Audit and risk committee report

This is the report of the Bidcorp audit and risk committee (committee) appointed for the financial year ended June 30 2019 in compliance with the Companies Act and in terms of the JSE Listings Requirements.

The committee has discharged its responsibilities as mandated by the board, its statutory duties in compliance with the Companies Act and the King IV principles applicable to audit and risk committees. The committee’s charter, which can be found on the company’s website,, is aligned with the above legislation, regulations and principles.

Under the single chairmanship of Mrs H Wiseman for group and divisional audit and risk committees, the board is satisfied that this committee makes a strong contribution to the group.


The committee members for the financial year ended June 30 2019 have been appointed by shareholders’ resolution passed at the annual general meeting held on November 27 2018; and is made up of a minimum of three (3) independent non-executive directors and chaired by an independent non-executive director. The Bidcorp audit and risk committee members comprise Mrs H Wiseman (chairman), Messrs PC Baloyi and NG Payne, in line with the charter requirements.

The shareholders will be requested to approve the appointment of the chairman and members to the committee for the 2020 financial year at the annual general meeting scheduled for Thursday, November 14 2019.

The committee consists solely of independent non-executive directors who are all financially literate. The board considers the membership of the committee adequate and the members are sufficiently experienced to perform the duties in line with the charter requirements. The committee and its chairman are assessed annually. A brief profile of each of the members can be viewed on the board of directors’ CVs included on the company’s website.

The committee’s work is supported by five divisional audit and risk committees (divisional committees). These divisional committees play a vital role in the risk and assurance oversight of the five reporting segments being Australasia, UK, Europe, Emerging Markets, and Corporate. Findings from these divisional committees are reported to the group committee on a quarterly basis (bi-annually for Corporate). The divisional committees are chaired by Ms H Wiseman who also chairs the group committee. Each country in which Bidcorp operates present at the quarterly divisional committees, which are also attended by Corporate and internal audit representatives and the external auditors. All group committee members are invited to attend the quarterly meetings.


The purpose of the committee is to:

  • assist the board in discharging its duties relating to the safeguarding of assets, the operation of adequate systems, control and reporting processes, and the preparation of accurate reporting and financial statements in compliance with the applicable legal requirements and accounting standards;
  • oversee the suitability, appointment, independence and performance of the external auditor;
  • oversee the activities of, and to ensure coordination between, the activities of internal and external audit;
  • provide a forum for discussing financial, enterprise-wide, market, regulatory, safety and other risks and control issues, and to monitor controls designed to minimise these risks;
  • review the Bidcorp annual integrated report, in conjunction with the social and ethics committee, including the consolidated and separate financial statements, the interim report and any other public reports or announcements containing financial information;
  • receive and deal with any complaints concerning internal audit, the accounting practices or the content and audit of the annual financial statements and related matters; and
  • annually review the committee’s charter and output in order to report on the effectiveness of the committee to the board.


The committee met on six occasions during the period under review and key members of management attend meetings of the committee by invitation. At the half-year and year-end meetings closed sessions are held for committee members to engage directly with internal audit, external audit and management.

Director August 17
November 13
December 4  
February 15
May 10
August 22
H Wiseman (Chairman) ^ ^ ^   ^ ^ ^  
PC Baloyi ^ ^  ^   ^ ^ ^  
NG Payne ^ ^ ^   ^ ^ ^  

^ Attended in person, by video-conference or tele-conference.
* A special audit and risk committee meeting was called in order to review and recommend to the board the appointment of a new external auditor for the Bidcorp Group.

Duties carried out

The committee has successfully performed its duties during the financial year under review. In the fulfilment of these duties, the major areas of focus were assessing the impact of the new accounting standards on revenue recognition, financial instruments and leases; reviewing the application of JSE proactive monitoring and other pronouncements to group reporting; reviewing accounting for acquisitions and the valuation of put option liabilities; assessing the carrying value of property, goodwill, intangibles and investments; reviewing the characterisation of assets held for sale and discontinued operations; assessing the recoverability of trade receivables, valuation of inventory, customer and supplier rebates, as well as other matters requiring significant judgement.

The committee assessed risks associated with management override of controls, the ability of the group to continue as a going concern, review of related-party transactions, the overall presentation of the financial information to shareholders and review of the annual integrated report.

The committee reviewed the risks that could materially impact the ability of the group to deliver against its objectives and the related mitigation plans, providing feedback where appropriate.

The committee spent considerable time during the year reviewing its position in respect of the continuing retention of the services of KPMG Inc as its external auditor. The committee decided to change auditors, and following a competitive tender, the committee appointed PricewaterhouseCoopers Inc (PwC) in January 2019.

The committee confirms the following statutory and delegated duties were adequately addressed and sets out the results below:

Financial statements

The committee:

  • confirmed, based on management’s review, that the consolidated and separate Bidcorp company financial statements were prepared on the going concern basis;
  • examined the consolidated and separate financial statements and other financial information made public, prior to their approval by the board;
  • considered accounting treatments, significant or unusual transactions and accounting judgements;
  • considered the appropriateness of accounting policies and any changes made thereto;
  • considered any problems identified as well as any legal and tax matters that could materially affect the financial statements;
  • met separately with management, external audit and internal audit, and satisfied themselves that no material control weakness exists; and
  • successfully closed out queries from the JSE in respect of their proactive monitoring of annual financial statements, and incorporated their recommendations into the 2019 annual financial statements.

