Audit committee

Chairperson: Vuyisa Nkonyeni	Meetings: Six
Members: Billy Mawasha, Isaac Mophatlane, Ras Myburgh and Chanda Nxumalo	Attendance: 88.5%

Audit committee report   (ESG report)

Composition during 2022

 

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 of the company. 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 for the functions performed by other committees of the board. In addition to the Companies Act, the committee's duties are guided by the JSE Listings Requirements and King IV.

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

• 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/integrated assurance process
• Effectiveness of internal controls and the internal audit function
• Assessing the adequacy of the company's insurance arrangements with regard to the nature of its business and insurable risks
• Integrity and efficacy of the risk management process relating specifically to internal controls and financial reporting risks through assurance over system controls and policies in place

Terms of reference

The terms of reference were reviewed and enhanced in accordance with the 2022 Institute of Directors South Africa guidance for audit committees and approved by the board. The terms of reference continue to be aligned with legislation, regulations and King IV.

Key focus areas for 2022 and 2023	Status
Review the strategy in relation to the deployment of new post-modern 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 in terms of a risk-based approach	Achieved
Review Exxaro's future strategy relations to insurance cover and self-insurance, taking into account global resistance to thermal coal and insurance markets	Ongoing
Continued to oversee the project plan for financial and risk-based disclosures in terms of Exxaro's aim to comply with the TCFD	Ongoing
Approve the levels of materiality to be used for internal audit (including audit protocols and classification of findings) and consider levels of materiality for the independent external auditor	Achieved
Oversee transition plans for internal and external audit functions	Achieved

Confirmation

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