Audit committee report

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The audit committee has pleasure in submitting its report to stakeholders for the financial year ended 30 September 2013.

The audit committee is an independent statutory committee appointed by the shareholders. The board delegates duties and responsibilities to the audit committee according to terms of reference, which are formalised in a charter. The charter is recommended by the audit committee and approved by the board on an annual basis.

During the year under review, the audit committee conducted its affairs in accordance with its charter, and assisted the board in discharging its responsibilities as required by the Companies Act 71 of 2008 and the King Code of Governance Principles for South Africa, 2009 (King III).
 

COMPOSITION AND MEETINGS

Members: R van Rooyen (Chairman), YZ Cuba1, SD Jagoe, LM Mojela2, TS Munday3, KW Mzondeki4.

The audit committee comprises of at least four independent non-executive directors and meets at least three times a year. The chief executive, chief financial officer, external auditors, internal auditors and financial executives attend committee meetings by request.
 
1 YZ Cuba resigned on 17 May 2013.
2 LM Mojela appointed on 1 April 2013.
3 TS Munday appointed on 7 December 2012.
4 KW Mzondeki resigned on 19 November 2012.
 
Attendance register Appointed to Committee 13 November
2012
8 May
2013
1 October
2013
R van Rooyen 17 Nov 2009
YZ Cuba 1 Jan 2011
SD Jagoe 14 Nov 2000
LM Mojela 1 April 2013
TS Munday 7 Dec 2012
KW Mzondeki 17 Nov 2009
 

STATUTORY DUTIES

In execution of its statutory duties during the past financial year and pursuant to the provisions of the JSE Listings Requirements, the audit committee:
Confirmed the appointment of both Deloitte & Touche (Deloitte) as the independent external auditors and Mr Patrick Smit as the designated audit partner.
Confirmed that Deloitte and the designated audit partner are accredited by the JSE.
Approved the Deloitte engagement letter, the audit plan and the budgeted audit fees payable to Deloitte.
Obtained a statement from Deloitte confirming that its independence was not impaired.
Pre-approved the non-audit services provided by Deloitte in terms of an approved policy.
Satisfied itself of the appropriateness of the expertise and experience of the chief financial officer and the expertise resources and experience of the finance function.
Recommended to the board, which in turn has recommended to the shareholders for consideration at the next annual general meeting, the appointment of Deloitte as external auditors for the financial year ending 30 September 2014.
 

ROLES AND RESPONSIBILITIES

The committee has performed its duties and responsibilities during the financial year according to its terms of reference as follows:

INTERIM AND ANNUAL FINANCIAL STATEMENTS:

Confirmed that the interim and annual financial statements were prepared on the going concern basis.
Reviewed the interim and annual financial statements and other financial information made public, prior to the approval of the board and satisfied itself that they fairly present the results of operations, cash flows and the financial position of Reunert Limited.
Considered accounting treatments, significant or unusual transactions and accounting judgements.
Considered the appropriateness of accounting policies and any changes made thereto.
Reviewed the Deloitte audit report.
Reviewed any significant legal and tax matters and considered any concerns identified that could have a material impact on the financial statements.
Reviewed the solvency and liquidity tests undertaken for specific transactions and dividend declarations.
Considered and made recommendations to the board on the interim and final dividends paid to shareholders.
Met separately with management, Deloitte and internal audit.
 

EFFECTIVENESS OF EXTERNAL AUDIT FUNCTION:

Reviewed and evaluated the external audit process and concluded it to be satisfactory.
Considered whether any reporting irregularities were identified and reported by Deloitte in terms of the Auditing Profession Act, 2005, and determined there were none.
Reviewed the Deloitte report and obtained assurances that adequate accounting records are being maintained.
Reviewed the findings and recommendations of Deloitte and confirmed that no unresolved issues of concern exist between the group and Deloitte.
 

INTERNAL CONTROL AND INTERNAL AUDIT

Reviewed and approved the annual internal audit plan and evaluated the independence, effectiveness and performance of the internal audit function.
Considered the reports of the internal auditors on the group’s systems of internal control including financial controls, financial risk management and maintenance of effective internal control systems.
Reviewed issues raised by internal audit and the adequacy of corrective action taken by management in response thereto.
Assessed the adequacy of the performance of the internal audit function and found it satisfactory and concluded that there were no material breakdowns in internal control.
 

FINANCIAL RISK MANAGEMENT AND INFORMATION TECHNOLOGY:

Reviewed financial and information technology risks, including fraud risks as they relate to financial reporting and found them to be adequate.
Received assurance that the systems of internal control over information technology are adequate and effective.
Received written assessments of the effectiveness of the group’s system of internal controls and financial risk management from internal audit.
 

LEGAL AND REGULATORY COMPLIANCE:

Reviewed legal matters that could have a material impact on the group.
Considered reports provided by management, internal audit and Deloitte regarding compliance with legal and regulatory requirements.
Monitored complaints received through the group’s independent, confidential whistle-blowing service.
 

SUSTAINABILITY INFORMATION:

Monitored the process of sustainability reporting.
Received the necessary assurance that material disclosures are reliable and do not conflict with the financial information.
 

CONCLUSION

The committee is satisfied that it has complied with all its statutory and other responsibilities and having had regard to all material risks and factors that may impact on the integrity of the integrated annual report and the annual financial statements following review, the audit committee recommends the integrated annual report and the annual financial statements of Reunert for the year ending 30 September 2013 for the approval to the board.
 
 
Rynhardt van Rooyen
Chairman

Sandton

20 November 2013