Annual integrated report 2016

2. Assurance

Bidcorp has developed a robust, independent, risk-based internal audit

function that delivers real value add to the group. A risk-based internal

audit methodology is applied, with input from divisional management.

The methodology is aligned with the organisation’s risk management

processes. In accordance with the group’s combined assurance

model, the internal audit team liaises with the external auditors,

the insurance risk analysis team and other assurance providers to

maximise efficiencies in the assurance coverage of key risks.

An annually prepared internal audit plan embraces the principle of

combined assurance, and is presented to the audit and risk committee

for review and approval. To achieve the objectives of the internal audit

processes, the audit and risk committee considers the objectives and

rationale that drive the plan.

The Bidcorp internal audit structure provides a progressive and

responsive service that objectively evaluates business processes and

internal controls. It simultaneously supports management efforts to

foster a strong control environment focused on operational excellence.

In light of growing reliance on information technology (IT), specialised

IT auditing and consulting skills are being developed within the

internal audit team. This will continue to be a major area of focus and

development.

The purpose, authority and responsibility of the internal audit function

are defined in a board approved charter that is consistent with the

Institute of Internal Auditors’ definition of internal auditing and the

principles of King III. Internal audit focuses on the following principal

areas, as required by King III:

■

objective assessment of the effectiveness of the risk management

process, internal financial control (including an assessment of the

adequacy of accounting records) and overall operational internal

control;

■

systematic analysis and evaluation of business processes and

associated controls;

■

evaluation of the company’s governance processes; and

■

provision of a source of information, as appropriate, in any

instances of fraud, corruption or unethical behaviour and in any

cases of irregular activity.

In the past year, internal audit continued to function independently and

objectively throughout the group. The internal audit manager within

each division, and at group level, reports functionally to the chairman of

the audit and risk committee. Unrestricted access to members of the

audit and risk committee and executives of the organisation is available

to the internal audit function. Regular and separate meetings between

the divisional internal audit managers and the chairman of the audit

and risk committee took place.

3. Compliance

Bidcorp recognises that potential vulnerability to the risk of statutory

and regulatory non-compliance is created by the widespread

geographies across which the group operates. Legislative impacts

on each business differ from jurisdiction to jurisdiction. Each entity is

therefore required to identify the legislative and regulatory requirements

that apply to its specific operating environment and the information

that must be held in terms of this legislation.

Bidcorp is listed on the JSE Limited. As such, the board annually

confirms that the company complies with JSE Listings Requirements.

The board places strong emphasis on the highest standards of

financial management, accounting and reporting. Financial statements

are prepared in accordance with International Financial Reporting

Standards (IFRS). On non-financial issues, the company follows

the Global Reporting Initiatives (GRI G3.1) sustainability reporting

guidelines on economic, environmental and social performance. The

board has appointed a social and ethics committee. In addition, the

board has placed compliance with social and ethics standards –

group-wide, industry-wide and across regions – on the agenda of the

audit and risk committee.

The group is committed to implementing King III principles and best

practice recommendations. Bidcorp performs an annual review to

assess the extent to which the group continues to apply King III

principles and recommended practices. This analysis identifies the

actions taken to ensure application of governance principles and those

principles that will require ongoing attention and action.

Bidcorp has made use of the Institute of Directors Southern Africa’s

(IoDSA) recommended Governance Assessment Instrument (GAI)

as a self-assessment tool to assess the extent of the application of

the principles and practices recommended by King III. Results of this

review are included in the summary table overleaf (page 40).

www.

The Bidcorp detailed King III governance register can be

found in the online report.

www.

The Bidcorp detailed JSE Listings Requirements compliance

Governance review

Bidcorp Limited Annual integrated report 2016 |

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