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.

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.

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

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

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.

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

Breaking these down into functional areas: