We apply a combined assurance model to optimise assurance by management, as well as internal and external providers, while fostering a strong ethical climate and mechanisms to ensure compliance.

Using our board-approved ERM approach, management identifies key risks facing Exxaro and implements the necessary internal controls (Adequate and effective control in our ESG report) with comparable information for trend analysis where possible.

The board and audit committee assessed the effectiveness of controls for the year ended 31 December 2020 as satisfactory, principally through a process of management self-assessment (including formal confirmation by executive management), reports from internal audit, independent external audit and other assurance providers.

APPROACH, GOVERNANCE AND REPORTING

Exxaro defines assurance broadly to cover all sources, including external assurance, internal audit, management oversight and regulatory inspections.

Our combined assurance model includes and optimises all assurance services and functions to collectively provide an effective control environment and support the integrity of information used for internal decision making by management, the board and its committees, and in our external reports including:

• Corporate governance disclosures in terms of King IV
• Financial statements and other external reports, including our integrated report and ESG report

The forum’s activities and outcomes of assurance reports are presented quarterly to the audit committee.

ASSURANCE REVIEW

For the year under review, the sources, level and focus area of assurance, commissioned and performed, are summarised below.

	Function assured
Focus area	Assurance provider		Tier/level of   assurance*		Corporate		BU
External/statutory audit	PwC		3		Yes		Yes
Selective non-audit services	PwC		3		Yes		Yes
Sustainable development/KPIs	PwC		3		Yes		Yes
Environmental liability provisioning	PwC		3				Yes
Mining rights and environmental legal compliance	Inlexso		3				Yes
B-BBEE dtic code compliance	Empowerdex		3		Yes		Yes
Mining charter compliance	Ngubane		3		Yes		Yes
Insurance risk surveys	IMIU		3				Yes
Major and mega capital projects	EY		3				Yes
Mineral Resource and Mineral Reserve statement	EY		3				Yes
Governance, risk and internal controls	EY		3		Yes		Yes
Employee benefits	Ngubane		3		Yes		Yes
SLP projects	Ngubane		3				Yes
ISO and OHSAS certifications	Various		3				Yes

*	Tier/level of assurance refers to independent external assurance.

Outcome of assurance reports

2018 to 2020

The total number of findings raised since 2018 is 309. The split by status of the findings is depicted in the chart below. As at 31 December 2020, there was a total of 150 findings that had been successfully resolved from the total of 309, leaving a total of 159 open findings that require the attention of management and assurance providers.

Status of findings	Internal audit		Other assurance providers		Total
Follow-up in progress	33		0		33
Ready for audit	40		74		114
Within timelines	5		2		7
Open/outstanding (overdue)	2		3		5
Total	80		79		159

Overdue findings have been classified by ratings assigned in the final audit report and split into audit source below.

Audit source	Level 1  (high)		Level 2  (medium)		Level 3  (low)		Not rated		Total
Internal audit	0		1		1		0		2
Other assurance providers	0		0		0		3		3
Total	0		1		1		3		5