Background

The committee is pleased to present our report for the financial year ended 31 December 2009 as recommended by the Corporate Laws Amendment Act No 24 of 2006.

The committee’s operation is guided by a formal detailed charter that is in line with the Act and is approved by the board as and when it is amended. The committee has discharged all its responsibilities as contained in the charter.

Objective and scope

• To assist the board in discharging its duties relating to safeguarding of assets, the operation of adequate systems and controls.
• The control of reporting processes and the preparation of accurate reporting of the financial statements in compliance with the applicable legal requirements and accounting standards.
• To provide a forum for discussing business risk and control issues and developing recommendations for consideration by the board.
• To oversee the activities of internal and external audit.
• To perform duties that are attributed to it by the Act, the JSE and King III.

• Received and reviewed reports from both internal and external auditors concerning the effectiveness of the internal control environment, systems and processes.
• Reviewed the reports of both internal and external auditors detailing their concerns arising out of their audits and requested appropriate responses from management.
• Made appropriate recommendations to the board of directors regarding the corrective actions to be taken as a consequence of audit findings.
• Considered the independence and objectivity of the external auditors and ensured that the scope of their additional services provided was not such that they could be seen to have impaired their independence.
• Reviewed and recommended for adoption by the board such financial information that is publicly disclosed which for the year included:
  

  –	The annual report for the year ended 31 December 2009
  –	The interim results for the six months ended 30 June 2009.

• Considered the effectiveness of internal audit, approved the one year operational strategic internal audit plan and monitored adherence of internal audit to its annual plan.

The audit/risk committee is of the opinion that the objectives of the committee were met during the year under review. Where weaknesses in specific controls had been identified, management undertook to implement appropriate corrective actions to mitigate the weakness identified.

Memberships

During the course of the year, the membership of the committee comprised solely independent non-executive directors. Details of membership to the committee can be found here.

External audit

The committee has satisfied itself through enquiry that the auditor of Basil Read Holdings Limited is independent as defined by the Act. The committee, in consultation with executive management, agreed to an audit fee for the 2009 financial year. The fee is considered appropriate for the work that could reasonably have been foreseen at that time. Audit fees are disclosed in note 9 to the financial statements.

A formal procedure that governs the process whereby the external auditor is considered for the provision of non-audit services, and each engagement letter for such work is reviewed by the committee in advance, has been incorporated during the 2010 financial year.

Meetings were held with the auditor where management was not present, and no matters of concern were raised.

The committee has reviewed the performance of the external auditors and nominated, for approval at the annual general meeting, PricewaterhouseCoopers Inc as the external auditor for the 2010 financial year, with Mr JP van Staden as the designated auditor. In terms of the rotation requirements of the Act this will be his final year as designated auditor of the company.

Financial director review

The committee has reviewed the performance, appropriateness and expertise of the chief financial officer, Mr MDG Gouveia, and confirms his suitability for appointment as financial director in terms of the JSE Listings Requirements.

Annual financial statements

The audit/risk committee has evaluated the annual report for the year ended 31 December 2009 and considers that it complies, in all material aspects, with the requirements of the Act and International Financial Reporting Standards. The committee has therefore recommended the annual financial statements as set out from here for approval to the board. The board has subsequently approved the financial statements which will be open for discussion at the forthcoming annual general meeting.

Ntombekaya September
Chairman of the audit/risk committee
11 March 2010