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59
BLUE LABEL INTEGRATED ANNUAL REPORT 2016
Audit, Risk and Compliance Committee report
continued
•
considered the Committee’s report
describing how duties have been
discharged; and
•
submitted matters to the Board
concerning the Company’s
accounting policies, financial
controls, records and reporting, as
appropriate.
Other duties discharged
Financial statements and reporting
The Committee:
•
monitored compliance with
accounting standards and legal
requirements and ensured that all
regulatory compliance matters had
been considered in the preparation
of the financial statements;
•
reviewed the external auditor’s
report to the Committee and
management’s responses thereto
and made appropriate
recommendations to the Board of
Directors regarding actions to be
taken;
•
reviewed and commented on the
annual financial statements, interim
reports, paid advertisements,
announcements and the accounting
policies and recommended these to
the Board for approval;
•
reviewed and recommended to the
Board for adoption the consolidated
budget for the ensuing financial
year; and
•
considered the going concern status
of the Company and Group on the
basis of review of the annual
financial statements and the
information available to the
Committee and recommended such
going concern status for adoption
by the Board. The Board statement
on the going concern status of the
Group and Company is contained
on page 75 of the Directors’ report.
External audit and non-audit
services
The ARCC has satisfied itself as to the
independence of the external auditor,
PwC, as set out in section 94(7) of the
Act, which includes consideration of
compliance with criteria relating to
independence or conflicts of interest
as prescribed by the Independent
Regulatory Board for Auditors.
Requisite assurance was sought from
and provided by PwC that internal
governance processes within the firm
support and demonstrate its claim to
independence.
To assess the effectiveness of the
external auditors, the Committee
considered PwC’s fulfilment of the
agreed audit plan and variations from
the plan, and the robustness and
perceptiveness of PwC in its handling
of key accounting treatments and
disclosures.
The Committee, in consultation with
Executive Management, agreed to the
engagement letter, terms, audit plan
and budgeted audit fees for the 2016
financial year.
Any non-audit services to be provided
by the external auditors are governed
by a formal written policy which
incorporates a monetary delegation of
authority in terms of non-audit
services to be provided. The non-audit
services rendered by the external
auditors during the year ended
31 May 2016 comprised tax advisory
services, tax compliance services and
general advisory services. The fees
applicable to the aforementioned
services totalled R11.7 million (2015:
R0.5 million), of which R2.4 million
relate to non-audit services and the
remainder to acquisition-related costs.
The ARCC has nominated, for
approval at the Annual General
Meeting, the reappointment of PwC
as registered auditors for the 2016
financial year. The Committee also
satisfied itself that PwC is accredited
and appears on the JSE List of
Accredited Auditors as contemplated
in paragraph 3.86 of the JSE Listings
Requirements.
Internal audit and internal controls
The Committee:
•
reviewed the co-operation and
co-ordination between the internal
and external audit functions in
order to avoid duplication of work.
This will be further formalised
through a combined assurance
facilitation;
•
examined and reviewed the
progress made by internal audit
against the approved 2015/16 audit
plan;
•
approved the internal audit plan for
the 2016/17 financial year;
•
considered the effectiveness of
internal audit;
•
considered internal audit findings
and corrective actions taken in
response to such findings; and
•
reviewed the effectiveness of the
systems of internal control,
including internal financial control
and risk management.
Risk management and compliance
The Committee:
•
reviewed the integrity of the risk
control systems and ensured that
the risk policies and strategies of
the Company are effectively
managed;
•
made recommendations to the
Board concerning the levels of
tolerance and risk appetite;