Report of the Board Audit Committee

Report of the Board Audit Committee in terms of Regulations 27(1)(10)(b) and (c) of the Public Finance Management Act of 1999 (as amended) and requirements of King III Code of Governance

In the execution of its duties during the past financial year, the Board Audit Committee has:
  • Reviewed the procedures for identifying business risks and managing their impact on the Corporation, including the risk management functions;
  • Reviewed the Corporation’s policies and procedures for detecting and preventing fraud;
  • Reviewed the effectiveness of the Corporation’s policies, systems and procedures;
  • Reviewed the effectiveness and adequacy of the Internal Audit Department and adequacy of its annual work plan;
  • Considered whether the independence, objectives, organisation, staffing plans, financial budgets, audit plans and standing of the Internal Audit function provide adequate support to enable the committee to meet its objectives;
  • Reviewed the results of the work performed by the Internal Audit function in relation to financial reporting, corporate governance, risk areas, internal control and any significant investigation and management response;
  • Reviewed the co-ordination between the Internal Audit function and the external auditors and dealt with any issues of material or significant dispute or concern;
  • Reviewed the Corporation’s compliance with significant legal and regulatory provisions;
  • Reviewed such significant transactions as the committee deemed appropriate;
  • Reviewed such significant reported cases of employee conflicts of interest, misconduct or fraud, or any other unethical activity by employees or the Corporation;
  • Reviewed the controls over significant financial and operational risks;
  • Reviewed any other relevant matters referred to it by the Board;
  • Reviewed the adequacy, reliability and accuracy of financial information provided by management and other users of such information;
  • Reviewed the accounting and auditing concerns identified by internal and external auditors;
  • Reviewed the integrated report and financial statements taken as a whole to ensure they present a balanced and understandable assessment of the position, performance and prospects of the Corporation;
  • Reviewed the external auditors’ findings and reports submitted to management; and
  • Reviewed the independence and objectivity of the external auditors.
In terms of King III requirements, the Audit Committee must either apply the following principles or explain non-application thereof:
  • Overseeing integrated reporting;
  • Ensuring that a combined assurance model is applied to provide a co-ordinated approach to all assurance activities;
  • Satisfying itself of the expertise, resources and experience of the company’s finance function;
  • Being responsible for overseeing of Internal Audit;
  • Being an integral component of the risk management process;
  • Being responsible for recommending the appointment of the external auditor and overseeing the external audit process; and
  • Reporting to the Board and shareholders on how it has discharged its duties.

The Board Audit Committee has complied with all the King III principles, with the inclusion of Integrated Reporting, evidenced by the Corporation’s second issue of its Integrated Report 2013.

The Board Audit Committee has made an assessment of the effectiveness of the control environment through application of the “Combined Assurance” concept. This included engagements with different assurance providers (e.g. Internal Audit, External Auditors, Corporate Secretariat, etc.) in order to formulate a holistic opinion in this regard.

Where weaknesses were identified in internal controls, corrective actions were taken to eliminate or reduce risks. The Board Audit Committee is of the opinion, based on the information and explanations given by management and the Internal Audit Department and discussions with the independent External Auditors on the results of their audits, that the internal controls of the Corporation have operated effectively throughout the year under review and, where internal controls did not operate effectively, that compensating controls have ensured that the Corporation’s assets have been safeguarded, proper accounting records maintained and resources utilised efficiently.

Following our review of the financial statements for the year ended 31 March 2013, we are of the opinion that they comply with the relevant provisions of the Public Finance Management Act 1999, as amended, and International Financial Reporting Standards, and that they fairly present the results of the operations, cash flow and financial position of the Corporation.

The Board Audit Committee concurs that the adoption of the going-concern premise in the preparation of the financial statements is appropriate. We therefore recommend that the financial statements as submitted be approved.

We hereby recommend the integrated report to the Board for approval.

On behalf of the Board Audit Committee:

LR Pitot
Chairman of the Board Audit Committee

19 June 2013

Coega Dairy Holdings

The IDC has identified increased competition in the dairy value chain and import substitution in the cheese industry as key sector development goals. We also singled out the need for increased farmer (and specifically B-BBEE) participation in dairy value-adding initiatives.

Windtown Lagoon Resort 

The newly built Windtown Lagoon Resort and Spa reflects the IDC’s focus to funding community-based projects that have potential to create employment opportunities in far-flung regions.


APPROVALS
R13.1 billion
DISBURSEMENTS
R16.0 billion
JOBS FACILITATED
18 922
JOBS SAVED
3 950
© The IDC 2013. All rights not expressly allowed are reserved. P.O. Box 784055, Sandton, 2146, South Africa