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Corporate governance

Pick n Pay Stores Limited

Audit committee report

The audit committee is pleased to present this report as required by the Companies Act, 2008. 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 2008, 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, summarised annual financial statements and the Integrated Annual Report, and ensure compliance with International Financial Reporting Standards and the Companies Act 2008.
• 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 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.
• Recommend the approval of the Integrated Annual Report to the Board.

Finance function

• Consider the expertise and experience of the Chief Finance Officer.
• Consider the expertise, experience and resources of the Group’s finance function.

Internal audit

• 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.
• Review policies and procedures for preventing and detecting fraud.

External audit

• 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.
• Assess annually the independence of the external auditors.

Risk management

• Ensure that management’s processes and procedures are adequate to identify, assess, manage and monitor enterprise-wide risks.
• Review tax and technology risks, in particular how they are managed.

General

• 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.
• 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 2008, members of the committee are appointed annually by the Board for the ensuing financial period 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:  

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