1. OVERALL PURPOSE / OBJECTIVES
The Audit & Risk Management Committee will assist the Board in fulfilling its overseer responsibilities. The Committee will review the financial reporting process, the system of internal control and management of financial risks, the audit process, the Company’s overall risk management program, and the Company’s process for monitoring compliance with laws and regulations and its own code of business conduct. In performing its duties, the Committee will maintain effective working relationships with the Board of Directors, management, and the external auditors.
The Committee monitors the adequacy of the internal controls, accounting policies, financial reporting, compliance with statutory financial requirements and selection and appointment of external auditors. The Committee reviews the Company’s annual accounts and interim reports prior to their submission for approval by the full Board.
The external auditors attend Committee meetings by invitation. They are also in attendance at the Company’s Annual General Meeting. The performance of the external auditors is reviewed periodically.
The Board authorises the Audit & Risk Management Committee, within the scope of its responsibilities, to:
[a.] Seek any information it requires from:
(i) any employee;
(ii) external parties.
[b.] Obtain outside legal or other professional advice;
[c.] Direct employees to answer questions or attend its meeting, where necessary.
[a.] The Audit & Risk Management Committee shall comprise three members with reasonable knowledge of the Company’s business and operations and its risks and controls.
[b.] The Committee shall be chaired by an independent non-executive director with the appropriate financial qualifications and skills.
[c.] Other members must be able to read and understand financial statements.
[d.] Any other non-executive director not in the Committee is welcomed to attend the Committee’s meetings.
[e.] A quorum for any meeting shall be two members.
[f.] The secretary of the Committee shall be the Company Secretary, or such other person as nominated by the Board.
3.2 Attendance at Meetings
[a.] The Audit & Risk Management Committee may invite such other persons (e.g. the CFO) to its meetings, as it deems necessary.
[b.] The external auditors should be invited to make presentations to the Audit & Risk Management Committee as appropriate.
[c.] Meetings shall be held not less than two times a year. Special meetings may be convened as required. The external auditors may convene a meeting if they consider that it is necessary.
[d.] The proceedings of all meetings shall be minuted.
4. ROLES AND RESPONSIBILITIES
4.1 Internal Control
[a.] Evaluate whether management is setting the appropriate “control culture” by communicating the importance of internal control and the management of risk.
[b.] Gain an understanding of whether internal control recommendations made by external auditors have been implemented by management.
4.2 Financial Reporting
(i.) Gain an understanding of the current areas of greatest financial risk and how management is managing these effectively.
(ii.) Consider with the external auditors any fraud, illegal acts, deficiencies in internal control or other similar issues.
(iii.) Review significant accounting and reporting issues.
(iv.) Ask management and the external auditors about significant risks and exposures and the plans to minimise such risks.
(v.) Review any legal matters which could significantly impact the financial statements.
[b] Annual Financial Statements
(i.) Review the annual financial statements and determine whether they are complete and consistent with the information known to Committee members; assess whether the financial statements reflect appropriate accounting principles.
(ii.) Pay particular attention to complex and/or unusual transactions such as restructuring charges and derivative disclosures.
(iii.) Meet with management and the external auditors to review the financial statements and the results of the audit.
(iv.) Review the other sections of the Annual Report before its release and consider whether the information is understandable and consistent with members’ knowledge about the Company and its operations.
[c.] Preliminary Announcements, Interim Financial Statements and Analysts’ Briefings
(i.) Be briefed on how management develops preliminary announcements, interim financial information and analysts’ briefings.
(ii.) Assess the fairness of the preliminary and interim statements and disclosures, and obtain appropriate explanations from management and external auditors on issues such as application of generally accepted accounting principles, significant or unusual events or transactions and the effectiveness of financial and operating controls.
4.3 External Audit
[a.] Review the external auditors’ proposed audit scope and approach and ensure no unjustified restrictions or limitations have been placed on the scope.
[b.] Review the performance of the external auditors.
[c.] Consider the independence of the external auditor, including reviewing the range of services provided in the context of all consulting services bought by the Company.
[d.] Make recommendations to the Board regarding the reappointment of the external auditors.
[e.] Meet separately with the external auditors to discuss any matters that the Committee or auditors believe should be discussed privately.
[f.] Ensure that significant findings and recommendations made by the external auditors are received and discussed on a timely basis.
[g.] Ensure that management responds to recommendations by the external auditors.
4.4 Compliance with Laws and Regulations
[a.] Review the effectiveness of the system for monitoring compliance with laws and regulations and the results of management’s investigation and follow-up (including disciplinary action) of any fraudulent acts or non-compliance.
[b.] Obtain regular updates from management regarding compliance.
[c.] Be satisfied that regulatory compliance matters have been considered in the preparation of the financial statements.
[d.] Review the findings of any examinations by regulatory agencies.
4.5 Compliance with the Company’s Policies
[a.] Ensure that arrangements are made for directors and employees to be aware of the Company’s Code of Conduct and other policies.
[b.] Obtain regular updates from management regarding compliance.
4.6 Reporting Responsibilities
[a.] Regularly update the Board about Committee activities and make appropriate recommendations.
[b.] Ensure the Board is aware of matters which may significantly impact the financial condition or affairs of the business.
4.7 Other Responsibilities
[a.] Perform other overseer functions as requested by the full Board.
[b.] If necessary, institute special investigations and, if appropriate, hire special counsel or experts to assist.
[c.] Review and update the charter; receive approval of changes from the Board.
[d.] Evaluate the Committee’s own performance on a regular basis.
4.8 Internal Audit
Due to the size of the Company, there is no internal audit function. Instead it has an Internal Control & Procedures handbook that regulates its practices. These procedures are approved by the Board.
As at 25 Sept 2019