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Report of the audit, risk and finance committee

for the year ended 31 March 2007

REPORT OF THE AUDIT, RISK AND FINANCE COMMITTEE IN TERMS OF TREASURY REGULATIONS 27(1) (10) (B)
AND (C) OF THE PUBLIC FINANCE MANAGEMENT ACT OF 1999 AND THE SOUTH AFRICAN COMPANIES ACT, 1973, AS AMENDED.
The Audit, Risk and Finance Committee reports that it has adopted appropriate formal terms of reference as its Audit, Risk and Finance Committee charter, and has regulated its affairs in compliance with this charter, and has discharged all of its responsibilities contained therein.

In the conduct of its duties, the Audit, Risk and Finance Committee has, inter alia, reviewed the following:

• The effectiveness of the internal control systems;
  
• The effectiveness of the service provided by Internal Audit Department;
  
• The risk areas of the company’s operations covered in the scope of internal and external audits;
  
• The adequacy, reliability and accuracy of financial information provided by management and other users of such information;
  
• Accounting and auditing concerns identified as a result of internal and external audits;
  
• The company’s compliance with legal and regulatory provisions;
  
• The activities of the Internal Audit Service, including its annual work programme, coordination with the external auditors, the reports of significant investigations and the responses of management to specific recommendations;
  
• The independence and objectivity of the external auditors.
  

The Audit, Risk and Finance Committee is of the opinion, based on the information and explanations given by management and the Internal Audit function and discussions with the independent external auditors on the result of their audits, that the internal accounting controls are adequate to ensure that the financial records may be relied upon for preparing the financial statements, and accountability for assets and liabilities is maintained. Nothing significant has come to the attention of the Audit, Risk and Finance Committee to indicate that any material breakdown in the functioning of these controls, procedures and systems has occurred during the year under review.

The Audit, Risk and Finance Committee has evaluated the financial statements of Pebble Bed Modular Reactor (Pty) Limited for the year ended 31 March 2007 and, based on the information provided to the Audit, Risk and Finance Committee, considers that it complies, in all material respects, with the requirements of the Companies Act, 61 of 1973, as amended, the Public Finance Management Act, 1 of 1999, as amended and the International Financial Reporting Standards. The Audit, Risk and Finance Committee concurs that the adoption of the going concern premise in the preparation of the financial statements is appropriate. At their meeting held on 22 May 2007, the Audit, Risk and Finance Committee recommended the adoption of the financial statements by the Board of Directors.

On behalf of the Audit, Risk and Finance Committee

Ms R Morathi
Chairperson

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