RESPONSIBILITY REPORTING

Audit committee report for the year ended 30 June 2015

Background

The committee is pleased to present its report for the financial year ended 30 June 2015. The committee's operation is guided by a formal charter approved by the board.

The committee has discharged all its responsibilities as contained in the charter. The committee reviews accounting policies and financial information issued to stakeholders and the chairman of the audit committee reports to the board on the committee's deliberations and decisions. The internal and external auditors have unrestricted access to the committee. Further, the committee regularly reviews its corporate governance practices in relation to the Company's compliance with the requirements of the Companies Act (the Act) and the King lII recommendations.

Objectives and performance

The overall high-level objectives and performance of the committee during the year were:

• To assist the board in discharging its duties relating to safeguarding of the Company's assets
• To ensure the existence and operation of adequate systems and control processes
• To control reporting processes and the preparation of fairly presented financial statements in compliance with the applicable legal and regulatory requirements and accounting standards
• To oversee the activities of internal and external auditors
• To perform duties that are attributed to it by the Act, the Johannesburg Stock Exchange (JSE) and King IIl.

The committee performed the following activities during the year under review:

• Received and reviewed reports from both internal and external auditors concerning the effectiveness of the internal control environment, systems and processes
• Reviewed the reports of both internal and external auditors detailing their concerns arising out of their audits and requested appropriate responses from management
• Made appropriate recommendations to the board of directors regarding the actions to be taken as a consequence of the committee's work
• Considered the independence and objectivity of the external auditors and ensured that the scope of their additional services provided did not impair their independence
• Reviewed and recommended for adoption by the board the financial information that is publicly disclosed, which for the year included:
  - The interim results for the six months ended 31 December 2014
  - The annual results for the year ended 30 June 2015
• Considered the effectiveness of internal audit, approved the three-year operational strategic internal audit plan and monitored adherence of internal audit to its annual plan. The committee also approved any deviations from the annual internal audit plan.

The objectives of the committee were adequately met during the year under review.

Membership

During the course of the year, the membership of the committee comprised solely of independent non-executive directors, as detailed below:
Mr HC Cameron – chairman
Ms AA Maule
Ms B Ngonyama
Mr TV Mokgatlha (resigned on 22 October 2014)

In addition, the chief executive officer, the chief financial officer, head of group internal audit, the group executive: risk, the head of compliance and the external auditors are permanent invitees to the committee's meetings.

External audit

The committee has satisfied itself, through enquiry, that the auditor of the Company is independent, as defined by the Act. The committee, in consultation with executive management, agreed to an audit fee for the 2015 financial year. The fee is considered appropriate for the work that could reasonably have been foreseen at that time. Audit fees are disclosed in note 25 to the annual financial statements.

The independence of the external auditor is regularly reviewed. Further, the approval of all non-audit-related services are governed by an appropriate approval framework.

Meetings were held with the external auditor where management was not present and, where concerns were raised, these concerns were adequately dealt with by the audit committee.

The committee has reviewed and is satisfied with the performance of the external auditors and will nominate, for approval at the annual general meeting, PricewaterhouseCoopers Inc. as the external auditor for the 2016 financial year, with Mr AJ Rossouw as the designated auditor. The committee confirms that the auditor and designated auditor are accredited by the JSE.

Chief financial officer review – Ms Brenda Berlin

The committee has reviewed the performance, qualifications and expertise of Ms Brenda Berlin through a formal evaluation process and confirms her suitability for appointment as chief financial officer in terms of the JSE Listings Requirements.

Annual financial statements

The annual financial statements have been prepared using appropriate accounting policies, which conform to International Financial Reporting Standards (IFRS). The committee has therefore recommended the approval of the annual financial statements to the board. The board has subsequently approved the annual financial statements.

Internal financial control (Statement on effectiveness of internal financial controls)

Based on the results of the formal documented review of the Company's system of internal financial controls, which was performed by the internal audit function and external auditors, and a formal documented review of the Company's mature system of combined assurance, nothing has come to the attention of the audit committee to indicate that the internal financial controls were not operating effectively.

HC Cameron
Chairman of the audit committee

3 September 2015