Audit committee report

This is the report of the audit committee (committee) of The Bidvest Group Limited appointed for the financial year ended June 30 2015 in compliance with the Companies Act and in terms of the JSE Listings Requirements.

The committee has a charter that complies with the Companies Act and King III requirements and is approved by the board of directors (board). Copies are available either from the company secretary on request, or can be downloaded from the Company website.

Membership

The shareholders appointed the committee for the 2015 financial year at the annual general meeting in November 2014 and will be requested to approve the appointment of the chairman and members to the committee for the 2016 financial year at the annual general meeting scheduled for November 23 2015.

The committee consists solely of independent non-executive directors who are all financially literate.

The current members are NG Payne (chairman), PC Baloyi, EK Diack and S Masinga. Permanent advisory services are provided to the committee by RW Graham, AD Cunningham and D Masson.

Purpose

The purpose of the committee, which in certain instances operates in conjunction with the risk committee and social and ethics committee, is to:

	assist the board in discharging its duties relating to the safeguarding of assets, the operation of adequate systems, control and reporting processes, and the preparation of accurate reporting and financial statements in compliance with the applicable legal requirements and accounting standards;
	oversee the activities of, and to ensure coordination between, the activities of internal and external audit;
	provide a forum for discussing financial, enterprise-wide, market, regulatory, safety and other risks and control issues, and to monitor controls designed to minimise these risks;
	review the Company’s annual integrated report, including the consolidated and separate financial statements, as well as its interim report and any other public reports or announcements containing financial information;
	receive and deal with any complaints concerning the accounting practices, internal audit or the content and audit of its financial statements or related matters; and
	annually review the committee’s work and charter to make recommendations to the board to ensure its effectiveness.

Duties carried out

The committee has performed its duties and responsibilities during the financial year in accordance with its charter

Financial statements

The committee:

	confirmed, based on managements’ review, that the interim and consolidated and separate financial statements were prepared on the goingconcern basis;
	examined the interim and consolidated and separate financial statements and other financial information made public, prior to their approval by the board;
	considered accounting treatments, significant or unusual transactions and accounting judgements;
	considered the appropriateness of accounting policies and any changes made thereto;
	reviewed the representation letter relating to the consolidated and separate financial statements and the ISAE 3240 reasonable assurance opinion in respect of the provisional announcement, signed by management;
	considered any problems identified as well as any legal and tax matters that could materially affect the financial statements; and
	met separately with management, external audit and internal audit and satisfied themselves that no material control weakness exists.

External audit

The committee:

	nominated Deloitte & Touche as auditors and MH Holme as the independent auditor and designated audit partner, respectively to the shareholders for appointment for the financial year ended June 30 2015, of the Group and Company, and ensured that the appointments complied with legal and regulatory requirements for the appointment of an auditor;
	approved the external audit engagement letter, the audit plan and the budgeted audit fees payable to the external auditors;
	determined the nature and extent of all non-audit services provided by the independent auditors and pre-approved all non-audit services undertaken;
	obtained assurances from the independent auditors that adequate accounting records were being maintained;
	confirmed that no reportable irregularities had been identified or reported by the independent auditors under the Auditing Profession Act; and
	nominated the external auditors and the designated audit partner for each of Bidvest’s divisions or subsidiary companies.

Independence of external auditors

The committee is satisfied that Deloitte & Touche is independent of the Group after taking the following factors into account:

	Representations made by Deloitte & Touche to the committee
	The auditors do not, except as external auditors or in rendering permitted non-audit services, receive any remuneration or other benefit from the Group
	The auditors’ independence was not impaired by any consultancy, advisory or other work undertaken
	The auditors’ independence was not prejudiced as a result of any previous appointment as auditors
	The criteria specified for independence by the Independent Regulatory Board for Auditors and international regulatory bodies.

Internal control and internal audit

The committee:

	reviewed and approved the annual internal audit plans and evaluated the independence, effectiveness and performance of the internal audit function;
	considered the reports of the internal auditors on the Group’s systems of internal control including financial controls, business risk management and maintenance of effective internal control systems;
	received assurances that proper accounting records were maintained and that the systems safeguarded the Group’s assets against unauthorised use or disposal;
	reviewed issues raised by internal audit and the adequacy of corrective action taken by management in response thereto;
	assessed the adequacy of the performance of the internal audit function and found it satisfactory; and
	concluded that there were no material breakdowns in internal control.

Risk management and legal requirements

The committee:

	reviewed the Group’s policies on risk management, including information technology risks and found them to be sound;
	reviewed with management legal matters that could have a material impact on the Group;
	reviewed the adequacy and effectiveness of the Group’s procedures to ensure compliance with legal and regulatory responsibilities; and
	considered reports provided by management, internal assurance providers and the independent auditors regarding compliance with legal and regulatory requirements.

Combined assurance

The committee reviewed the plans and reports of the external and internal auditors and other assurance providers including management, and concluded that these were adequate to address all significant financial risks facing the business.

Financial director and finance function

The committee:

	considered the appropriateness of the experience and expertise of the Group financial director and concluded that these were appropriate; and
	considered the expertise, resources and experience of the finance function and concluded that these were appropriate.

Attendance

The names of the members who were in office during the period August 29 2014 to August 28 2015 and the details of audit committee meetings attended by each of the members are:

Director	November 21 2014	February 24 2015	May 26 2015	August 24 2015	August 27 2015
NG Payne (Chairman)	^	^	^	^	^
PC Baloyi	^	A	^	^	A
EK Diack	^	^	A	^	^
S Masinga	^	A	^	^	^

^	Attended in person, by video-conference or tele-conference.
A	Apologies tendered.

Consolidated and separate financial statements

Following the review by the committee of the consolidated and separate annual financial statements of The Bidvest Group Limited for the year ended June 30 2015, the committee is of the view that, in all material respects, it complies with the relevant provisions of the Companies Act and IFRS and fairly presents the financial position at that date and the results of its operations and cash flows for the year. In conjunction with the risk committee and social and ethics committee, the committee has also satisfied itself as to the integrity of the remainder of the annual integrated report.

Having achieved its objectives for the financial year, the committee recommended the consolidated and separate financial statements and annual integrated report for the year ended June 30 2015 for approval to the board.

Signed on behalf of the committee by:

Nigel Payne
Chairman