Exxaro Resource limited Report Selector 2018

Report Selector

Exxaro Resources Limited Integrated report 2018

Combined assurance

Combined assurance

Approach, governance, and reporting

Assurance for Exxaro is defined in its broadest meaning to cover all sources, including external assurance, internal audit, management oversight and regulatory inspections.

The combined assurance model in Exxaro has therefore been expanded by including and optimising all assurance services and functions so that, collectively, these provide an effective control environment and support the integrity of information used for internal decisions by management, the board and its committees, and in our external reports including:

  • Corporate governance disclosures in terms of King IV
  • Integrated reports
  • Financial statements and other external reports.

Our combined assurance forum is a working group coordinating assurance activities within Exxaro. Standing invitees include members of the audit committee and sustainability, risk and compliance committee. The forum's activities and outcomes of assurance reports are presented quarterly to the audit committee.

When commissioning specific assurance prior to publishing external reports, the forum considers:

  • Whether assurance should be applied to underlying data used to prepare a report, or to the process for preparing and presenting a report, or both
  • Whether the nature, scope and extent of assurance is suited to the intended audience of a specific report
  • The specification of applicable criteria for measuring or evaluating the underlying subject matter of the report.

This well-defined and embedded process enables Exxaro to make specific disclosure on the approach of assurance over external reports including:

  • A brief description of the nature, scope and extent of assurance functions, services and processes underlying preparation and presentation of a report
  • A statement by the board on the integrity of a report and basis for this statement, with reference to the assurance applied.

2018 assurance in review

For the year under review, the sources, level, and focus area of assurance commissioned and performed, are summarised below.

  Where was it assured
  Focus area assured   Assurance
  External/statutory audit   PwC   Three   Yes   Yes
  Selective non-audit services   PwC   Three   Yes   Yes
  Sustainable development/KPIs   PwC   Three   Yes   Yes
  Environmental liability provisioning   PwC   Three   Yes
  Mining rights and environmental legal compliance   Inlexso   Three   Yes
  BBBEE dti code compliance   Empowerdex   Three   Yes   Yes
  Mining charter compliance   Ngubane   Three   Yes   Yes
  Insurance risk surveys   IMIU   Three   Yes
  Major and mega capital projects   EY   Three   Yes
  Resource and reserve statement   EY   Three   Yes
  Internal audit of control environment   EY   Three   Yes   Yes
  Employee benefits   Ngubane   Three   Yes   Yes
  Social and labour plan projects   Ngubane   Three   Yes
  ISO and OHSAS certifications   Various   Three   Yes
Tier/level of assurance refers to independent, external assurance

Outcome of assurance reports

The outcome of assurance reports issued since contracting the two largest independent assurance providers to the group, as well as for 2018 in isolation, are illustrated below.

2012 to 2018

Since 2012, 1 981 findings have been raised, broken down below.

2012 to 2018 (%)


In total, 1 528 findings were successfully resolved, although 453 of this total are open findings that require the attention of both management and assurance providers.

Status of findings Internal
Follow-up in progress 15 15  
Ready for audit 81 182 263  
Within timelines 44 48 92  
Open/outstanding (overdue) 38 45 83  
Total 178 275 453  

The overdue findings have been classified by ratings assigned in the final audit report, and split by audit source below.

Audit source Level 1 –
Level 2 –
Level 3 –
Not rated Total  
Internal audit 3 20 2 13 38  
Other assurance providers 9 27 9 45  
Total 12 47 11 13 83  

We then categorised the findings with overdue management actions by financial year and priority.

Financial year Level 1 –
Level 2 –
Level 3 –
Not rated Total  
2012 1 1  
2013 1 1  
2014 1 1 2  
2015 3 3  
2016 13 8 21  
2017 3 6 5 14  
2018 8 22 3 8 41  
Total 12 47 11 13 83  

2018 in isolation

In FY18, 129 findings were raised, broken down below.

2018 in isolation (%)

Of these, 126 open findings require the attention of both management and assurance providers.

Status of findings Internal
Ready for audit 23 12 35  
Within timelines 41 9 50  
Open/outstanding (overdue) 23 18 41  
Total 87 39 126  

Overall, 41 overdue findings have been classified in line with ratings assigned at the conclusion of the audit.

Audit source Level 1 –
Level 2 –
Level 3 –
Not rated Total  
Internal audit 14 2 8 24  
Other assurance providers 8 8 1 17  
Total 8 22 3 8 41  

Breaking these down into functional areas:

Functional area Number
of overdue
Operations 13  
Sustainability 10  
Projects and technology 8  
Finance 5  
Human resources 3  
Innovation and information management 2  
Total 41