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The audit and risk committee (the committee) has pleasure in submitting its report to the shareholders as required in terms of section 94(7) of the Companies Act No 71 of 2008, as amended.
Each member is an independent director and has the adequate relevant knowledge, the ﬁnancial expertise and experience to equip the committee to properly execute its duties and responsibilities. Members’ qualiﬁcations are set out on Company leadership of this report.
The board notes the retirement of the chairman of the committee, Mr Chris Murray with effect from the date of the AGM.
Ms Lungile Cele will be elected as the replacement member of the committee. Shareholders will be required at the AGM to authorise the audit committee members to elect a chairperson from amongst the members.
During the year under review, ﬁve meetings were held. Details of attendance by members at the meetings are set out on Company leadership.
The committee reports that it has adopted appropriate formal terms of reference as its mandate, and has regulated its affairs in compliance with this mandate, and has discharged all of the responsibilities set out therein. During the ﬁnancial year under review, it reviewed the following matters:
The committee reviewed a presentation by the external auditor and, after conducting its own review, was satisﬁed with the independence and objectivity of Deloitte & Touche as external auditors and Mr M Mantyi as the designated auditor. The committee further approved the fees to be paid to Deloitte & Touche and their terms of engagement, as well aspre-approving the proposed contract with Deloitte & Touche for the provision of non-audit services to the company.
The committee has evaluated the annual ﬁnancial statements of ArcelorMittal South Africa Ltd and the group for the year ended 31 December 2015 and, based on the information provided to the committee, considers that the company and group comply, in all material respects, with the requirements of the Companies Act of South Africa, the International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, and applicable legislation.
The committee agendas provide for conﬁdential meetings between committee members and both the independent external and internal auditors.
The committee has oversight of the group’s ﬁnancial statements and reporting process, including the system of internal ﬁnancial control. It is responsible for ensuring the group’s internal audit function is independent and has the necessary resources, standing and authority in the organisation to discharge its duties. The committee oversees cooperation between internal and external auditors, and serves as a link between the board and these functions. The head of internal audit reports functionally to the chairman of the committee and the head of group internal audit of the holding company, ArcelorMittal Holdings AG, and administratively to the chief executive ofﬁcer.
The committee is of the opinion, after having considered the assurance provided by the internal audit function, that the group’s system of internal ﬁnancial controls in all key material aspects is effective and provides reasonable assurance that the ﬁnancial records may be relied upon for the preparation of the annual ﬁnancial statements. This is based on the information and explanations given by management and the group internal audit function.
The committee has satisﬁed itself that the newly appointed chief ﬁnancial ofﬁcer, Mr D Subramanian, has the appropriate expertise and experience.
The committee has assessed the competency, skills and resourcing of the group’s ﬁnance function, and has satisﬁed itself as to the overall adequacy and appropriateness of the ﬁnance function.
The committee has satisﬁed itself that the company secretary has the appropriate competence and experience and has maintained an arm’s-length relationship with the directors.
The committee, having fulﬁlled the oversight role regarding the reporting process for both the annual ﬁnancial statements and the integrated annual report and having regard to material factors that may impact the integrity of these reports, recommends the integrated annual report and the group and company annual ﬁnancial statements for approval by the board of directors.
The directors’ report has been included as part of the annual ﬁnancial statements.
3 February 2016