

19.1. No waiver of any of the terms and conditions of this Agreement will be binding or effectual for

any purpose unless expressed in writing and signed by the party hereto giving the same, and

any such waiver will be effective only in the specific instance and for the purpose given. No

failure or delay on the part of either party hereto in exercising any right, power or privilege

hereunder will operate as a waiver thereof, nor will any single or partial exercise of any right,

power or privilege preclude any other or further exercise thereof or the exercise of any other

right, power or privilege.

20. Cession

20.1. No party shall cede any of its rights or delegate any of its obligations under this agreement,

without the prior written consent of the other party, which shall not unreasonably be withheld.

21. Governing law

21.1. This Agreement will be governed by and construed in accordance with the law of the Republic

of South Africa and all disputes, actions and other matters relating thereto will be determined

in accordance with such law.

22. Jurisdiction

22.1. Subject to clauses 17 and 18, the parties consent and submit to the jurisdiction of such High

Court of South Africa, or division thereof, which has its seat in Johannesburg, in any dispute

arising from or in connection with this Agreement.

23. Ongoing rights

23.1. Notwithstanding termination of this Agreement, any clause, which from the context,

contemplates ongoing rights and obligations of the parties, shall survive such termination and

continue to be of full force and effect.

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