LENMED AIR 2019.pdf

AUDIT COMMITTEE In executing its statutory duties in the year, the Audit Committee: In respect of external audit: + Received and reviewed assurances on the independence of the external auditors, PKF Durban and specifically the nominated partner Tania Marti-Warren. The chairman also met with the managing partners of PKF Durban to test the audit- practice policies on independence, partner succession planning and the robustness of the audit. The committee concluded that it is satisfied with the independence of the external auditors. + Agreed the terms of engagement of the external auditors. + Reviewed the work programme of the external auditors. + Determined and monitored a policy relating to non-audit services provided by PKF Durban and where applicable pre- approved such services. + Reviewed the reports of the external auditors to management and to the shareholders and recommended action where necessary. + Expressed its satisfaction with the competence of the external auditors and the quality of the audit. + Held separate discussions with the external auditors and determined that: – there were no matters of concern – there were no inspection reports issued by audit regulators relevant to the company over the review period + Approved the fees to be paid to PKF Durban for audit and non- audit matters. + Held discussions with and reviewed the reports of the external auditors of the foreign subsidiary companies that were not audited by PKF Durban. This included engaging with these auditors on their independence, the robustness of the audit and their reports to management. The committee is satisfied on all these counts. The partner of PKF Durban responsible for the audit is Tania Marti- Warren who has been in this position for five years. Tania will rotate off the audit after 2019. PKF Durban have been in office for 11 years and will be required to withdraw as external auditors in 2023 in terms of the IRBA demands for Mandatory Audit Firm Rotation. In the light of these upcoming events, the committee and the CFO debated whether it might be appropriate to anticipate the 2023 rotation date and to this end, engaged with other audit firms as well as the partners of PKF Durban. PKF Durban has introduced a senior partner to rotate with Tania from August 2019. After due consideration it has been agreed that the Group should only review the audit firm rotation in due course. The tenure of PKF Durban cannot extend beyond 2023. In respect of internal audit: + Approved the Internal Audit Charter. + Worked closely with PWC as internal auditors and approved their work programmes. The risk register is made available to the internal auditors as is the strategic plan. These assist the internal auditors in designing their work plan and priorities. The immediate need to focus on internal controls and system development has allowed the internal auditors to express their opinion on controls in their quarterly reports to the Audit Committee (see below). Future work plans will in addition address corporate governance and risk management. + Encouraged the internal auditors to work closely with the external auditors to ensure quality assurance on controls. + Reviewed the reports and recommendations of the internal auditor and where necessary made recommendations to management thereon. + Received reports of incidents which on investigation were not considered to be fraud, which did not lead to financial loss and which have been dealt with appropriately. + Received assurances from management and the internal auditors on the systems of internal control, which lead the committee to conclude that the controls are satisfactory. The company regularly reviews and upgrades its control systems based on the changing dynamics of the industry and reports received. These serve as the standards on which the internal audit programme is based. + While some breaches in internal control were identified during the year, the impact on the Group has been negligible and the control systems were reinforced. + Held separate discussions with the internal auditors and determined that there were no matters of concern. + Expressed satisfaction on the performance of the internal auditors and that the Internal Audit is robust and effective. In respect of IT: + Approved the terms of the IT Charter and reviewed the work of the IT Governance Committee. + Reviewed the IT risk register and made recommendations where appropriate. + Received presentations on cybersecurity threats and reviewed management’s recommendations on how to counter these. In the current climate, where businesses of all sizes and sectors are subject to ongoing cyberattacks, the company has introduced several additional controls to provide a defence against such attacks. While no system can guarantee there will be no penetration from attack, our records show that we have been able to ward off such attacks which occur almost daily. + Agreed with the decision of management to insure against cyberrisk. + Considered the adequacy of the back-up and cloud arrangements following a visit of the Chairman of the committee to these facilities. In respect of accounting and reporting matters: – Received no reports or complaints from third parties from within or outside the Group relating to: (a) accounting practices (b) content or auditing practices of financial statements (c) internal financial controls of the Group (d) any related matters Board committees continued 72 ENSURING AND PROTECTING VALUE