The Committee consists of three suitably qualified Independent Non-executive Directors. The following Independent Non-executive Directors served on the Committee during the financial year under review:

• Bruno Fernandes (appointed Chairperson on 25 May 2020)
• Alice Marie le Roux (appointed on 25 May 2020)
• Mmaboshadi Chauke (appointed on 01 June 2020)

The Committee held five meetings during the year under review which is inclusive of one special meeting to approve the Annual Financial Statements and the Integrated Report. The Executive Directors, external auditors, internal auditor and senior management have a standing invitation to attend meetings of the Committee. At these meetings, the Committee received and considered reports from external audit, internal audit, Group finance and the Group company secretariat, legal, governance, Group information technology, and risk and compliance departments.

At each Annual General Meeting (AGM), the Board shall present the shareholders with at least three suitable candidates from amongst the Independent Non-executive Directors, on recommendations by the Nomination Committee, for election as Committee members. The Board shall have the power at all times to appoint, remove and replace any member from the Committee.

The Committee has the following specific responsibilities:

The Committee oversees integrated reporting, and in particular the Committee must:

• have regard to all factors and risks that may impact the integrity of the Integrated Report;
• ensure that appropriate financial reporting procedures exist and are working;
• review the Annual Financial Statements, interim reports, preliminary or provisional results announcements, summarised integrated information, any other intended release of price-sensitive information and trading statements;
• comment in the Annual Financial Statements on the financial statements, the accounting practices and the effectiveness of the internal financial controls of the Company;
• consider the frequency for issuing interim results and whether the external auditor should perform assurance procedures on the interim results;
• review the disclosure of sustainability issues in the Integrated Report to ensure that it is reliable and does not conflict with the financial information;
• confirm responsibilities to review information obtained from the auditors in terms of paragraph 22.15(h) of the JSE Listings Requirements;
• oversight of information technology (IT) governance;
• recommend to the Board the engagement of an external assurance provider on material sustainability issues; and
• recommend the Integrated Report for approval by the Board.

The Committee ensures that a combined assurance model is applied to provide a coordinated approach to all assurance activities, and in particular the Committee should:

• ensure that the combined assurance received is appropriate to address all the significant risks facing the Company via suitable mitigating controls;
• provide an effective counterbalance to executive management, thereby upholding the independence of internal and external assurance providers, to enhance effectiveness; and
• monitor the relationship between the external assurance providers and the Company.

The Committee is satisfied with the expertise and experience of the Group's Chief Financial Officer. The Committee further reviewed and satisfied itself of the appropriateness of the expertise, resources and experience of the Group's finance function.

The Committee is responsible for recommending the appointment of the external auditor and to oversee the external audit process and in this regard:

• nominates the external auditor who in the opinion of the Committee is independent of the Company, for the appointment by the shareholders;
• approves the terms of engagement and remuneration for external audit engagement;
• monitors and reports on the independence of the external auditor in the Annual Financial Statements;
• ensures that the appointment of the auditor complies with the provision of the Companies Act, paragraph 22.15 of the JSE Listings Requirements and any other legislation relating to the appointment of the auditors;
• defines a policy for non-audit services;
• ensures that there is a process for the Committee to be informed of any issues identified and reported by the external auditor; and
• reviews the quality and effectiveness of the external audit process.

PwC was appointed as external auditor of the Company and the Group. The Committee has satisfied itself that the external auditor is independent of the Group, as set out in the Companies Act, which includes a consideration of conflicts of interests as prescribed by the Public Audit Act no 25 of 2004 (PAA). There is a formal policy in respect of provision of non-audit services by the external auditors. The Committee approves the nature and extend of any non-audit services that the external auditor would provide. During the year under review, the Committee met with the external auditors without management being present. The Chairperson also met with the auditors separately.

The Committee is responsible for overseeing the internal audit function, and in particular the Committee:

• annually reviews and approves the internal audit plan and Charter;
• ensures that the IA function remains independent and has the necessary resources, standing and authority to discharge its duties;
• The results of the work carried out by IA as per the audit plan including action plans for management were reviewed by the Committee.

The Committee is an integral component of the risk management process and specifically the Committee must oversee financial reporting risks; internal financial controls; fraud risks as it relates to financial reporting; and IT risks as it relates to financial reporting. The Committee performed all the functions necessary to fulfil its risk management role including the following:

• ensuring the establishment of an independent risk and compliance function at a Group level;
• overseeing the development, annual review of the risk management policy and plan risk management to recommend for approval to the Board;
• overseeing compliance risk management and compliance monitoring;
• monitoring implementation of the policy and plan for risk management taking place by means of risk management systems and processes;
• making recommendations to the Board concerning the levels of tolerance and appetite, and monitoring that risks are managed within the levels of tolerance and appetite as approved by the Board;
• ensuring that risk management assessments are performed on a continuous basis and at least once a year;
• ensuring that management considers and implements appropriate risk responses;
• ensuring that continuous risk monitoring by management takes place;
• expressing the Committee’s formal opinion to the Board on the effectiveness of the system and process of risk management; and
• reviewing reports concerning risk management that are to be included in the Integrated Report, these reports bein timely, comprehensive and relevant.

The Committee has:

• evaluated the adequacy and effectiveness of the accounting policies adopted by the Company in terms of IFRS, JSE Listings Requirements and other legal requirements;
• considered the adequacy and clarity of disclosures in the financial statements;
• reviewed the basis on which the Company has been determined a going concern and made a recommendation to the Board;
• reviewed the effectiveness of financial management and the quality of internal accounting control systems and reports produced by financial management; and
• reviewed the impact of new financial systems, tax and litigation matters on financial reporting.

After consideration of all of the findings reported by internal audit covering those areas included in their annual work plan and explanations given by management, the Committee concluded that there had been no material breakdown in the Company's overall control system and the internal financial controls form a reasonable basis for the preparation of reliable annual financial statements.

The Committee is satisfied that the Group Annual Financial Statements are based on appropriate accounting policies supported by reasonable and prudent judgements and estimates. The Committee is of the view that, in all material respects, the Annual Financial Statements comply with the relevant provisions of the Companies Act, JSE Listings Requirements and IFRS and fairly present the financial position and the results of the Group's operations and cash flows for the year ended 30 June 2021. Having achieved its objective for the financial year, the Committee recommended the Annual Financial Statements for the year ended 30 June 2021 for approval to the Board.

The Committee appraised the independence, quality and effectiveness of the external audit function. Part of this process was to obtain confirmation from the external auditor that the firm, partner and staff responsible for the audit comply with all legal and professional requirements in regard to independence. The Committee also approved the fees paid to the external auditors. The Committee approved the policy related to the audit and permissible non-audit services that PwC provides. Fees paid to the external auditor for the year were considered reasonable when compared to non-audit service, and PwC was assessed as independent.

The Committee confirmed its satisfaction with the independence and level of service rendered by the external auditor, PwC, for the 2021 financial year

The Committee has considered the key audit matters, firstly goodwill impairment assessment and secondly the capitalisation and impairment assessment of internally generated software, noted in the independent auditor's report, and is satisfied that these have been adequately addressed by the external auditors.

The Committee acknowledges its responsibility on behalf of the Board to ensure the integrity of these Annual Financial Statements. The Committee has accordingly applied its mind to the report and believes that it appropriately and sufficiently addresses all material issues, and fairly presents the performance of AfroCentric Group for the year. The Committee recommends these Annual Financial Statements to the Board for approval.