Report of the audit committee

This report is issued in compliance with section 94(7) (f ) of the Companies Act, No 71 of 2008, as amended (the Companies Act) and as recommended by King III.

The MTN Group audit committee (the committee) has adopted comprehensive terms of reference that have been approved by the board, an outline of such is detailed in the corporate governance report. The committee has conducted its work over the year and discharged its responsibilities in accordance with these terms of reference. The committee presents below its report in terms of section 94 (7)(f ) of the Companies Act for the financial year ended 31 December 2011.

Membership

During the period under review, the members of the committee were formally nominated by the board for re-election to the committee, subject to the approval of the shareholders. At the annual general meeting scheduled for 29 May 2012, shareholders will be asked to approve the appointments.

The composition of the committee is set out on page 50 and the biographical details of members are set out on page 16. The members’ fees are included in the table of directors’ emoluments and related payments on page 218.

Executive directors attend committee meetings as permanent invitees. Both internal and external auditors attend all committee meetings. A summary of the meetings held during the year under review as well as attendance thereof by committee members is set out on page 54.

Execution of functions of the audit committee

The committee is satisfied that, in respect of the financial year under review, it has discharged its duties and responsibilities in accordance with its terms of reference as they relate to the MTN Group’s accounting, internal auditing, internal control and financial reporting practices and in terms of section 94(7)(a-i) of the Companies Act.

The committee performed the following activities during the year under review:

	considered the effectiveness of the internal audit function and monitored adherence to the annual internal audit plan;
	received and reviewed reports from both internal and external auditors concerning the effectiveness of the internal control environment, systems and processes. Nothing has come to the attention of the committee to indicate that any material breakdown in the functioning of these internal controls, systems and processes has occurred during the year under review;
	reviewed the reports of both internal and external auditors detailing concerns arising from their audits and requested appropriate responses from management;
	received and reviewed reports from internal audit concerning the effectiveness of the internal financial controls and concluded that no major control deficiencies have been identified;
	reviewed the processes in place for the reporting of concerns and complaints relating to accounting practices, internal audit, contents of the Group’s financial statements, internal controls and related matters. The committee can confirm that there were no such complaints of substance during the year under review;
	reviewed the report prepared by internal audit regarding the risk management processes in operation in the Group and the extent to which such have been embedded within each operating division;
	reviewed and approved the Group’s policy for non-audit services that may be provided by the external auditors. This policy sets out those services that may be provided by the external auditors and the required authorisation process;
	approved the non-audit-related services performed by the external auditors in the year in accordance with the policy established and approved by the board;
	approved the external auditors’ fees for 2011; and
	considered the independence and objectivity of the external auditors and ensured that the scope of additional services provided did not impair their independence.

The Group’s external auditors are PricewaterhouseCoopers Inc. (PwC) and SizweNtsalubaGobodo Inc. Fees paid to the auditors for the year under review are disclosed in note 6 to the annual financial statements.

After assessing the requirements set out in section 94(8)(a-c) of the Companies Act, the committee is satisfied with the independence and objectivity of the external auditors, and recommends the reappointment of the joint external auditors at the next annual general meeting.

Following the review by the committee of the annual financial statements of MTN Group for the year ended 31 December 2011 and based on the information provided to it, the committee considers that, in all material respects, the Group complies with the provisions of the Companies Act, as amended, International Financial Reporting Standards and the JSE Listings Requirements, and that the accounting policies applied are appropriate. The committee recommended the Group’s 2011 integrated business report and annual financial statements for approval by the board on 6 March 2012.

The committee is satisfied that the board has performed a solvency and liquidity test on the Company and has concluded that the Company will satisfy the test after payment of the final dividend.

In compliance with paragraph 3.84(h) of the JSE Listings Requirements, the committee reviewed the performance, appropriateness and expertise of the Group chief financial officer, Mr NI Patel, and was satisfied with his expertise and experience. The committee has satisfied itself that Mr NI Patel has the appropriate expertise and experience to fulfill this role and has performed appropriately during the year under review, and that the resources and expertise of the finance function are appropriate and adequate.

AF van Biljon
Audit committee chairman

Fairland
6 March 2012