We are pleased to present our report for the financial year ended 30 June 2016.

The Audit Committee is an independent statutory committee appointed by the shareholders. Further duties are delegated to the Audit Committee by the board of directors of the company. This report includes both sets of duties and responsibilities.


The MMI Audit Committee was fully functional during the financial year, and continued to discharge its responsibility with the support of the combined assurance forums established for various operating structures. The segmental combined assurance forums report to the MMI Audit Committee on a quarterly basis. The Audit Committee consists of four independent non-executive directors, and is attended by some management representatives of the segmental combined assurance forums.

In addition, the chief executive officer and the group finance director attend all Audit Committee meetings. The external and internal auditors attend Audit Committee meetings by invitation, and the external and internal auditors meet independently with the Audit Committee as and when required.

Additional detail on the Audit Committee can be found in the corporate governance report.


The Audit Committee has terms of reference that were approved by the board. The Audit Committee has regulated its affairs in compliance with the terms of reference and has discharged its responsibilities accordingly.

The terms of reference, including roles and responsibilities, were aligned with the requirements of King III, the Companies Act and other regulatory requirements.


The Audit Committee is satisfied with the independence and objectivity of the external auditor in accordance with section 94(8) of the Companies Act, which includes consideration of the auditor’s previous appointments, the extent of other work undertaken, and compliance with criteria relating to independence or conflict of interest as prescribed by the Independent Regulatory Board for Auditors. Requisite assurance was sought and provided by the external auditor that internal audit governance processes within the audit firm support and demonstrate its claim of independence.

The Audit Committee has approved a policy for the provision of non-audit services. Fees paid to the external auditors are disclosed in note 34 to the annual financial statements.

The Audit Committee nominated, for election at the annual general meeting, PricewaterhouseCoopers as the external audit firm and Mr Andrew Taylor as the designated auditor responsible for performing the function of auditor for the 2016 year. The Audit Committee has satisfied itself that the audit firm and designated auditor are accredited as such on the JSE list of auditors and their advisors.


The group internal audit (GIA) function has undergone a significant change during the past financial year. In order to align, inter alia, with the changes in MMI’s strategy and client-centric operating model, MMI entered into a strategic internal audit co-sourcing agreement with KPMG as external service provider.

MMI’s chief audit executive (CAE), Ms A van der Colff was appointed on 1 May 2016, replacing the previous acting CAE, Ms J Terblanche, who fulfilled this role until 31 March 2016. The role of the CAE within MMI is supported by a more confined GIA internal team and the CAE is responsible for the management and coordination of the KPMG relationship. It is anticipated that the new co-sourced GIA model will result in a high-performing, efficient, and cost-effective GIA function for MMI. The move should also improve the level of independent assurance provided to the MMI board and its committees.

The Audit Committee is responsible for ensuring the internal audit function is independent and has the necessary resources, standing and authority within the organisation to enable it to fulfil its duties. The CAE, in discharging of her duties, is accountable to the board and Audit Committee of MMI Holdings, which consists of MMI Holdings Ltd and its subsidiaries. The Audit Committee decides on the CAE’s appointment and removal, and is also responsible for assessing the performance of the chief audit executive and the internal audit function.

Internal audit operates according to the internal audit charter, which was approved by the board. Due to the changes currently in the business as a result of the implementation of a client-centric model, internal audit changed their approach to the audit plan in order to remain flexible through the change process. As a result, the risk-based internal audit plan for the 2016 financial year was approved by the Audit Committee on a quarterly basis.

The group implemented a combined assurance methodology, and the results were reported to the Audit Committee.


A high-level review of the design, implementation and effectiveness of the combined group’s IFC was performed in all material divisions. The IFC review provides comfort on the financial reporting controls, which are relied on for the preparation and presentation of the annual financial statements.

Nothing has come to the attention of the Audit Committee to indicate a material breakdown in the IFC during the financial year. This assessment was based on the results of the documented review noted above, information and explanations given by management and the group internal audit function, as well as discussions with the independent external auditors on the results of their audits.


Mary Vilakazi has continued in her role as the group finance director.

The Audit Committee has satisfied itself that Mary Vilakazi has the appropriate expertise and experience to act in this capacity.


The board has assigned oversight of the company’s risk management function to the Risk, Capital and Compliance Committee. The chairman of the Risk, Capital and Compliance Committee is a member of the Audit Committee and likewise, the chairman of the Audit Committee is a member of the Risk, Capital and Compliance Committee to ensure that information relevant to these committees is transferred effectively. The Audit Committee oversees financial reporting risks, IFC, and fraud and information technology risks as these relate to financial reporting.


The Audit Committee has reviewed the integrated report of the group for the year ended 30 June 2016 and submits that management presented an appropriate view of the group’s position and performance. The Audit Committee considers that the group accounting policies and annual financial statements comply, in all material respects, with International Financial Reporting Standards (IFRS).


MMI is fully committed to good sustainability principles. The group strives to be financially sound, socially responsible and environmentally friendly, with good corporate governance as the overarching principle. In this regard, MMI supports the recommendations as set out in King III.


The Audit Committee reviewed a documented assessment prepared by management, including key assumptions, of the going concern status of the company and made a recommendation to the board in accordance with this assessment. The board’s statement on the going concern status appears in directors’ responsibility and approval.



Meetings held in 2016




Frans Truter (chairman)


Fatima Jakoet


Syd Muller


Louis von Zeuner


During the year under review, the effectiveness of the Audit Committee was assessed by the Audit Committee members, and the results were shared with the board. The Audit Committee confirms that it discharged its duties and responsibilities in accordance with the terms of reference.

Chairman of the Audit Committee

6 September 2016