Audit committee report
Pick n Pay Stores Limited
The audit committee is pleased to present this report as required by the Companies Act of South Africa (“Companies Act”).
The audit committee is a formal committee of the Board and functions within an approved charter and complies with all relevant legislation, regulation and governance codes.
ROLE OF THE COMMITTEE
The audit committee has an independent role with accountability to both the Board and to shareholders. The committee’s responsibilities include the statutory duties prescribed by the Companies Act, activities recommended by King III and the responsibilities assigned by the Board.
The committee’s main responsibilities are as follows:
Integrated and financial reporting- Review the annual financial statements, interim report, preliminary results announcement and summarised integrated financial information and ensure compliance with International Financial Reporting Standards and the Companies Act;
- Review and approve the appropriateness of accounting policies, disclosure policies and the effectiveness of internal financial controls;
- Perform a review of the Group’s integrated reporting function and progress and consider factors and risks that could impact on the integrity of the Integrated Annual Report;
- Review the sustainability disclosure in the Integrated Annual Report and ensure that it is consistent with financial information reported; and
- Recommend the Integrated Annual Report to the Board for approval.
- Consider the expertise and experience of the Chief Finance Officer; and
- Consider the expertise, experience and resources of the Group’s finance function.
- Review and approve the internal audit charter and audit plans;
- Evaluate the independence, effectiveness and performance of the internal audit function and compliance with its mandate;
- Review the Group’s systems of internal control, including financial controls, ensuring that management is adhering to and continually improving these controls;
- Review significant issues raised by the internal audit process; and
- Review policies and procedures for preventing and detecting fraud.
- Act as a liaison between the external auditors and the Board;
- Nominate the external auditor for appointment by shareholders;
- Determine annually the scope of audit and non-audit services which the external auditors may provide to the Group;
- Approve the remuneration of the external auditors and assess their performance; and
- Assess annually the independence of the external auditors.
- Ensure that management’s processes and procedures are adequate to identify, assess, manage and monitor enterprise-wide risks; and
- Review tax and technology risks, in particular how they are managed.
- Receive and deal appropriately with any complaint relating to the accounting practices and internal audit of the Group or to the content or auditing of its financial statements, or to any related matter; and
- Perform other functions as determined by the Board.
COMPOSITION OF THE COMMITTEE
This committee is chaired by and comprises only independent non-executive directors. In accordance with the requirements of the Companies Act, members of the committee are appointed annually by the Board for the ensuing financial year and in compliance with King III are appointed by shareholders at the annual general meeting.
The committee has a charter which is reviewed and approved by the Board annually.
The composition of the committee and meeting attendance is as follows:
 |
Committee member |
Qualification |
Date appointed |
14 April |
17 October |
 |
 |
|
|
|
|
|
|
Jeff van Rooyen (Chairman) |
CA(SA) |
June 2007 |
P |
P |
||
Hugh Herman |
Attorney |
June 2011 |
— |
P |
||
Alex Mathole |
Attorney |
November 2010 |
P |
P |
||
Richard van Rensburg* |
CA(SA) |
June 2010 |
P |
— |
||
 |
Ben van der Ross |
Attorney |
June 2003 |
P |
P |
 |
*On appointment as executive deputy CEO on 1 October 2011, Richard van Rensburg resigned as a member of the audit committee.
P = Present
- Meeting at least twice a year to review the Group’s financial results, to receive and review reports from both the internal and external auditors, and to meet with management to review their progress on identifying and addressing key risk areas within the business;
- Reporting to the Board at the next meeting, which is always held within a week of the respective committee meeting;
- Meeting separately with the internal and external auditors to confirm they are receiving the full co-operation of management; and
- The committee Chairman meets regularly with key executives to keep abreast of emerging issues.
The committee discharges all audit committee responsibilities of all the subsidiary companies within the Group. To help it discharge this responsibility, financial review committees, chaired by the CFO, review in detail the results of all material operating subsidiary companies with the external auditors and management of the respective subsidiary. These review committees report their findings to the Group audit committee.
The external and internal auditors have unrestricted access to the committee and all of its members throughout the year.
INDEPENDENCE OF EXTERNAL AUDITORS
The audit committee is satisfied as to the independence of the Group’s external auditors, KPMG Inc. and its respective audit partners. The committee nominates KPMG as external auditor for the appointment by shareholders at the annual general meeting.
EXPERTISE AND EXPERIENCE OF CHIEF FINANCE OFFICER AND FINANCE FUNCTION
The audit committee is satisfied that Mr Bakar Jakoet, has the appropriate expertise and experience for his position of Chief Finance Officer of the Group. In addition, the committee is also satisfied that the composition, experience and skills of the finance function have met the Group’s requirements.
APPROVAL OF THE AUDIT COMMITTEE REPORT
The committee confirms that it has functioned in accordance with its charter for the 2012 financial year and that its report to shareholders has been approved by the Board.
 |
Jeff van Rooyen
Chairman: Audit committee
10 May 2012
