Audit and Compliance Policy
AUDIT COMMITTEE CHARTER
Constitution
The Board has resolved that given the size and scale of operations of the Company, the full Board will undertake the role of the Audit Committee. The Board has adopted this Audit Committee Charter which represents the duties required to be undertaken by the whole Board in their role as otherwise performed by an audit committee.
Membership
The Audit Committee will consist of not less than three members. Members will be appointed by the Board from amongst the Board memebers, a majority of whom will also be independent. In addition, the Audit Committee will comprise:
- members who can all read and understand financial statements and are otherwise financially literate;
- at least one member with financial expertise either as a qualified
- accountant or other financial professional with experience in financial and accounting matters; and
- at least one member who has an understanding of the industry in which the Company operates.
Chairman
The Audit Committee will appoint an independent Director, other than the Managing Director of the Board, to be the Chairman of the Committee.
Secretary
The Company Secretary will be the Secretary of the Audit Committee.
Other Attendees
The Managing Director as well as other members of senior management may be invited to be present for all or part of the meetings of the Audit Committee, but will not be members of the Committee.
Representatives of the external auditor are expected to attend each meeting of the Audit Committee and at least once a year the Committee shall meet with the external auditors without any management staff or executives present.
Quorum
A quorum will be two members.
Meetings
Audit Committee meetings will be held not less than two times a year so as to enable the Committee to undertake its role effectively. In addition, the Chairman of the Audit Committee is required to call a meeting of the Audit Committee if requested to do so by any member of the Audit Committee, the Managing Director, or the external auditor.
Authority
The Audit Committee is authorised by the Board to investigate any activity within its charter. The Audit Committee will have access to management and auditors with or without management present and has rights to seek explanations and additional information. It is authorised to seek any information it requires from any employees and all employees are directed to cooperate with any request made by the Audit Committee.
The Audit Committee is authorised by the Board to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary. The Audit Committee is required to make recommendations to the Board on all matters within the Audit Committee's charter.
Reporting Procedures
The Audit Committee will keep minutes of its meetings. The Secretary shall circulate the minutes of the meetings of the Committee to all members of the Committee for comment and change before being signed by the Chairman of the Audit Committee and circulated to the Board with the Board papers for the next Board meeting. The minutes are to be tabled at the Board meeting following the Audit Committee meeting along with any recommendations of the Committee.
Responsibilities of the Audit Committee
The Audit Committee is responsible for reviewing the integrity of the Company's financial reporting and overseeing the independence of the external auditors. In particular, the Audit Committee has the following duties: Accounting Practices and External Reporting
Financial Statements
1. To review the audited annual and half yearly financial statements and any reports which accompany published financial statements before submission to the Board, recommending their approval, focusing particularly on:
- any changes in accounting policies and practices;
- major judgmental areas;
- significant adjustments, accounting and financial reporting issues
resulting from the internal and external audit; - compliance with accounting policies and standards; and
- compliance with legal requirements.
2. To review the evaluation by management of factors related to the
independence of the Company's public accountant and to assist them
in the preservation of such independence.
3. To oversee management's appointment of the company's public
accountant.
Related Party Transactions
4. To monitor and review the propriety of any related party transactions.
External Audit Function
5. To recommend to the Board the appointment of the external auditor.
6. Each year, to review the appointment of the external auditor, their
independence, the audit fee, and any questions of resignation or
dismissal.
7. To discuss with the external auditor before the audit commences the
nature and scope of the audit,
8. To meet privately with the external auditor on at least an annual basis.
9. To determine that no management restrictions are being placed upon
external auditor.
10. To discuss problems and reservations arising from the interim and final
audits, and any matters the auditors may wish to discuss (in the
absence of management where necessary).
11. To review the external auditor's management letter and management's
response.
12. To review any regulatory reports on the Company's operations and
management's response.
Communication
13. Providing, through regular meetings, a forum for communication
between the Board, senior financial management, staff involved in
internal control procedures and the external auditors.
14. Enhancing the credibility and objectivity of financial reports with other
interested parties, including creditors, key stakeholders and the general
public.
15. Establishing procedures for complaints and reports regarding
accounting, internal accounting controls and auditing matters and
ensuring a mechanism for the confidential treatment of such complaints
and reports including the ability to submit them anonymously.
Assessment of Effectiveness
16. To evaluate the adequacy and effectiveness of the Company's
administrative, operating and accounting policies through active
communication with operating management and the external auditors.
Oversight of the Risk Management System
17. To oversee the establishment and implementation by management of a
system for identifying, assessing, monitoring and managing material
risk throughout the company. This system will include the Company's
internal compliance and control systems.