{"id":2982,"date":"2022-06-19T10:15:11","date_gmt":"2022-06-19T08:15:11","guid":{"rendered":"https:\/\/famousbrands.co.za\/iar2023\/audit-and-risk-committee-report\/"},"modified":"2023-06-21T14:05:18","modified_gmt":"2023-06-21T12:05:18","slug":"audit-and-risk-committee-report","status":"publish","type":"page","link":"https:\/\/famousbrands.co.za\/iar2023\/governance-and-remuneration\/audit-and-risk-committee-report\/","title":{"rendered":"Audit and Risk Committee report<\/span>"},"content":{"rendered":"
\r\n
\r\n

\u201cIn 2023, Famous Brands continued to enhance its risk management processes and improve its financial controls. \r\n A key project was the continued implementation of the second year of our three-year IT security plan with pleasing improvements in our cyber security maturity.\u201d<\/h2>\r\n\r\n
\r\n

Mandate<\/h2>\r\n

The purpose of the Audit and Risk Committee is to assist the Board in discharging its oversight responsibilities, including safeguarding the Group\u2019s assets, ensuring adequate risk management and control processes, and preparing financial statements in compliance with all applicable legislation and regulations.<\/p>\r\n<\/div>\r\n <\/div>\r\n

\r\n
\r\n \"\" \r\n <\/div>\r\n<\/div>\r\n\r\n <\/div>\r\n\r\n\r\n

Attendance and composition <\/h2>\r\n\r\n \r\n \r\n \r\n \r\n
Members<\/td>\r\n Invitees<\/td>\r\n Relevant skills profile of members<\/td>\r\n <\/tr>\r\n <\/thead>\r\n
\r\n

Chairman<\/h4>\r\n
    \r\n
  • CH Boulle (4\/5)<\/li>\r\n <\/ul>\r\n

    Members<\/h4>\r\n
      \r\n
    • B Mathe (5\/5)<\/li>\r\n
    • T Mosololi* (1*\/5)<\/li>\r\n
    • F Petersen-Cook (5\/5)<\/li>\r\n <\/ul>\r\n <\/td>\r\n

\r\n
    \r\n
  • CEO<\/li>\r\n
  • Group Financial Director <\/li>\r\n
  • Chairman of the Board<\/li>\r\n
  • N Halamandaris <\/li>\r\n
  • Group Risk Executive <\/li>\r\n
  • Internal Audit Manager <\/li>\r\n
  • Company Secretary<\/li>\r\n
  • Representatives from KPMG (external auditors) <\/li>\r\n <\/ul>\r\n <\/td>\r\n
Committee members are highly skilled in finance, accounting and risk<\/td>\r\n <\/tr>\r\n <\/tbody>\r\n<\/table>\r\n\r\n \r\n \r\n
*<\/sup><\/td>\r\n Thabo Mosololi was appointed as a member of the Audit and Risk Committee on 1 February 2023.<\/td>\r\n <\/tr>\r\n <\/tbody>\r\n<\/table>\r\n\r\n

Focus areas for 2023 <\/h2>\r\n\r\n\r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n \r\n
General <\/td>\r\n <\/tr>\r\n
\r\n
    \r\n
  • Reviewed and approved the Committee Charter. <\/li> \r\n
  • Reviewed and recommended the IAR to the Board for approval. <\/li> \r\n
  • Provided our input on the suitability of the successor to the Group Financial Director. The Committee believes that the Group Financial Director-designate is appropriately qualified and experienced to lead the finance function at Famous Brands. <\/li>\r\n
  • Reviewed and approved an updated Limits of Authority Framework<\/li>\r\n <\/ul>\r\n <\/td>\r\n <\/tr>\r\n \r\n
Annual assessments <\/td>\r\n <\/tr>\r\n
\r\n

In a closed session with the auditors, the Committee reviewed and considered the following assessments: \r\n\r\n

    \r\n
  • The Group Financial Director.<\/li> \r\n
  • The finance structure.<\/li> \r\n
  • The Head of Internal Audit.<\/li>\r\n <\/ul>\r\n <\/p>\r\n

