Page 38 - Integrated Annual Report

REPORT OF THE AUDIT AND RISK COMMITTEE
Chairperson: Mr MH Ahmed
Members: Mr JG Ngcobo and Ms RD Watson
INTRODUCTION
The audit and risk committee (“committee”) has pleasure in submitting this report in respect of the past financial year of the group, as required by section 94 of the Companies Act 2008, as amended (“Act”). The responsibilities and functions carried out by the Committee during the year under review are set out in this report.
The Committee is a statutory committee constituted in terms of section 94(7) of the Act to provide oversight of the financial reporting process, the audit process, the company’s system of internal controls and compliance with laws and regulations. The Committee serves as the audit committee for Hosken Consolidated Investments Limited (“HCI or the Company”) and all wholly-subsidiaries of the company, including HCI Coal Proprietary Limited, HCI Managerial Services Proprietary Limited and the HCI’s property division. It also serves as the audit and risk committee for GRIPP Advisory Services Proprietary Limited which is 75% held by the company.
The Committee’s mandate is set out in its terms of reference and includes the following responsibilities:
• Monitoring the accuracy and integrity of the group’s financial and other reporting;
• Monitoring the effectiveness of risk management processes and internal controls;
• Reviewing the independence of the external auditor;
• Recommending the appointment of external auditors
to shareholders on an annual basis;
• Reviewing the scope, results and cost-effectiveness of
independent accounting and valuation services; and
• Reviewing the expertise and experience of the financial
director.
COMPOSITION
In terms of the Act shareholders are required to approve audit and risk committee members at the annual general meeting (“AGM”) of the company. Three independent non-executive directors of the company were approved by shareholders at the 2020 AGM to serve until the next AGM scheduled for 30 August 2021. Mr MH Ahmed, Mr JG Ngcobo and Ms RD Watson have been nominated to the committee, subject to shareholder approval at the AGM. The election of members of the Committee will take place by way of separate resolutions to be considered by shareholders. The text of these ordinary resolutions is set out in the notice of the AGM.
At least two independent non-executive directors are required to form a quorum.
The committee members possess all the required qualifications, skills and experience to ensure that the committee is suitably skilled to perform the role required by the terms of reference of the committee. The chairperson of the board is not a member of the committee.
The committee met four times during the year under review. The attendances of the committee members are presented below:
Committee member
Number of meetings
Attendance of members
MH Ahmed (current chair)**
2
2
MSI Gani (previous chair)*
2
1
JG Ngcobo
4
4
RD Watson
4
4
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INTEGRATED ANNUAL REPORT 2021
HOSKEN CONSOLIDATED INVESTMENTS LIMITED
* Resigned 7 September 2020 ** Appointed 7 September 2020
Mr Gani resigned from the HCI board of directors (“the board”) on 7 September 2020 and therefore stepped down as a member of the audit and risk Committee on the same date.
Mr MH Ahmed, an independent non-executive director, was appointed to the board and the audit and risk committee effective 7 September 2020, to fill the vacancy arising on the resignation of Mr MSI Gani. The board considered the qualifications, skills and experience of Mr MH Ahmed in making this appointment. Mr MH Ahmed was re-appointed at the AGM of the company held on the 15 October 2020.
The required Stock Exchange News Service (SENS) announcement was released on the 7 September 2020.
The financial director, the group’s risk officer and the group financial manager attend the meetings as permanent invitees, along with the external and internal auditors. Other directors and members of management attend as required.
ROLE, PURPOSE AND FUNCTION:
Combined Assurance:
The Combined Assurance Forum (incorporating internal audit, external audit, the financial director and the chief risk officer) provides assurance to the board that the risk management process is integrated into the daily business activities of the company and that the appropriate levels of assurance are obtained.