Audit and Risk Management Committee Charter
1. Committee of the Board
The Audit and Risk Management Committee ("the Committee") is a Committee of the Board, with the specific powers delegated as set out in this Charter in accordance with rule 8.1 of the Company's constitution.
1.2 Purpose of the Committee
The purpose of the Committee is to assist the Board in the effective discharge of its responsibilities for financial reporting, internal controls, risk management, and external audit. The Committee does not relieve any Directors of their responsibilities for these matters.
1.3 Functions of the Committee
The Committee:
(a) Is not required to personally conduct accounting reviews or audits and
(b) Is entitled to rely on employees of the Company or professional advisers or consultants engaged by the Committee or the Company where:
(i) There are reasonable grounds to believe that the employee, adviser or consultant is reliable and competent and
(ii) The reliance was made in good faith and after making an independent assessment of the information
2. Composition
Membership
• The Committee shall consist of at least three members
• The Committee must consist of a majority of non-executive Directors
• The Committee shall collectively have financial expertise and an understanding of the industry in which the Company operates
• All members must be able to read and understand financial statements
• A member of the Committee may, with the approval of the Committee Chairman and at the Company's expense, attend seminars or training courses in respect to issues related to the functions and responsibilities of the Committee
Chairman
The Chairman of the Committee will be an independent Director, provided that the Chairman of the Board, if a member of the Committee, cannot be the Committee Chairman.
Details of the members of the Committee and the status of their independence are disclosed in the Corporate Governance Statement or Directors’ report in the Annual Report.
3. Powers of the Committee
3.1 Access to management and auditor
The Committee, in performing its functions, may:
(a) direct any of the following to attend a meeting of the Committee:
The external auditor
Any employee of the Company; and
(b) To the extent permitted by law, access any document, report, material or information in the possession of an employee or external adviser of the Company
3.2 Access to independent advice
The Committee may obtain independent professional advice to assist it in the proper exercise of its powers and responsibilities, with the cost to be borne by the Company.
4. Committee Responsibilities
• Review and report to the Board on the annual and half year report and financial statements
• Review the accounting policies of the consolidated entity
• Review the effectiveness of the control environment including risk management, safe practices policies, environmental policies and policies in respect to the disbursement of funds
• Review the adequacy of information provided by management to the Board of Directors
• Review the compliance with statutory and regulatory requirements
• Review the annual budget and report accordingly to the Board of Directors
• Review Risk Management information prepared by management and the annual and half yearly risk management reports
5. External Audit
The Committee shall review and assess key areas relating to the external audit of the company. In particular the Committee shall:
• Make recommendations to the Board on the appointment, reappointment or replacement and remuneration of the external auditor
• Review and agree with the external auditor the terms of engagement for the external auditor
• Monitor the effectiveness and independence of the external auditor
• Review the scope of the external audit with the external auditor including identified risk areas
• Review and assess provision of non-audit services by the external auditor, with particular consideration to the potential to impair, or appear to impair, the external auditor’s judgment or independence in respect of the Company
• On a regular basis meet with the external auditor without the presence of management
In fulfilling its responsibilities the Committee meets with the external auditors at least twice a year, more frequently if necessary. The company’s auditors have a clear line of direct communication at any time to either the Chairman of the Audit and Risk Management Committee or the Chairman of the Board.
6. Meetings
Holding of meetings
(a) Subject to paragraph (b), the Committee shall meet regularly, at the times determined by the Committee Chairman, but nevertheless shall meet at least two times a year
(b) A member of the Committee may request that a meeting of the Committee be convened
Attendance at meetings
(a) Unless otherwise notified by the Committee Chairman, the following may attend a meeting of the Committee:
• Any Director
• The Managing Director / Chief Executive Officer
• The Chief Financial Officer
• The external Auditor
(b) The Committee Chairman may invite any of the following to attend a meeting of the Committee:
• A Company officer and
• A party external to the Company
Committee Minutes
The Committee Secretary shall prepare minutes of meetings and have them approved by the Committee Chairman.
Minutes of meetings shall be confirmed at the next meeting of the Committee.
7. Performance Evaluation
The Committee must prepare a report on an annual basis comprising an appraisal of the main items dealt with during the year and a performance evaluation against the Committee’s stated objectives. Where necessary, recommendations to improve the performance of the Committee should be made. This report is to be signed by the Committee chairman and forwarded to the Chairman of the Board.
8. Reporting to the Board
Minutes of each meeting and any related papers necessary for the Board to understand proceedings held at the meetings, shall be submitted to the Board.
The Committee Chairman, or delegate, must report to the Board after each Committee meeting concerning:
• The proceedings of the Committee and
• All matters relevant to the Committee's role and responsibilities
9. Procedures for the Selection and Appointment of the External Auditor
• The Committee will establish key criteria for the appointment of the auditor, including audit approach and methodology, internal governance processes, technical resources, key personnel, independence and cost
• Input will generally be sought from senior management with respect to any appointment
• The Committee will provide the Board with the recommendation for the external auditor and the reasons
10. Rotation of External Audit Engagement Partners
The Audit & Risk Management Committee ensures that the external audit firm rotates its audit engagement partner and audit review partner in accordance with accepted best practice.