Adcock Ingram Integrated Report 2018

ANNUAL FINANCIAL STATEMENTS 64 ADCOCK INGRAM  Integrated Report 2018 Audit Committee report This report is presented by the Audit Committee (Committee), appointed by the Board of Directors and endorsed by shareholders in respect of the year ended 30 June 2018. The report is prepared in accordance with the requirements of the Companies Act and the recommendations of King IV and describes, how the Committee discharged its obligations in terms thereof, including the fulfilment of those duties assigned to the Committee by the Board during the reporting period. COMMITTEE COMPOSITION AND MEETING ATTENDANCE The Committee complies with King IV, which provides that all members should be independent non-executive directors all of whom are suitably skilled and experienced. The Committee’s composition, qualifications and meeting attendance during the year under review were as follows: Committee members Qualifications Meeting attendance 2 Chairperson MI Sacks ( Resigned 29 January 2018 ) 1 CA(SA), AICPA (ISR) 2/2 J John ( Appointed 20 February 2018 ) 1 CA(SA), CD (SA), CIA, QIAL 4/4 Members L Boyce CA(SA), MCom (Fin Mgt) 4/4 M Haus MB ChB, MD, DCH, FCFP, FFPM 4/4 RI Stewart MB ChB, PhD 4/4 Members of executive management and representatives from internal audit and the external auditors are invited to attend all meetings: Invitees Meeting attendance AG Hall (CEO) 4/4 D Neethling (CFO) 4/4 D Cathrall (EY) 3/4 S Naidoo (EY) 4/4 S Pietropaolo (Head of Internal Audit) 3/4 1 See changes to Board on page 9. 2 The attendance reflects the number of scheduled meetings. No additional meetings were held during the financial year. One regular scheduled meeting was held after the year end and before publication of the report. ROLE AND FUNCTION OF THE COMMITTEE The role and responsibilities of the Committee are governed by a formal charter which is annually reviewed and approved by the Board. A formal evaluation of the Committee is also carried out annually and the Board is satisfied that the Committee has fulfilled all its statutory duties, including those duties assigned to the Committee by the Board during the year under review, the relevant information in each case, detailed below. EXECUTION OF FUNCTIONS DURING THE YEAR INTERNAL AUDIT The Committee has reviewed and approved the internal audit charter and the annual internal audit plan, including compliance therewith, and concluded that the planning, processes and application of internal audit, including the quality of their reporting on internal audit outcomes and related matters was inclusive and comprehensive. Having regard to the reports and assessments presented by internal audit, the Committee is satisfied that the internal financial controls are effective and that there were no material breakdowns in the Group’s systems and internal controls. The Committee is similarly satisfied that the Head of Internal Audit possesses the appropriate expertise and experience to meet the responsibilities of his position and that the internal audit department is effectual and adequately resourced with technically competent personnel. EXTERNAL AUDIT At the AGM for 2017, shareholders confirmed the re-appointment of Ernst and Young Inc. (EY), as independent external auditors until the 2018 AGM, the Committee and the Board approving and endorsing their terms of engagement and their fee structures. EY has been the external auditors since the Group’s listing in 2008. The designated registered audit partner presently responsible for and who undertook the Group’s audit is Mr Dave Cathrall, who has served in this role for three years, but will be rotated off the audit due to his retirement. The Committee was satisfied with the quality of the external audit process and the team assigned to the audit. No matters of concern were noted by the committee regarding the performance of the external auditors.