AUDIT AND RISK COMMITTEE reportfor the year ended 23 December 2012

The Audit and Risk Committee met twice during the 26 weeks ended 23 December 2012 and the Internal and External Auditors presented formal reports to the Committee and attended these meetings by invitation. In response to the requirements of the Companies Act, King III and in terms of its charter, the Committee can report as follows:

  • The scope, independence and objectivity of the External Auditors was reviewed;
  • The audit firm Ernst & Young Inc., and audit partner Allister Carshagen are, in the Committee’s opinion, independent of the Company and have been proposed to the shareholders for approval to be the Group’s auditor for the 2013
    financial year;
  • On an on-going basis, the Committee reviews and approves the fees proposed by the External Auditors;
  • The appointment of the External Auditor complies with the Companies Act, as amended, and with all other legislation relating to the appointment of External Auditors;
  • The nature and extent of non-audit services provided by the External Auditors has been reviewed to ensure that the fees for such services do not become so significant as to call into question their independence;
  • The nature and extent of future non-audit services have been defined and pre-approved;
  • No reportable irregularities were identified and reported by the External Auditors to the Committee;
  • The Committee is satisfied that the internal financial controls of the Divisions and Group operated effectively throughout the 26 weeks ended 23 December 2012 and can be relied upon. In addition, the Committee is satisfied with the Group’s accounting policies and that these have been appropriately and consistently applied throughout the 26 weeks ended 23 December 2012;
  • The Committee reviewed this integrated annual report and recommended it to the Board for approval;
  • As at the date of this report, no complaints have been received relating to accounting practices and internal audit of
    the Company or to the content or auditing of the Company’s financial statements, or to any related matter; and
  • The Massmart website (www.massmart.co.za) has a link enabling the general public to lodge complaints with the Committee. Since establishing this functionality in 2009, no complaints have been received.

Chris Seabrooke

Chairperson of the Audit and Risk Committee
8 April 2013