Our performance in 2009 - Sappi

76 Corporate governance continued
Audit committee
The audit committee was established in 1984 and assists the board in discharging its duties
relating to the:
safeguarding of assets;
oversight role for the risk management function;
operation of adequate systems, and control processes;
reviewing of financial information and the preparation of accurate financial reporting and
statements in compliance with all applicable legal requirements and accounting standards;
reviews compliance with the group’s Code of Ethics;
oversight of the external auditors’ qualifications, experience and independence;
consideration and approval of non-audit services provided by the external auditors;
oversight of the performance of the internal and external audit functions;
monitoring of compliance with applicable external legal and regulatory requirements; and
oversight of non-financial risks and controls as well as IT governance matters through a
combined assurance model which will be enhanced during 2010 in line with King III Report
principles.
In terms of the Corporate Laws Amendment Act, which came into effect during the financial year,
the audit committee is required to perform certain duties, including the nomination for
appointment of an independent auditor and the determination of the independence of the auditor.
The audit committee monitors the qualifications, expertise, resources and independence of both
the internal and external auditors and assesses annually the auditor’s performance and
effectiveness. The audit committee approves the external auditor’s engagement letter, nature
and scope of the audit and the audit fee. The audit committee can confirm that it is satisfied with
the independence of the external auditor for the 2009 financial year. The audit committee
considers and approves non-audit services provided by the external auditors. This is only
contemplated for those non-audit services where significant cost or efficiency benefits are
anticipated from utilising external audit as opposed to other service providers. The audit
committee oversees the financial reporting process and is concerned with compliance with
accounting policies, group policies, legal requirements and internal controls within the group.
It reviews compliance with the group’s Code of Ethics and ensures facilities are in place to enable
employees to submit concerns confidentially or anonymously, and ensures independent
investigations are conducted where necessary. The audit committee consists of five independent,
non-executive directors and has satisfied its responsibilities for the year in terms of the mandate.
The adequacy of the mandate is reviewed and reassessed annually. The audit committee meets
with senior management, which includes the chief executive officer and the chief financial officer,
at least four times a year. The audit committee also meets at least once per year with the
management disclosure committee. The external and internal auditors attend these meetings
and have unrestricted access to the committee and its chairman. The external and internal
auditors meet privately with the audit committee on a regular basis. The audit committee chairman
is available at the annual general meeting. Regional committees exist in the three major regions
and are chaired by independent non-executive directors. These committees have a mandate
from the group’s audit committee, to whom they report on a regular basis and they meet at least
four times per year. These regional committees assist the Sappi Limited audit committee in the
discharge of its duties, particularly as regards the requirements of the Corporate Laws
Amendment Act, such as the review of the performance, independence and effectiveness of the
auditors as well as the review of the financial information and systems of internal controls of all
major operations throughout the group.The audit committee also considered and satisfied itself
of the appropriateness of the expertise and experience of the chief financial officer. Dr D Konar
has been designated as the audit committee financial expert as required by the Sarbanes-Oxley
Act of 2002.
Human resources and transformation committee
The responsibilities of the human resources committee are, inter alia, to determine the group’s
human resource policy and strategy, assist with the hiring and setting of terms and conditions of