Audit committee report to shareholders
| 1. |
Introduction |
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The audit committee comprises the following independent non-executive directors:
- ZBM Bassa (Chairman);
- AJ Morgan;
- DD Mokgatle; and
- ND Moyo.*
* Resigned on 12 January 2010
In addition to the committee members above, the
chief executive officer and chief financial officer
attend meetings of the committee. |
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| 2. |
Background |
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The committee is pleased to present its report for
the financial year ended 31 December 2009 as
recommended by the King II report on Corporate
Governance and in line with the Companies Act
61 of 1973, as amended (the Act). |
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| 3. |
Companies Act 61 of 1973 (the Act) and King III compliance |
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The committee commenced the review of its terms
of reference and workplan in order to comply
with the relevant provisions of the Act and King III
recommendations with respect to audit committees.
The review process involved the following:
- A half day training session on the new
provisions offered by the Institute of Directors;
- A gap analysis was conducted, and
recommendations made by the company
secretary, internal and external auditors.
Of particular importance was the review of
Kumba’s combined assurance model and IT
governance framework.
- Amended terms of reference and workplan
were approved by the committee and the
board in February 2010.
The 2010 audit committee report will report fully
on its compliance with the provisions of the Act
and King III. |
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| 4. |
Duties carried out in 2009 |
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During the financial year ended 31 December
2009 the audit committee carried out its duties
as set out in the King II Report, the Act, and the
committee’s terms of reference and in accordance
with its annual plan. As an overview only, and not
to be seen as an exhaustive list, the committee:
- Reviewed the group financial statements
and declaration of compliance with statutory
requirements;
- Reviewed the appropriateness of the group’s
dividend policy and made recommendations
to the board;
- Reviewed the interim reports, results announcements, dividend recommendations and release of price sensitive information;
- Reviewed the going concern assessments by management and made recommendations to the board;
- Reviewed quality and effectiveness of internal audit process;
- Reviewed the external auditor’s management
letters and management responses;
- Reviewed significant judgements and
unadjusted differences resulting from the
audit, as well as any reporting decisions made;
- Monitored compliance with accounting standards and legal requirements;
- Reviewed and were satisfied that the
external auditors and engagement partner
were independent;
- Nominated the reappointment of the external auditors and engagement partner;
- Ensured that the appointments of the external auditors complied with all relevant legislation;
- Determined the fees to be paid to the
external auditors and ensured that they were
fair and equitable;
- Maintained a non-audit services policy;
- Reviewed and were satisfied with the process
of risk management and monitoring of legal
governance compliance within the company
and ensured that the combined assurance
model addressed the significant risks within
the company including:
– Financial risks;
– Internal financial controls; and
– Fraud risks; and
- Oversaw the effectiveness of the internal audit function.
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| 5. |
Annual financial statements |
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The audit committee has evaluated the
consolidated annual financial statements for the
year ended 31 December 2009 and concluded
that it complies, in all material aspects, with
the requirements of the Act and International
Financial Reporting Standards. The committee
has therefore recommended the approval of the
annual financial statements to the board.
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| 6. |
Conclusion |
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Given the above, the committee is of the opinion that it has appropriately addressed its key responsibilities in respect of:
- Internal control;
- Financial accounting control; and
- Stakeholder reporting.
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| ZBM Bassa |
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