2014 Audited Report & Appointment of 2015 Auditor
 



00:00 Paulos Nyirenda: The auditor for 2016... Again it's in... The release date has already gone out. So the Audit Committee that does this work is a committee of the Board and it has a charter. I think we did look at this charter last year, so it's well covered by a charter. It oversees financial reporting process. It reviews financial control risk management as audited and it oversees the audit, then it recommends appointment of the external auditor and monitors compliance with the laws on financial reporting.

01:01 Paulos Nyirenda: The members of the committee have already been listed as myself, Andrew, John and Kris. In this process that we went through, we had three meetings as listed here. We met the auditor in November last year to work on a timeline for the audit and to plan the audit for the 2014. We signed a Letter of Agreement with the auditor that included fees to be paid to the auditor. We had a meeting on the 20th of May, and the main purpose was to look at the first submission from the auditor. I got into the timeline. This auditor was supposed to make the first submission on 15 May. What we got in that submission was really unsatisfactory. We got bits and pieces of the Audit Report and they came to us in random order.

02:18 Paulos Nyirenda: So as you have seen from the Board Observations, we were not satisfied with that. So we gave the auditor a new deadline of 26 May to give us a full report in order. It was complied with, but we noted that the figures in the Audit Report had changed and that the report was still marked "Draft", so the Board really couldn't sign it. So we had a new requirement for the meeting of 29 May. It was after that that we looked at the revised Financial Statements and submitted a report to the Board to consider the report. So these are the steps that we went through. In our timeline, we have 18 checkpoints, and we were following the process in the checkpoints.

03:38 Paulos Nyirenda: So just to note here that to comply with informing the community, the Board did release the very first full report that we got that was marked "Draft". Then it released the report that was produced after the 29th meeting that is still not signed, but is in an improved state. During the 29th meeting, we had a meeting with KPMG, the auditor, on WebEx because of the unsatisfactory performance. We wanted to find out what really was going on, the process they went through and that things like that.

04:33 Paulos Nyirenda: After these meetings, we determined that if performance was unsatisfactory, the board... Both on the report as well as on the process, that the auditor followed. So we made a report to the Board at its Board meeting of 1 June 2015. In that report, the unsatisfactory performance was extensively discussed and a recommendation was made that for the 2015 audit we should choose a different auditor. So we recommended to hire a different auditor and the process for the choice was discussed. This is contained in the statement that the Board has released to the community. In that process... Because the report observes that the Financial Statements were unsatisfactory, we are giving KPMG an additional time to process the current financial statements and give us a more satisfactory report.

06:13 Paulos Nyirenda: And because of their inadequate or unsatisfactory performance, we are recommending to this AGMM that we appoint Deloitte as the next auditor. And this recommendation is based on, an RFP that we run in 2014 in choosing the auditor, which I reported on in the last AGM where Deloitte was one of the top four candidates for this selection. So we are recommending to this AGMM that for the 2015 financial audit that we appoint Deloitte.

07:04 Paulos Nyirenda: In addition to that we did require an IT audit for the 2014 audit but again, the performance or reporting from KPMG was unsatisfactory. So as you see from the released statement, we are recommending that the financial auditor whom we appoint from this AGM then gives us a proposal for an IT auditor so that we can get a more satisfactory IT audit in addition to the financial audit for the 2015 financial year. Thank you. This is my report.

07:52 Sunday Folayan: Thank you very much, Paulos.

[pause]

08:00 Sunday Folayan: I guess basically items 5.1 and 5.2 are covered. What I just need to clear for one minute is whether we'd go ahead, discuss, and adopt that, or we wait for Q&A before we do that. Just give me a minute to confirm.