Report of the audit committee
The MTN Group audit committee (the committee) presents
its report in terms of section 94(7)(f ) of the Companies Act
and as recommended by King III for the financial year
ended 31 December 2015.
TERMS OF REFERENCE
The committee has adopted comprehensive and formal
terms of reference which have been approved by the
board and are reviewed on an annual basis.
MEMBERSHIP, MEETING ATTENDANCE AND
EVALUATION
Members of the committee are formally nominated by the
board for re-election by shareholders. The individual
members satisfy the requirements to serve as members of
an audit committee as provided in section 94 of the
Companies Act and have adequate knowledge and
experience. The composition of the committee and the
attendance at the meetings by its members are set out
below for the period January to December 2015:
| Members |
Attendance |
|
| KC Ramon (chairman) |
6/6 |
|
| NP Mageza |
6/6 |
|
| MJN Njeke |
3/6 |
|
| J van Rooyen |
6/6 |
|
The biographical details of the members are set out on
and of the integrated report. The committee
meets at least four times a year and members’ fees are
included in the table of directors’ emoluments and related
payments on .
The executive chairman and chief executive officer, the
Group chief financial officer, the Group chief business risk
officer, joint external auditors and other assurance
providers attend committee meetings by invitation. The
committee also meets separately with the joint external
auditors, internal auditors and senior management before
or after every meeting.
The effectiveness of the audit committee as a whole and
its individual members is assessed on an annual basis.
EXECUTION OF FUNCTIONS OF THE AUDIT
COMMITTEE
The committee is satisfied that, in respect of the period
under review, it has conducted its affairs and discharged its duties and responsibilities in accordance with its terms of
reference, the Companies Act and King III. To the extent
that the King III recommendations have not been applied,
an explanation is provided in the detailed corporate
governance report.
The committee discharged the following responsibilities
during the year under review:
External auditors
- Considered and satisfied itself with the independence
and objectivity of the joint external auditors and
designated registered auditors and ensured that the
scope of non-audit services rendered did not impair
their independence.
- Approved the non-audit-related services performed by
the joint external auditors during the year in accordance
with the policy established and approved by the board.
- Determined the joint external auditors’ terms of
engagement and fees for 2015.
- Pre-approved all agreements for the provision of nonaudit
services, through the chairman of the committee
to whom this authority has been delegated.
- Satisfied itself that the joint external auditors
and designated registered auditors are accredited on
the JSE’s list of auditors and advisers. The committee
recommends the re-appointment of the joint external
auditors and the re-appointment of the designated
auditors at the next annual general meeting.
Financial statements and accounting practices
- Reviewed the accounting policies and the annual
financial statements of the Group and the Company for
the year ended 31 December 2015, and based on the
information provided to it, the committee considers
that, in all material respects, they are appropriate and
comply with the provisions of the Companies Act, IFRS,
the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee, Financial Reporting
Pronouncements as issued by the Financial Reporting
Standards Council (FRSC), and the JSE Listings
Requirements.
- Reviewed the processes in place for the reporting of
concerns and complaints relating to reporting and
accounting practices, internal audit, contents of the
Group’s and the Company’s financial statements, internal
financial controls and any related matters. The committee
can confirm that there were no such complaints of
substance during the year under review.
Internal financial controls
- Reviewed the process in terms of which internal audit
performed a written assessment of the effectiveness
of the Group’s system of internal control (including
internal financial controls). This written assessment by
internal audit formed the basis of the committee’s
recommendation in this regard to the board in order for
the board to report thereon. The board’s report on the
effectiveness of the system of internal controls, which
the committee fully supports, is included in the directors’
report on page 8.
- Reviewed the reports of both internal and external
auditors detailing their concerns arising from their
audits and considered the appropriateness of the
responses from management.
Integrated reporting and combined assurance
- Reviewed the disclosure of the Group’s sustainability
information as detailed in the integrated report. Nothing
has come to the attention of the committee to indicate
that the information is in any way in conflict with the
information contained in the annual financial statements.
- Discussed the sustainability information with the
chairmen of the risk management, compliance and
corporate governance committee (risk committee) and
the social and ethics committee. The committee is
satisfied that assurance coverage as indicated was
obtained from internal and external assurance providers.
The Group’s external assurance provider’s independent
report is set out in the Group’s integrated report on
pages 118 to 119. In light of this the committee has no
reason to believe that the information on sustainability
as contained in the integrated report is not reliable to
the extent of the reported assurance.
- Considered and recommended the integrated report for
adoption and approval by the board.
Going concern status
- Considered the going concern status of the Group and
the Company on the basis of review of the annual
financial statements and the information available to the
committee and recommended such going concern
status for adoption by the board. The board’s statement
on the going concern status of the Group and Company
is contained on page 6 of the directors’ report.
Internal audit
- Considered the effectiveness of the internal audit
function and monitored adherence to the annual
internal audit plan.
- Reviewed the performance of the Group chief business
risk officer, Mr S Sooklal, and was satisfied that he has
the necessary expertise and experience to fulfil this role
and that he had performed appropriately during the
year under review.
Finance director and finance function
- Reviewed the performance of the Group chief financial
officer, Mr BD Goschen, and was satisfied that he has the
necessary expertise and experience to fulfil this role and
that he had performed appropriately during the year
under review.
- Considered, and has satisfied itself of the appropriateness
of the expertise and experience of the finance function
and adequacy of resources employed in this function.
Solvency and liquidity review
- The committee is satisfied that the board has performed
a solvency and liquidity test on the Company in terms of
section 46 of the Companies Act and has concluded that
the Company will satisfy the test after payment of the
final dividend.
The committee also considered guarantees issued on
behalf of subsidiaries.
The Group’s joint external auditors are PricewaterhouseCoopers
Incorporated and SizweNtsalubaGobodo
Incorporated. Fees paid to auditors for the year under
review are disclosed in of the Group annual
financial statements.
KC Ramon
Audit committee chairman
2 March 2016
