Page 65 - Capricorn IAR 2020

• Oversee risk management, including risk appetite and IT risk, as referred by the IT committee
• Review compliance
• Engage with the external auditor
• Review non-trading losses
• Oversee the asset and liability committee (“ALCO”)
The financial director, Group head of risk, head of internal audit and the external auditor attend all BARC meetings. They have unfettered access to the BARC chairman and the board.
The committee is satisfied that it has fulfilled its responsibilities in accordance with its terms of reference for the year.
MEMBERS OF THE COMMITTEE
Chairman: Gerhard Fourie Dirk Reyneke
Goms Menetté
BOARD MEMBERS AND MANAGEMENT REPRESENTATIVES INVITEES
2020 INTEGRATED ANNUAL REPORT
Board audit, risk and compliance committee
Committee role, responsibilities and functions
The key responsibilities and duties of the committee are summarised as follows:
• Financial control, accounting systems and reporting including management accounts, external reporting (interim results and integrated report), budgets, dividends and the capital plan
• Ensure a combined assurance model is applied
• Oversee the internal audit function
• Review of the finance function and optimise liquidity
KEY FOCUS AREAS FOR THE FINANCIAL YEAR
• Key responsibilities as listed
Group-wide
• Cavmont Bank
operating losses and continued financial support
• Establishing and embedding a Group liquidity plan to manage liquidity risk
Further compliance disclosures on external and internal audit, and internal controls
External audit
The BARC approved the external auditor’s terms of engagement, scope of work and the 2020 annual audit strategy, and agreed on the applicable levels of materiality. Based on written reports submitted, the BARC reviewed the findings of their work with the external auditor and confirmed that all significant matters had been satisfactorily resolved. The BARC’s views on the quality of the external audit is that the audit was executed in compliance with generally accepted audit standards.
The IFRS 9 provisioning models were implemented in the prior year and have since reached an acceptable level of maturity. Due to the materiality of the values involved, the impairment provisions will always be a significant matter that the audit committee has to consider in relation to the annual financial statements. This was addressed by the BARC by engaging with external audit and other professional advisers in each of the three countries where the Group’s banks operate.
The BARC assessed the external auditor’s independence and concluded that the external auditor’s independence was not impaired during the reporting period and up to the date of signing the consolidated financial statements.
The BARC has approved a Non-audit Services Policy that is strictly adhered to. On a quarterly basis, management reports all payments made to the external auditor for audit and non-audit fees to the BARC. Prior BARC approval is required for assignments exceeding the
policy threshold. Non-audit services received, and fees paid by the Group during the financial year are:
Brian Black
Koos Brandt
Jaco Esterhuyse
Mihe Gaomab II
Gida Nakazibwe-Sekandi Thinus Prinsloo
Esi Schimming-Chase
Erna Solomon
Johan Swanepoel
Nico van der Merwe (executive officer: ERM) Johan van Rensburg (chief audit executive)
Technical training
Agreed-upon procedures
N$405,398
N$363,423
Other N$410,159
The external audit firm has audited the company since its incorporation in 1996. Audit firm rotation is envisaged as required by the Banking Institutions Determination on Independent Auditors (“BID-10”). The designated external audit partner was rotated
in 2017. During the external audit firm’s tenure, the finance team and all BARC members have low tenures, which mitigates the risk
of familiarity between the external auditor and management.
It is the external auditor’s responsibility to report on whether the financial statements are fairly presented in all material respects in accordance with the applicable frameworks adopted by the Group. Their audit opinion is included in the consolidated annual financial statements on page 109.
Internal audit
The Group internal audit services (“GIAS”) is an independent and objective assurance and consulting function created to improve the systems of internal control across the Group. GIAS helps the Group to achieve its objectives by systematically reviewing current processes by using a risk-based approach to establish whether the risk management process, the management control process and the governance process are adequate, effective and appropriate. The internal audit function
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