report of the audit and risk committee

The audit and risk committee has pleasure in submitting this report, as required by sections 269A and 270A of the Companies Act, Act 61 of 1973, as amended (the “Act”).

FUNCTIONS OF THE AUDIT AND RISK COMMITTEE

The audit and risk committee has adopted formal terms of reference, delegated to it by the board of directors, as its audit and risk committee charter. The audit and risk committee has discharged the functions in terms of its charter and ascribed to it in terms of the Act as follows:

• Reviewed the interim, preliminary and abridged results and the year-end financial statements, culminating in a recommendation to the board to adopt it. In the course of its review the committee:
  • takes appropriate steps to ensure that the financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and in the manner required by the Companies Act of South Africa;
  • considers and, when appropriate, makes recommendations on internal financial controls;
  • deals with concerns or complaints relating to the following:
    accounting policies;
    internal audit;
    the auditing or content of annual financial statements; and internal financial controls.
• Reviewed the external audit reports on the annual financial statements;
• Confirmed the internal audit charter and audit plan;
• Ensured that risk management procedures are adequate
• Reviewed the internal audit and risk management reports, and where relevant, recommendations being made to the board;
• Evaluated the effectiveness of risk management, controls and the governance processes;
• Verified the independence of the external auditors, nominated PricewaterhouseCoopers Inc. as the auditors for 2009 and noted the appointment of Mr Hugo Zeelie as the designated auditor;
• Approved the audit fees and engagement terms of the external auditors;
• Determined the nature and extent of allowable non-audit services and approved the contract terms for the provision of non-audit services by the external auditors.

MEMBERS OF THE AUDIT AND RISK COMMITTEE AND ATTENDANCE AT MEETINGS

The audit and risk committee consists of the non-executive directors listed hereunder and meets at least three times per annum as per the audit and risk committee charter. All members act independently as described in section 269A of the Companies Act.

During the year under review four meetings were held:
Name of member	17 March 2009	19 May 2009	22 July 2009	25 November 2009
AH Sangqu (Chairman)	Present	Present	Present	Present
WA Agenbach	Apology*	Present	Present	Present
AE Jacobs	Present	Present	Present	Present
AC Singleton	Present	Present	Present	Present
* Apology offered in advance

INTERNAL AUDIT

The audit and risk committee fulfils an oversight role regarding the Group’s financial statements and the reporting process, including the system of internal financial control. It is responsible for ensuring that the Group’s internal audit function is independent and has the necessary resources, standing and authority within the organisation to enable it to discharge its duties. Furthermore, the audit and risk committee oversees cooperation between the internal and external auditors, and serves as a link between the board of directors and these functions.

ATTENDANCE

The internal and external auditors, in their capacity as auditors to the Group, attended and reported to all meetings of the audit and risk committee. Executive directors and relevant senior managers attended meetings on invitation.

CONFIDENTIAL MEETINGS

Audit and risk committee agendas provide for confidential meetings between the committee members and the internal and external auditors.

INDEPENDENCE OF EXTERNAL AUDITORS

During the year under review the audit and risk committee reviewed a representation by the external auditors and, after conducting its own review, confirmed the independence of the auditors.

EXPERTISE AND EXPERIENCE OF FINANCIAL DIRECTOR

As required by JSE Listings Requirement 3.84(h), the audit and risk committee has satisfied itself that the financial director has appropriate expertise and experience.

AH Sangqu
Chairman: audit and risk committee
Paarl, 26 November 2009