NBC board chairperson Lazarus Jacobs has questioned the release of auditor general Junias Kandjeke’s report, in which Kandjeke raised concerns that the state broadcaster accumulated losses of N$1.6 billion.
“It is therefore highly unprofessional on the part of the Auditor General to have released this report without having presented it to the Board of Directors. Above all, it is sad to note that the same report has not reached Parliament yet to be tabled by the ministry of finance while it is already in the public domain,” Jacobs lashed out.
“The fact that BDO was contracted as a professional External Auditor also calls into question BDO’s own independence and objectivity in dealing with and submitting a final report with their own opinion by allowing the same report to be changed arbitrarily by the Auditor General without BDO questioning such a move,”je added.
The state broadcaster’s chairperson also claimed the figures are inaccurate.
According to hims, the report had not been officially shared with the board or management, which, he argued, would have led to a better understanding of the implications.
In Kandjeke’s latest audit report on NBC’s books, he found that the company’s total liabilities exceed its assets by N$159 million.
The auditor general said that the board has performed a formal review of NBC’s results and its ability to continue trading as a going concern in the foreseeable future.
“The directors confirm that they are satisfied that NBC could have adequate resources if the government guarantees adequate subsidy to continue in business for the foreseeable future,” Kandjekesaid.
Hence he said, it is the view of the directors that ongoing government funding support will be provided to the national broadcaster to fulfil its mandate.
The national broadcaster received a budget allocation of over N$212 million for the 2020 financial year for operational expenditure. This amount was less than about N$267 million received in 2019.
NBC is 100% owned by the government and does not hold any other form of share.
On capital risk management, the auditor general said there are no changes expected in NBC’s approach to capital management during the period under review as it is not subject to any externally imposed capital requirements.
“The NBC’s objectives when managing capital are to safeguard the NBC’s ability to continue as a going concern to provide returns for the shareholder, benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital,” according to the audit report.
He also noted that there has been no changes to what the entity manages as capital, the strategy for capital maintenance, or externally imposed capital requirements from the previous year.
The report showed that NBC is exposed to market, credit and liquidity risks.
On market risk, Kandjeke said it is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices.
He said that the credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss.
“NBC is exposed to credit risk from its operating activities (primarily trade receivables) and its financing activities, including deposits with banks and financial institutions, foreign exchange transactions, and other financial instruments,” he said.
Kandjeke added that liquidity risk pertains to the likelihood of NBC failing to meet its obligations when they fall due.
“At the year-end, NBC reflected net current liabilities of N$377 160 503 and in 2019 stood at N$ 258 679 744.”
In addition, NBC had unused short-term borrowing facilities with local financial institutions amounting to N$11.6 million for the period under review.
However, he adds that the entity’s exposure to the risk of changes in foreign exchange rates relates primarily to some purchases of goods and services from outside Namibia.
“NBC does not hedge against foreign exchange fluctuations,” he said.