Summarised governance report

Audit committee


Chairperson: Vuyisa Nkonyeni			Number of meetings: Eight


Members: Isaac Malevu, Ras Myburgh and Chanda Nxumalo			Committee attendance: 100%

COMPOSITION AS AT 31 DECEMBER 2021

Vuyisa NkonyeniChairperson

Isaac Mophatlane

Ras Myburgh

Chanda Nxumalo

ROLE AND PURPOSE

The committee is an independent, statutory committee whose members are appointed annually by Exxaro's shareholders in compliance with section 94 of the Companies Act and the principles of good governance. In terms of the Companies Act, this committee has an independent role with accountability to the board and shareholders. The committee does not assume the functions of management, which remain the responsibility of the executive directors, prescribed officers and other members of senior management, nor does it assume accountability of the functions performed by other board committees. In addition to the Companies Act, the committee's duties are guided by the JSE Listings Requirements, King IV and its terms of reference.

The committee is governed by its terms of reference that codifies its roles and responsibilities. To assist the board, the committee plays an essential role in providing independent oversight over the following:

Quality and integrity of the financial statements and related public announcements
Integrity and content of the integrated reporting process
Qualification and independence of the external auditor
Scope and effectiveness of the external audit function
Scope and effectiveness of the overall combined assurance process
Effectiveness of the internal controls and internal audit function
Integrity and efficacy of the risk management process relating specifically to internal controls and financial reporting risks through assurance over the system controls and policies in place

TERMS OF REFERENCE

The committee's terms of reference were reviewed by external assurance providers and are aligned with legislation, regulations and King IV.

KEY FOCUS AREAS

2021/2022			Status

Review the strategy in relation to deployment of new postmodern ERP solutions to ensure acceptable cost, risk and alignment with the Exxaro strategy			Ongoing
Ensure alignment of the combined assurance process, internal audit plan and external audit plan based on a risk-based approach			Achieved
Review Exxaro's future strategy relations to insurance cover and self-insurance, taking into consideration global resistance to thermal coal and insurance markets			Ongoing
Oversee the project plan for financial and risk-based disclosures in terms of Exxaro's aim to comply with TCFD			Achieved
Approve the levels of materiality to be used for internal audit (including the audit protocols and the classification of findings) and consider levels of materiality for the independent external auditor			Achieved
Oversee the transition plans for the internal and external audit functions			Achieved

CONFIRMATION

The committee has due regard to its terms of reference, the Companies Act, the JSE Listings Requirements, as well as the principles and recommended practices of King IV in carrying out its duties. The committee is satisfied that it has considered and discharged its responsibilities in accordance with its terms of reference and fulfilled its mandate in terms of the Companies Act and King IV.