External audit

The committee:

  • recommended PwC to be appointed as the Bidcorp external auditors and Mr E Gerryts as the independent and accredited auditor respectively to the shareholders for appointment for the financial year ended June 30 2019, of the group and company, and ensured that the appointments comply with legal and regulatory requirements for the appointment of an audit firm and auditor;
  • approved the external audit engagement letter, the audit plan and the budgeted audit fees payable to the external auditors;
  • determined the nature and extent of all non-audit services provided by the independent auditors and pre-approved all non-audit services undertaken;
  • obtained assurances from the independent auditors that adequate accounting records were being maintained;
  • confirmed that no reportable irregularities had been identified or reported by the independent auditors under the Auditing Profession Act; and
  • recommended that PwC be reappointed as the Bidcorp external auditors for the year ended June 30 2020 at the 2019 annual general meeting.

Independence of external auditors, PwC

The committee:

  • reviewed representations made by PwC to the committee;
  • confirmed that the auditors did not, except as external auditors or in rendering permitted non-audit services, receive any remuneration or other benefit from the group;
  • confirmed the auditors’ independence was not impaired by any consultancy, advisory or other work undertaken;
  • determined the auditors’ independence was not prejudiced as a result of any previous appointment as auditors; and
  • considered the criteria specified for independence by the Independent Regulatory Board for Auditors and international regulatory bodies and found no cause for concern or doubt of the independence of the external auditors, PwC.

Internal control and internal audit

The committee:

  • reviewed the annual internal audit plans and evaluated the independence, effectiveness and performance of the internal audit function;
  • considered the reports of the internal auditors on the group’s systems of internal control including financial controls, business risk management and maintenance of effective internal control systems;
  • received assurances that proper accounting records were maintained and that the systems safeguarded the group’s assets against unauthorised use or disposal;
  • reviewed issues raised by internal audit and the adequacy of corrective action taken by management in response thereto;
  • assessed the adequacy of the performance of the internal audit function and found it satisfactory; and
  • concluded the opinion recommended to the board at year-end that there were no material breakdowns in internal control.

Risk management

The committee:

  • reviewed the group’s policies and approach to risk management and found them to be sound;
  • considered all material risks to which the group is exposed, ensuring that the requisite risk management culture, policies and systems are progressively implemented and functioning effectively;
  • management is accountable to the board for implementing and monitoring the processes of risk management and integrating this into day-to-day activities. These processes are confirmed on an ongoing basis through the completion of the quarterly Bidcorp management representation letter signed and submitted to the audit and risk committee;
  • performs ongoing monitoring of the enterprise-wide risk assessment process to ensure risks and opportunities are adequately identified, evaluated and managed at the appropriate level in each business, and that the individual and joint impact of risks identified on the group was considered;
  • reviewed legal matters that could have a material impact on the group, as well as considering the adequacy and effectiveness of the group’s procedures to ensure compliance with legal and regulatory responsibilities; and
  • considered reports provided by management, internal assurance providers and the independent auditors regarding compliance with legal and regulatory requirements and found Bidcorp’s processes to be sound and effective.

Combined assurance

The committee reviewed the plans and reports of the external and internal auditors, as well as other assurance providers including management; and concluded that these were adequate to address all significant financial risks facing the business.

Chief financial officer (CFO)

The committee:

  • considered the appropriateness of the experience and expertise of the CFO and concluded that this is appropriate;
  • considered the expertise, resources and experience of the finance function and concluded that these are appropriate; and
  • concluded that it is satisfied the appropriate reporting procedures are in place and operating effectively.

Consolidated and separate financial statements

The committee reviewed the consolidated and separate annual financial statements of Bidcorp for the year ended June 30 2019, and the committee is of the view that, in all material respects, it complies with the relevant provisions of the Companies Act and IFRS, and fairly presents the financial position at that date and the results of its operations and cash flows for the year then ended.

Comments on key audit matters, addressed by PwC in its external auditor’s report

The committee is satisfied with the conduct, quality and independence of PwC in carrying out its external audit of the Bidcorp annual financial statements for the year ended June 30 2019.

In order to provide stakeholders with further insights into its activities and considerations around key audit matters as reported by the external auditors, the committee wishes to elaborate as follows:

Key audit matter – goodwill impairment assessment

The committee received from management the results of the group’s annual goodwill impairment testing. The committee challenged the methodologies and assumptions used to assess the carrying value of goodwill, including the achievability of business plans and forecasts. Sensitivity analysis on the key inputs such as discount rates and working capital movements were performed and considered in determining any potential impairment. The external auditor’s reporting on impairment testing was also reviewed. The committee was satisfied with the conclusions reached by management and the goodwill-related disclosures in the consolidated annual financial statements (refer to notes 3 and 8.3 to the consolidated financial statements).

Key audit matter – assessment of agent versus principal and the impact on revenue recognition

The committee also considered the appropriate application of the agent versus principal accounting treatment in recognising revenue. The committee reviewed management’s assessment of arrangements involving the direct delivery of goods from suppliers to clients, the performance obligations governing the supply and delivery of those goods, the party which holds the inventory risk, and the extent of any discretion in establishing prices for the goods. Based on the assessment performed, it was concluded that Bidfood Netherlands is acting as an agent instead of as a principal in relation to certain chilled deliveries. The comparative period revenue and cost of revenue were restated to reflect this (refer to notes 3 and 4.1 to the consolidated financial statements). There was no impact on the comparative profit for the year, nor on the reported comparative assets, liabilities or net cash flows from operating activities.


Following the review by the committee for the year ended June 30 2019, the committee is of the view that, in all material respects, it has complied with the relevant requirements.

Having achieved its objectives for the financial year, the committee recommended the consolidated and separate financial statements for the year ended June 30 2019 for approval to the board.

Signed on behalf of the audit and risk committee by:

Helen Wiseman