Report of the audit and risk committee
for the year ended 30 June 2017
The audit and risk committee has pleasure in submitting its report, as required by section 94(7)(f) of the Companies Act, for the period under review.
The committee is governed by a formal charter that codifies its role and responsibilities, including the responsibility for reviewing accounting, auditing and financial reporting matters. The committee reviews adherence to Hyprop's systems of internal controls and, where necessary, monitors improvements.
All members of the audit and risk committee are independent non-executive directors, in compliance with the South African Companies Act and as recommended by King IV. The external and internal auditors and executive management are invited to attend every meeting of the committee.
Gavin Tipper's dual role as chairman of the board of directors and member of the audit and risk committee, is specifically approved by shareholders at the annual general meeting of the company.
During the period, the audit and risk committee:
- Considered any proposed changes to accounting policies
- Advised the board on any accounting implications of major transactions
- Reviewed the scope of work and reports of the internal audit function
- Recommended the appointment of external auditors for approval by shareholders
- Established guidelines for recommending the use of external auditors for non-audit services, to maintain independence
- Monitored compliance with REIT requirements, in accordance with the JSE Listings Requirements and confirmed that the risk management policy, which prohibits the company from entering into derivative transactions not in the ordinary course of business, has been complied with in all material respects
- Considered the JSE proactive monitoring process in respect of IFRS compliant consolidated financial statements.
The audit and risk committee is satisfied:
- With the independence of the external auditor, KPMG inc., after considering the report to the audit committee motivating its independence
- With the terms, nature, scope and proposed fee of the external auditor for the year ended 30 June 2017
- With the consolidated financial statements and accounting practices used in their preparation and has recommended the integrated annual report, including the consolidated financial statements, to the board for approval
- With the company's continuing viability as a going concern, which it has reported on to the board for the board's deliberation
- That the company's financial director, Laurence Cohen, has the necessary expertise and experience to carry out his duties, as required by paragraph 3.84(g)(i) of the JSE Listings Requirements.
- That the company has established appropriate financial reporting procedures and that these procedures are operating effectively, as required by paragraph 3.84(g)(ii) of the JSE Listings Requirements.
Concerns and complaints received from within or outside the group relating to accounting practices and internal financial controls, and the content or auditing of the consolidated financial statements, were considered by the audit and risk committee and dealt with as appropriate.
Audit and risk committee chair
1 September 2017