DIRECTORS’ RESPONSIBILITY FOR FINANCIAL REPORTING
FOR THE YEAR ENDED 31 DECEMBER 2011
DIRECTORS’ RESPONSIBILITY FOR FINANCIAL REPORTING
The directors are responsible for:
- The preparation, fair presentation and integrity of the annual
financial statements and related financial information of the Kumba
Iron Ore Limited Group (the group) as well as Kumba Iron Ore
Limited (Kumba or the company), in accordance with International
Financial Reporting Standards and the requirements of The
Companies Act and the Listings Requirements of the JSE Limited,
which include amounts based on judgments and estimates made
by management.
These annual financial statements are based on appropriate accounting policies which have been been consistently applied and which are supported by reasonable and prudent judgments and estimates, comprise the balance sheets at 31 December 2011; the income statements, the statements of comprehensive income, the statements of changes in equity and cash flow statements for the year then ended; the notes to the financial statements, which include a summary of principal accounting policies and other explanatory notes; and the directors’ report.
The directors, primarily through the Audit Committee, meet periodically with the external and internal auditors as well as the executive management to evaluate matters concerning the responsibilities below:
- Maintaining adequate accounting records and an effective system of risk management;
- Developing, implementing and maintaining a sound system of internal control relevant to the preparation and fair presentation of these financial statements, that provides reasonable but not absolute assurance against material misstatement or loss, whether owing to fraud or error;
- Selecting and applying appropriate accounting policies;
- Making accounting estimates that are reasonable in the circumstances;
- Safeguarding shareholders’ investments and the group’s assets; and
- Preparing the supplementary annexures included in these financial statements.
The group’s internal auditors independently evaluate the internal controls and co-ordinate their audit coverage with the external auditors.
The independent auditors are responsible for reporting on whether the group annual financial statements and the company annual financial statements are fairly presented in accordance with the applicable financial reporting framework. The independent auditor's report to the members of the group and Kumba is set out in the Independent auditor’s report of this report.
The external and internal auditors have unrestricted access to all records, property and personnel as well as to the Audit Committee.
The directors acknowledge that they are ultimately responsible for the process of risk management and the system of internal financial control established by the group and place a strong emphasis on maintaining a strong control environment. The directors are not aware of any material breakdown in the functioning of these controls and systems during the year under review. The directors are of the opinion, based on the information and explanations given by management, the internal auditors, the external auditors and the group’s risk, compliance and other reporting processes that the risk management processes and system of internal control provide reasonable assurance in all key material aspects that the financial records may be relied upon for the preparation of the annual financial statements.
Having considered the group’s major risks, outstanding legal, insurance and taxation issues, an assessment of the solvency and liquidity taking into account the current financial position and existing borrowing facilities as well as the group’s financial budgets with their underlying business plans, the directors consider it appropriate that the annual financial statements be prepared on the going-concern basis.
APPROVAL OF GROUP ANNUAL FINANCIAL STATEMENTS AND ANNUAL FINANCIAL STATEMENTS
The group annual financial statements and the annual financial statements of Kumba Iron Ore Limited were approved by the Kumba board of directors on 7 February 2012 and are subject to approval by the shareholders at the annual general meeting on 4 May 2012. The group and company annual financial statements are signed on the directors’ behalf by:
| AJ Morgan | CI Griffith |
| Interim chairman | Chief executive |
| 7 February 2012 |