Report of the audit committee

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

FUNCTIONS OF THE AUDIT COMMITTEE

The audit committee has adopted formal terms of reference, delegated to it by the board of directors, as its audit committee charter.

The audit committee has discharged the functions in terms of its charter and ascribed to it in terms of the Act as follows:

	Reviewed the interim, proviional and year end financial statements, culminating in a recommendation to the board to adopt them. 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 accounting policies, internal audit, the auditing or content of annual financial statements, and internal financial controls; and
	–	reviews legal matters that could have a significant impact on the organisation’s financial statements.
		Reviewed the external audit reports on the annual financial statements;
		Approved the internal audit charter and audit plan;
		Reviewed the internal audit and risk management reports, and, where relevant, recommendations are 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 2010 and noted the
		appointment of Mr Eric Mackeown as the designated auditor;
		Approved the audit fees and engagement terms of the external auditors;
		Determined the nature and extent of allowable non-audit and approved the contract terms for the provision of non-audit services by the
		external auditors.

MEMBERS OF THE AUDIT COMMITTEE AND ATTENDANCE AT MEETINGS

The audit committee consists of Mrs DC Radley, Mr FD Butler and Mrs HH Hickey and meets at least three times per annum in accordance with the audit committee charter. All members act independently as described in section 269A of the Companies Act. Details of meetings are set out on page 48.

INTERNAL AUDIT

The audit 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 committee oversees co-operation 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 at all meetings of the audit committee. The group risk management function was also represented. Executive directors and relevant senior managers attended meetings by invitation. A table detailing attendance at meetings is included on page 48.

CONFIDENTIAL MEETINGS

The Audit committee charter provides for confidential meetings between the committee members and the external auditors.

INDEPENDENCE OF EXTERNAL AUDITORS

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

EXPERTISE AND EXPERIENCE OF FINANCE DIRECTOR

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

DC Radley
Audit committee chairperson

29 July 2010