    Overall, the Committee confirms that it is satisfied with the expertise and competency of the Group Financial Director and the finance function and identified areas for improvement. The Committee found that the Head of Internal Audit was knowledgeable and provided effective leadership to the department. The Chairman of the Committee provided feedback directly to the parties concerned. <\/p>\r\n <\/td>\r\n <\/tr>\r\n

Financial statements, accounting practices and other financial matters <\/td>\r\n <\/tr>\r\n
\r\n
    \r\n
  • Reviewed the assessment prepared by management of the Group\u2019s going concern status and made recommendations to the Board. The Committee concurred that the adoption of the going concern is appropriate for the preparation of the Group AFS.<\/li> \r\n
  • Reviewed the financial and general covenants applicable to the Group based on the lending and capital structure, which was found to have been appropriate and complied with.<\/li> \r\n
  • Considered matters raised relating to financial reporting and accounting practices, internal audit, contents of the Group\u2019s and the Company\u2019s financial statements, internal financial controls, and any related matters.<\/li>\r\n
  • Reviewed the processes for reporting matters relating to financial reporting and accounting practices, internal audit, contents of the Group\u2019s and the Company\u2019s AFS, internal financial controls and any related matters and agreed on matters that required improvement. The Committee can confirm that there were no matters of concern noted.<\/li> \r\n
  • Reviewed and recommended the short and long-form SENS announcements, interim results and Group AFS to the Board for approval.<\/li>\r\n
  • Considered accounting treatments, significant unusual transactions and key accounting judgements.<\/li> \r\n
  • Considered the reports of the internal and external auditors on the Group\u2019s systems of internal control, including financial controls, business risk management and maintenance of an effective internal control system.<\/li>\r\n
  • Received assurance from management that proper and adequate accounting records were maintained and the systems safeguard the assets against unauthorised use or disposal.<\/li> \r\n
  • Reviewed the Group tax report.<\/li>\r\n <\/ul>\r\n <\/p>\r\n \r\n <\/td>\r\n <\/tr>\r\n\r\n

The Committee is of the opinion that there were no material breakdowns in internal controls, including financial controls, business risk management and the maintenance of effective material control systems.<\/p><\/td>\r\n <\/tr>\r\n

External audit <\/td>\r\n <\/tr>\r\n
\r\n

\r\n

    \r\n
  • Considered the quality controls and processes of the external auditor and specifically audit quality reviews conducted over the designated auditor, including those performed by the Independent Regulatory Board for Auditors (IRBA) as part of its routine review process in terms of the Auditing Profession Act.<\/li> \r\n
  • Considered the appropriateness of the other auditors engaged to perform audits within the Group, being Blick Rothenberg in the UK and PKF Botswana, and deemed them appropriate.<\/li> \r\n
  • Reviewed the external auditors\u2019 report on the consolidated and Company AFS and the key audit matter.<\/li>\r\n <\/ul>\r\n <\/p>\r\n \r\n <\/td>\r\n <\/tr>\r\n \r\n

Our external auditor was appointed in 2020, and the Committee is of \r\n the opinion that the firm remains independent. Our lead external audit partner will rotate off the audit in 2025. There were no provision of \r\n non-audit services from the external auditor in 2023.<\/p><\/td>\r\n <\/tr>\r\n

Internal audit and internal financial reporting controls<\/td>\r\n <\/tr>\r\n
\r\n

\r\n

    \r\n
  • Reviewed and approved the internal audit business plan and budget.<\/li> \r\n
  • Performed the annual review and approval of the Internal Audit Charter. <\/li> \r\n
  • Reviewed the internal audit reports and processes.<\/li>\r\n
  • Reviewed the ongoing commitments to ensure that the CEO and Group Financial Director can provide a positive statement on the adequacy and effectiveness of internal financial reporting controls.<\/li> \r\n
  • Oversaw the refining and mapping of our critical financial controls, taking into account the changing environment and ensuring that out risk control metrics are appropriate.<\/li>\r\n \r\n <\/ul>\r\n <\/p>\r\n \r\n <\/td>\r\n <\/tr>\r\n
Risk management <\/td>\r\n <\/tr>\r\n
\r\n

\r\n