AFRICAN DAWN ANNUAL REPORT 2019 Audit and Risk Committee Report Annual Financial Statements For the year ended 28 February 2019 continued 25 Ms. V Lessing Mr. SM Roper CA(SA) The Committee meetings were attended by invitees throughout the period. All the directors were invited to attend the meetings. The Financial Director was required to attend. The Committee is satisfied that the members thereof have the required knowledge and experience as set out in Section 94(5) of the Companies Act and Regulation 42 of the Companies Regulation, 2011. 2. Meetings held by the Audit and Risk Committee The Audit and Risk Committee performs the duties laid upon it by Section 94(7) of the Companies Act by holding meetings with the key role players on a regular basis and by the unrestricted access granted to the external auditors. Afdawn held six Audit and Risk Committee meetings during the period. The attendance of the meetings is set out below: Member / Invitee 5/04/2018 22/05/2018 7/06/2018 4/02/2019 26/02/2019 Ms. HH Hickey (Chairperson) Yes Yes Yes Yes Yes Mr. SM Roper Yes Yes Yes Yes Yes Ms. V Lessing No Yes No Yes No 3. External auditor As the partners of the previous auditors moved to another firm and the firm itself was sold it was noted that there was a conflict of interest with the previous auditors. The Committee therefore went through a process to appoint new auditors. The Committee nominated Mazars for appointment as external auditors of Afdawn. The Committee satisfied itself that the external auditor is independent of Afdawn, as set out in section 94(8) of the Companies Act, and suitable for re-appointment by considering, inter alia, the information stated in paragraph 22.15(h) of the JSE Listings Requirements. This included review of the following: • The Committee confirmed the Confirmation of the JSE accreditation of the firm. • Reviewed the latest (2016) IRBA firm inspection outcome and file inspection outcome. • Considered the review summary of internal processes for the firm. • Considered the legal and disciplinary procedures from 2015 against any partners and noted that a partner had be removed from the JSE accreditation list and a number of fines and a settlement by consent order were settled. • Suitability of the designated auditor documentation was reviewed. The Committee confirmed that the appointment of the auditors is appropriate. As the auditors are new there is no need for partner rotation and the tenure of the auditors only starts with their current appointment. The new audit partner and, the designated auditor, Jaco Cronje, and the firm are independent as defined by the Companies Act and as per the standards stipulated by the auditing profession. The Audit and Risk Committee in consultation with executive management, agreed to the terms of the engagement. The audit fee for the external audit has been considered and approved for the 2019 financial year end, taking into consideration such factors as the timing of the audit, the extent of the work required and the scope. The Committee approved a non-audit services policy which determines the nature and extent of any non-audit services which Mazars may provide to the Company. The policy allows for limited tax and corporate governance advice. 4. Financial statements The Committee has evaluated the Group financial statements for the year ended 28 February 2019 and, based on the information provided, the Committee considers that the Group complies in all material respects, with the requirements of the Companies Act, International Financial Reporting Standards (IFRS) and the JSE Listing Requirements. The requirements of King IV™ are continuously being assessed and improved on with significant issues resolved. The Group substantially complies with the requirements of King IV™ except in respect of those principals highlighted in the corporate governance report. The King IV™ requirements will be reviewed once again in the coming year with the view of improving compliance on an ongoing basis. 5. Accounting practices and internal control Based on the available and communicated information, together with discussions with the independent external auditor, the Committee is satisfied that there was no material breakdown in the internal accounting controls during the financial year under review. The Committee reviewed the auditor’s management letter and can report that there were no material issues requiring immediate additional attention. The value-added issues raised are receiving the appropriate attention to ensure increased effectiveness in all areas of financial and business systems and controls.
AFDAWN AR FINAL 2019
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