Corporate Governance continued 5. Audit and Risk Committee (continued) AFRICAN DAWN 18 ANNUAL REPORT 2015 • External audit • Act as a liaison between the external auditors and the Board; • Obtain information in order to satisfy itself as to the competency of the external auditors and then nominate for appointment by shareholders; • Consider the scope of audit and non-audit services which the external auditors may provide to the Group; • Review letters from auditors stating points of improvement or control deficiencies; • Approve the fees of the external auditors and assess their performance; and • Annually assess the independence of the external auditors. • Risk management There was no separate risk committee and the audit committee assumed the responsibility and tasks. The responsibilities include, ensuring that management’s processes and procedures are adequate to identify, assess, manage and monitor, Company specific and Group risks; The following risks received detail attention and mention: • Financial / liquidity risks • Information technology risk • Human resources risk • Operational risk • Legal/compliance risk • Strategic risk Managers are urged to identify, report and assist with mitigating controls and procedures to lower the risk to acceptable levels. 6. Risk Management The Board is ultimately responsible for the management of risk. Due to the importance and need for good governance it is assisted by the audit committee. The management of risk has included a proactive approach through an implemented system of effective internal controls maintained and constantly improved by competent ethical managers. The management of risk relies on well-established governance processes and relies on both individual responsibility and collective oversight, supported by comprehensive reporting. The risk approach is one of strong corporate oversight, with the executives having proactive participation in managing the risks and are responsible for identifying and contributing to mitigating strategies to manage risk to an acceptable level. Risk management is seen as the responsibility of each and every employee. The significant risks are formally communicated to the Board (via the audit committee), in minutes of meetings which monitors that risks taken are within acceptable tolerance and appetite levels. The risk appetite is the maximum residual risk that Afdawn is willing to take, the parameters being set by business strategies, business models, review and approving budgets, forecasts and monthly management packs. Risks pertaining to the Group as a whole, but especially focused on liquidity, asset management, credit risk, market risk and human resources, are noted and managed on an in-house risk register presented at monthly Exco meetings. The identified risks, their likelihood of occurrence, severity if occurred, mitigating control and the risk management outcome are discussed on a monthly basis. Risks are ranked and prioritised to ensure swift response and intervention to risks outside the Board’s tolerance levels. Liquidity risks are managed on a short term, and long term basis ensuring pairing of known cash in and outflows, with predictions of expected cash flows. Credit risk is formally managed by the credit committee, who is tasked with managing advances in such a way to ensure repayment of capital plus earnings, and to assess the outstanding value with expected repayment and manage collections of outstanding debts.
AFRICAN DAWN 2015 Annual Report
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