The information below constitutes the report of the Audit Committee in respect of the year under review, as required by section 270A of the Corporate Laws Amendment Act.
The Audit Committee is constituted as a statutory committee and has an independent role with accountability to both the board and shareholders. The board has reviewed and amended membership of the committee to reflect current legislation and recommendations by King III, which dictates that all members of the committee be independent non-executive directors. The board elects the Chairman of the Audit Committee. The committee was chaired by independent non-executive director John Barton, and further comprises two independent non-executive directors.
The board has assessed the experience and qualification of the committee members upon their appointment and has confirmed that they are sufficiently qualified and experienced in matters such as financial and sustainability reporting, internal financial controls, external and internal audit processes, corporate law, risk management, financial sustainability issues, IT governance as it relates to integrated reporting and governance processes within the group. The board has satisfied itself that all members of the committee act independently in compliance with the Corporate Laws Amendment Act. The committee members are recommended to the board for approval on an annual basis.The committee meets at least four times annually, but more often if necessary, and during the year met four times. Attendance at meetings is set out in the table on page 41.
The committee has unrestricted access to the external and internal auditors. The Group Company Secretary is the secretary of the committee. The Chairman of the committee represents the Audit Committee at the annual general meeting each year. The committee’s terms of reference tasks the committee with overseeing all factors and risks that may impact on the integrity of the annual report.
Interim and annual results are reviewed to ensure that the financial results are valid, accurate and fairly represent the group’s performance. The committee assists the board with all financial reporting and reviews the annual financial statements as well as the preliminary announcements and interim financial information. It further provides the board with its views on a quarterly assessment of the going concern status of the group and regularly reviews the appropriateness of the capital structure.
The committee also assesses internal controls governing accounting, auditing and financial reporting. The committee has the responsibility to review and monitor the structure, performance and activities of the Internal Audit Department, the external auditors and the adoption of internal control procedures including accounting policies, legislative compliance, regulatory matters and governance. The committee is responsible for recommending the appointment of the external auditors. It is tasked with the responsibility of nominating the external auditors for appointment, approving the terms of engagement and remuneration for the external audit engagement and monitoring and reporting on the independence of the external auditors in the annual financial statements. It also sets the criteria for recommending the engagement of the external auditors for non-audit purposes. It approves the internal audit plan and oversees the external audit process.
The committee has representation on the Risk and Sustainability Committee, ensuring that key risks facing the group are brought to the attention of the Audit Committee. The committee specifically oversees financial reporting risks, internal financial controls and fraud and IT risks as they relate to financial reporting.
No independent assessment was made of the risk management process and consideration will be given to it being undertaken by the Internal Audit Department during the forthcoming year.
The Audit Committee has the additional responsibility of advising and updating the board on issues ranging from accounting standards to published financial information. The group’s whistle-blowing arrangements are approved and monitored by the committee. Findings by the external auditors arising from their annual statutory audit are tabled and presented at an Audit Committee meeting following the audit. The committee endorses action plans for management to mitigate noted concerns. The committee has access to the company’s records, facilities, employees and any other resources necessary to discharge its responsibilities effectively.
The committee has considered and is satisfied with the expertise and experience of the Group Finance Director. Further, the committee has considered and is satisfied with the independence of the external auditors and with the effectiveness of the group’s internal audit function.
The Audit Committee recommended the annual financial statements for approval to the board.
The Audit Committee was responsible for oversight of risk management in the group until the Risk and Sustainability Committee was established in July 2010.