Audit Committee Charter

Purpose of the Audit Committee

The purpose of the Committee is to provide assistance to the board in fulfilling its corporate governance and monitoring responsibility in relation to the risks associated with the integrity of financial reporting, internal control systems and external audit functions. Broader risks as they impact on the company will become the responsibility of the committee in its function as the Audit and Risk Management Committee.

Duties and Responsibilities

The committee is specifically charged with the following duties and responsibilities:

Understanding the Business

Understanding the Group's structure, controls and types of transactions in order to adequately assess the significant and financial reporting issues faced by the Group.

Financial Reporting

To oversee the Group's financial reporting process on behalf of the board and report and make recommendations to the board in respect of that process. Specifically, this includes:

  • Liaising between the external auditor, management and the board;
  • Reviewing financial statements and any associated information prior to referral to the board and the managing director for approval;
  • Reviewing reports from the external auditor or any internal review and ensure that major deficiencies or breakdowns in controls or procedures have been identified and that appropriate and prompt action is taken by management;
  • Reviewing the external auditor's reports, management letters and de-briefing memorandums to ensure action is taken by management in respect of those reports so that there will be no significant issues raised in the external auditor's opinion; and
  • Ensuring compliance with legislative and regulatory requirements.

Assessment of Accounting, Financial and Internal Controls

The committee shall regularly assess, monitor and identify risks to the integrity of the financial reporting process. This assessment will be in conjunction with management and the external auditor or other external advisers and will include reviews of the adequacy and effectiveness of:

  • Accounting and financial internal controls;
  • Management information systems;
  • Group policies and procedures; and
  • Accounting policies or methods.

External Auditor

The committee shall be directly responsible to the board of directors for:

  • Recommendations with regard appointment, reappointment or replacement of the external auditor;
  • Recommendations with regard external auditor remuneration;
  • Monitoring the effectiveness of the external audit process; and
  • Monitoring the independence of the external auditor.

Reporting

The committee shall keep the board informed of its activities through the minutes of all of its meetings and formally advise the board of any matters or recommendations requiring attention by the board.

Membership and Meetings

Membership

  • The committee should comprise at least two non-executive directors with a majority of the members assessed by the board as being independent. Directors will be assessed as being independent if they satisfy the definition of independence contained in the ASX Corporate Governance Council's Principles of Good Corporate Governance;
  • The chairman of the committee should be an independent non-executive director;
  • A quorum shall be two committee members;
  • A representative of the external auditor will generally be present by invitation but will not be a committee member;
  • The chief financial officer will attend meetings by invitation as required by the committee;
  • Other members of the board may attend committee meetings; and
  • At least one committee member will have accounting and or related financial management experience.

Meetings

  • The committee should meet at least twice per year but as often as is required to discharge its responsibilities.
  • For each meeting, an agenda will be prepared and circulated to committee members and other directors prior to the meeting.
  • Any committee member or the external auditor may request the chairman to call a meeting. Any committee member may request any item to be included on the agenda.
  • The meetings and proceedings of the committee shall be governed by the provisions of the Constitution of the company regulating the meetings and proceedings of directors, so far as these provisions are applicable;
  • Decisions will be by majority vote, but the chairman will report any dissenting vote when reporting the decisions of the committee to the board;
  • The chairman will have a casting vote; and
  • Minutes of each meeting shall be prepared and circulated to each committee member and director and the external auditor.

Authority and Access

The Audit Committee has the authority of the board to review any aspect or activity of the company and its controlled entities.

The Committee will have direct access to both the external auditor and senior management.

The Committee is empowered to retain persons having particular skills and expertise to assist the committee in fulfilling its responsibilities.