Audit and risk committee report

Firstly, I would like to acknowledge the extraordinary social and economic environment we as a Country are experiencing as we navigate the continued impact of Covid-19 ("pandemic"). Our thoughts and prayers are with those families and colleagues who have lost their loved ones during this pandemic, and who are recovering from its devastating effects.

Secondly, it is my privilege and responsibility to provide stakeholders with a summary of activities for 2021 while considering the requirements of our mandate, King IV and other regulatory requirements.

OUR MANDATE

The Audit and Risk Committee ("Committee") is constituted as a statutory committee in respect of its duties in terms of section 94(7) of the Companies Act (71 of 2008) and has been delegated the responsibility to provide meaningful oversight of the internal and external audit, finance and Information Technology functions.

A formal Audit and Risk Committee Charter ("Charter"), approved by the Board, guides the Committee in terms of its mandate (objectives, authority and responsibilities). The Charter is reviewed annually and, if necessary, amended to meet market, regulatory and statutory requirements.

The Committee provides independent oversight of the effectiveness of the Group's assurance and compliance functions, with particular focus on combined assurance arrangements (including external audit, internal audit and the finance function) and the integrity of the annual financial statements and, to the extent delegated by the Board, other governance matters, and external reports issued by the Group.

OUR ROLE

The role of the Committee is, inter alia, to:

• review the effectiveness of the Group's systems of internal control, including internal financial control and risk management, and to ensure that effective internal control systems are maintained;
• oversee the risk management process;
• review financial statements for proper and complete disclosure of timely, reliable and consistent information and to confirm that the accounting policies used are appropriate;
• deal with concerns and complaints relating to accounting policies, internal audit, external audit or content of the IAR and internal financial controls;
• nominate the appointment of the external auditor as the registered independent auditor after satisfying itself through enquiry that the auditor is independent as defined in terms of the Companies Act;
• determine the fees to be paid to the external auditor and the terms of engagement;
• ensure that the appointment of the external auditor complies with the Companies Act, as well as the JSE Listings Requirements and any other legislation relating to the appointment of the auditor; and
• approve the scope of non-audit services which the external auditor may provide to the Group and pre-approve any non-audit services to be provided by the external auditor.

ATTENDANCE AND COMPOSITION OF THE COMMITTEE

The Committee consists of four independent non-executive directors, with three forming a quorum. The members have the necessary financial literacy, skills and experience to execute their duties effectively. The management team is regularly engaged, and the Group internal auditor and the external auditor have direct access to the Committee, including closed sessions without management, on any matters that they regard as relevant to the fulfilment of the Committee's responsibilities. At the date of this report there have been no changes in the composition of this Committee.

Non-executive directors		Attendance at meetings
Ms S M du Toit		5/5
Mr S G Pretorius		5/5
Ms N P Khoza		5/5
Mr I N Malevu		4/5

MEETINGS

The Committee met five times during the year under review. The CEO, executive directors, external audit partner, the Head of Internal Audit and the Head of Information Technology attend meetings by invitation. The Company Secretary, Ms E J Willis, attends and minutes all meetings of the Committee.

SUMMARY OF KEY FOCUS AREAS FOR YEAR ENDED 30 JUNE 2021

In the execution of our statutory duties and our Charter, we effectively discharged the following activities in the reporting period.

Covid-19: Business impact, risk assessment and response

A Covid-19 impact assurance plan was formulated to monitor and respond to the heightened risks caused by the pandemic. The elevated impact on our employees, customers, operations, and Information Technology were considered in the plan. The Committee monitored the Group's operational risk and its response thereto, underpinned by the following:

• Bespoke daily Covid-19 protocols and governance across the Group.
• Active engagement with internal and external stakeholders, such as employees, industry, and government protocols.

The Committee is satisfied that the Group's control environment remained stable and the additional control measures taken during the period mitigated the increased control risk introduced by the pandemic.

Internal audit

The internal audit function provides assurance on the adequacy of the internal control environment across the Group's significant operations. The role of internal audit is contained in the internal audit charter which is reviewed annually by the Committee.

