The PPS Holdings Trust Audit Committee (‘TAC’) and the PPS Group Audit Committee (‘GAC’) are statutory board committees of the respective entities. The responsibilities of these committees are prescribed by the Companies Act and are outlined in their written terms of reference, which are in line with King III, and reviewed annually. These Terms of Reference were comprehensively updated during 2015 for the requirements of Board Notice 158. The committees have an independent role, with accountability to both the board and members in terms of the Companies Act and Trust Deed of PPS Holdings Trust.
The TAC has oversight over PPS Holdings Trust and the Group, while the GAC has oversight over PPS Insurance and its subsidiaries.
The report of these committees is presented to the members in terms of section 94(7)(f) of the Companies Act, No 71 of 2008 (‘the Companies Act’), and a similar provision in the Trust Deed.
Independent non-executive Trustees of PPS Holdings Trust:
Ms D L T Dondur (Chairman), B Acc (Hons), B Compt, CA(SA), MBA, Member of the TAC since 2012
Mr E A Moolla, B Iuris, Member of the TAC since 2011
Mr P Ranchod, B Compt (Hons), CA(SA), MBL, H Dip Business Data Processing, Member of the TAC since 2014
The appointment of the Members of the TAC was confirmed by PPS members at the annual general meeting held on 1 June 2015.
The TAC was established pursuant to the trust deed of PPS Holdings Trust and comprises three independent non-executive trustees of PPS Holdings Trust. The members of the committee are elected annually by the members of PPS Holdings Trust at its annual general meeting, after being nominated for election by the Nominations Committee and being approved by the PPS Holdings Trust Board for election. As PPS Holdings Trust is not an operating company, but consolidates the financial results of PPS Insurance and its subsidiaries, the TAC considers the recommendations of the GAC in regard to the integrated report and the annual financial statements of PPS Insurance and its subsidiaries. There is an overlap in attendance of the TAC and the GAC to ensure appropriate information is exchanged between the two audit committees and the TAC does not replicate the work performed by the GAC in regard to PPS Insurance and its subsidiaries.
Meetings of the TAC held during the year and attendance thereat:
|PPS Holdings Trust Audit Committee||12 March 2015||9 November 2015|
|Ms D L T Dondur (Chairman)|
|Mr E A Moolla|
|Mr P Ranchod|
Independent non-executive directors of PPS Insurance:
Prof H E Wainer (Chairman), B Acc, CA(SA), Member of GAC since 2001
Ms D L T Dondur, B Acc (Hons), B Compt, CA(SA), MBA, Member of GAC since 2013
Mr C Erasmus, B Sc, FIA, Member of GAC since 2009
Mr E A Moolla, B Iuris, appointed as a Member of GAC on 29 June 2015
Mr N G Payne, B Com (Hons), CA(SA), MBL, Member of GAC since 2007
Mr P Ranchod, B Compt (Hons), CA(SA), MBL, H Dip Business Data Processing, Member of the GAC since 2014Specialist consultant:
Prof C E Rabin, M Com, CA(SA), specialist consultant to the GAC since 2011, formerly a member of the GAC from 2005 to 2011.
Meetings held during the year and attendance thereat:
|Group Audit Committee||28 January 2015||12 March 2015||9 June 2015||16 September 2015||9 November 2015|
|Prof H E Wainer (Chairman)|
|Ms D L T Dondur|
|Mr C Erasmus|
|Mr E A Moolla (Appointed 29 June 2015)||N/A||N/A||N/A|
|Mr N G Payne|
|Mr P Ranchod|
|Prof C E Rabin*|
N/A = Not Applicable
The GAC comprises six non-executive PPS Insurance directors, all of whom are independent. Prof Rabin, who is not a member of the PPS Insurance Board, and was formerly a member of the GAC, was appointed as a specialist consultant to the GAC pursuant to the requirement of the Companies Act, 2008, that all members of the GAC have to be Board members. Four of the members of the GAC and the specialist consultant are chartered accountants. The fifth and sixth members of the GAC are an actuary and a lawyer, respectively.
The boards are satisfied that the members of these committees have sufficient recent and relevant financial experience to enable them to carry out their duties and responsibilities and that the members of the committees bring a wide range of relevant experience. The GAC meets at least four times a year, while the TAC is scheduled to meet at least twice a year. The Chairman of the Group Risk Committee and members of the Actuarial Committee are also members of the GAC. The Head of the Actuarial Control Function, the Company Actuary, the external auditors, the Head of the Internal Audit Function and other relevant role players are present at each meeting of the GAC. The external auditors are present at each meeting of the TAC.
The TAC and GAC meet both the external and internal auditors separately in private sessions, without executive management being present. The Chief Executive and the Financial Director, along with other members of management, attend committee meetings, as necessary, at the invitation of the chairmen of the committees.
The PPS Group’s policy on non-audit services, which is reviewed annually by the committees, sets out what services may be provided to PPS by the external auditors. All non-audit services are pre-approved by the GAC. The committees conduct a formal external auditor evaluation process. This evaluation occurs annually and includes various criteria and standards such as independence, audit planning, technical abilities, audit process/outputs and quality control, business insight and general factors (such as black economic empowerment credentials). The committees keep abreast of current and emerging trends in international accounting standards.
Both committees have satisfied themselves:
The committees, inter alia, assist the trustees and directors in discharging their responsibilities relating to the safeguarding of assets, the operation of adequate and effective systems and control processes and the preparation of the integrated report and fairly presented financial statements in compliance with all applicable legal and regulatory requirements and accounting standards.
The committees performed their functions required in terms of the Companies Act and the Trust Deed and executed their responsibilities in accordance with their terms of reference. The committees performed, among others, the following functions:
PricewaterhouseCoopers Inc (PwC) served as the Group’s external auditors for the 2015 financial year. The auditors’ terms of engagement were approved prior to the audit. The committees satisfied themselves that the external auditors’ appointment complies with the Companies Act and in particular Section 90(2) thereof, as well as the Auditing Profession Act.
The audit committees are satisfied that both PwC and the audit partner are independent. The external auditors provided assurance that their internal governance processes within their audit firm support and demonstrate their claim to independence.
Non-audit services were relatively immaterial for the current year.
The committees are satisfied that the expertise and experience of the financial director are appropriate to meet the responsibilities of the position.
The committees considered the expertise, resources and experience of the Group’s finance function and concluded that these are appropriate to meet the requirements of the Group.
The TAC and GAC confirm for the 2015 financial year that they have functioned in accordance with their terms of reference and as required by the Companies Act and Trust Deed of PPS Holdings Trust and that their reports have been approved by the directors and trustees.
On behalf of the audit committees:
|Ms D L T Dondur||Prof H E Wainer|
|Chairman of TAC||Chairman of GAC|
|6 April 2016||6 April 2016|