Independence and objectivity is maintained through internal audit's appropriate organisational positioning, reporting functionally to the Committee and administratively to the CFO and provides regular reports on work done to the Committee, joining each Committee meeting as an invitee. The Committee is responsible for the appointment and removal of the Head of Internal Audit and the assessment of his performance.

The Head of Internal Audit has direct and unrestricted access to the Chairman of the Committee.

The Committee has considered the above and is satisfied with the effectiveness of the internal audit function. The Committee has also considered and is satisfied with the expertise and experience of the Head of Internal Audit.

External auditor

The Committee is satisfied that PwC is independent of the Group. The Committee was provided with the information detailed in paragraph 22.15(h) of the JSE Listings Requirements by PwC and Mr Thomas Howatt. This information was used by the Committee to assess audit quality and the suitability for appointment of both PwC and Mr Thomas Howatt.

In reaching this conclusion, the Committee considered the following:

• Criteria specified for independence by the Independent Regulatory Board for Auditors;
• A submission from PwC setting out the terms and conditions on which PwC agrees to act as independent auditor of the Group for the 2021 financial year, including the respective responsibilities of directors and auditors;
• Confirmation from PwC that they were not aware of any relationships during the year that may reasonably be thought to bear on their independence in respect of the statutory audit; and
• Representations from PwC confirming their independence and that nothing had taken place which would impair this at any time, including obtaining confirmation that no restrictions had been placed upon PwC that limited their scope or access.

The Group has a clearly defined non-audit services policy which is strictly followed, and the extent of non-audit services is minimal and is continuously monitored, with no excessive, unusual or unnecessary engagements noted.

The Committee is of the view that the Group received a high-quality external audit considering the standard of audit planning and scope of activities performed. The Committee met with PwC prior to the approval of this report to discuss key audit matters, the Group's annual financial statements, commentary thereon and general matters.

The Committee has ensured that the appointment of PwC is presented and included as a resolution at the AGM pursuant to section 61(8) of the Companies Act.

Whistle-blowing

The independent external whistle-blowing lines operated effectively for the year under review. Instances of whistle-blowing are reported to the Chairman of the Committee. At the reporting date, the Committee is satisfied that there were no material matters reported.

Financial function

In accordance with the JSE Listings Requirements, the Committee must consider the appropriateness of the expertise and experience of the CFO of the Company on an annual basis. The Committee is satisfied that Mr Brandon Wood, possesses the appropriate expertise and experience to meet his responsibilities as the Group's CFO.

The Committee confirmed that the finance function meets the King IV requirements to fulfil all financial reporting and control functions. Further, we are satisfied that the composition, experience, and skills set of the finance function are adequate to fulfil all financial, control and reporting requirements of the Group.

Internal financial controls

Based on the results of work done by the internal audit function and external auditor on the Group's system of internal financial controls, and considering feedback and information from management, the Committee is of the view that the Group's system of internal financial control was effective for the period under review and that it formed a reliable basis for the preparation of the Group financial statements.

Financial statements

The Committee reviewed the financial statements of the Company and the Group and is satisfied that they comply with International Financial Reporting Standards and that the accounting policies applied are appropriate.

The Committee has confirmed that the Company has, with consideration to all entities included in the consolidated group IFRS financial statements, established appropriate financial reporting procedures and that those procedures are operating to ensure that it has access to all financial information of the Group, to allow the Group to effectively prepare and report on the financial statements.

IT governance

The Committee periodically reviews the Group's maturity in respect of IT governance by considering reports from the Group's Head of Information Technology and assurance as provided by both the external and the internal audit function in accordance with the approved internal audit plan.

RECOMMENDATION OF THE INTEGRATED ANNUAL REPORT AND RELATED SUSTAINABILITY INFORMATION FOR APPROVAL BY THE BOARD

At its meeting held on 20 September 2021, the Committee reviewed and recommended the IAR and related sustainability information for approval by the Board of directors.

Conclusion

The Committee is satisfied that:

• it has complied with all statutory duties and duties given to it by the Board under its mandate; and
• the financial and internal controls are adequate and that no material breakdowns took place that resulted in material loss to the Group.

The Board concurred with this assessment.

I N Malevu CA(SA)

Audit and Risk Committee Chairman

23 September 2021