Risk and Audit Committee Charter

Role of the Board Risk and Audit Committee

The Risk and Audit Committee shall assist the Board in fulfilling its responsibilities for corporate governance and overseeing the company's;

  • financial reporting;
  • internal control structure;
  • risk management systems and reporting; and
  • internal and external audit functions.

In doing so, the Committee has the responsibility to maintain free and open communication with the external auditor, internal auditor and management of the Company.

The Committee is empowered to investigate any matter, with full access to all books, records, company operations and people of the Company and the authority to engage independent counsel and other advisers as it determines necessary to carry out its duties.

Membership

The Committee shall be members of, and appointed by, the Board of Directors and shall comprise at least three non-executive directors who are independent of management and the company.All Committee members shall be financially literate. One member, who does not chair the Board, shall be appointed to chair the Risk and Audit Committee. At least one member shall have accounting and/or related financial management expertise as determined by the Board. All Committee members shall have a reasonable understanding of the industries in which the Company participates.

Meetings

The Committee shall meet at least four times annually. It is to meet, in separate sessions, each of the Chief Financial Officer, external auditor and internal auditor at least once each year and at other times when considered appropriate.

The Managing Director, Chief Financial Officer, Internal Audit Manager and the Partner in charge of the external audit will be routinely invited to attend meetings of the Committee –unless the Chair of the Committee decides otherwise. Other senior managers may be asked to attend when the Committee is reviewing specific agenda items.

Committee papers are distributed to all Board members. Minutes of Committee meetings are included in the papers for the next full Board meeting, and a report is provided to the Board on matters addressed by the Committee. There is an open invitation for all other non-executive directors to attend Risk and Audit Committee meetings. All directors are required to attend Risk & Audit Committee meetings that consider the half year and full year financials.

Duties and Responsibilities

The primary responsibility of the Committee is to report to the Board and provide appropriate advice and recommendations on matters relevant to this charter in order to facilitate decision-making by the Board.

The Committee shall ensure it understands the company's structure, controls and types of transactions in order to adequately assess the risks faced by the Company.

Statutory and Governance Reporting

After review with management and the external auditor, the Committee will recommend to the Board the financial statements and reports intended for publication for approval including:

  • Annual directors' report and consolidated financial statements;
  • Preliminary final report to be filed with the ASX;
  • Half-year consolidated financial statements; and
  • Half-year report to be filed with the ASX.

The Committee shall review all representation letters signed by management to ensure that all relevant matters are addressed.

The Committee shall review the results of the half-year review and full year audit and any other matters required to be communicated to the Committee by the external auditor under generally accepted auditing standards. This will include significant financial reporting issues and judgments made in connection with the preparation of the Group's financial statements.

The Committee will assess the impact of changes in accounting standards and review recommendations for adoption of such changes in the financial accounts.

The Chair of the Committee may represent the entire Committee in reporting to the Board.

Internal Controls and Risk Management

The Committee shall at least annually review the adequacy and effectiveness of:

  • the Company's policies and procedures to assess, monitor and manage financial and non-financial business risks;
  • internal compliance and control systems, including the accounting and financial controls;
  • legal and ethical compliance programs (including the Company's code of business conduct and ethics); and
  • the group's insurance coverage.

The Committee shall periodically meet separately with management, the internal auditor and the external auditor to discuss issues and concerns warranting Committee attention, including but not limited to their assessment of the effectiveness of internal controls and the process for improvement.

The Committee shall receive regular reports from the external auditor on changes to accounting standards that may affect the Company on the critically important accounting policies and practices of the Company, and all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management.

External Audit

The Committee shall be directly responsible for making recommendations to the Board on the appointment, re-appointment or replacement (subject to shareholder ratification), remuneration, monitoring of the effectiveness and independence of the external auditor.

The external audit firm partner in charge of the CSR audit, and any individuals playing a significant role in the audit, must be rotated every five years in accordance with the Corporations Act.

The Committee shall pre-approve all audit and non-audit services provided by the external auditor and shall not engage the external auditor to perform any non-audit or assurance services that may impair or appear to impair the external auditor's judgement or independence in respect of the company. The Committee may delegate pre-approval authority to a member of the Committee.

The Committee shall advise the Board on statements to be made in the Directors' report regarding non-audit services in accordance with the Corporations Act.

At least once a year, the Committee shall obtain and review a report by the external auditor describing:

  • the overall scope of the external audit, including risk areas identified and any additional agreed procedures;
  • the audit firm's internal quality control procedures;
  • any material issues raised by the most recent internal quality control review, or peer review, of the audit firm; or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues, should any such incidents arise; and
  • all relationships between the external auditor and the Company (to assess the auditor's independence). For the half-year and full-year accounts, the external auditor is required to confirm in writing its independence as auditor within the meaning of relevant legislation in Australia and New Zealand and the standards set by the relevant accounting bodies.

The Committee will make its recommendation to the Board on the appointment of the external auditor based on it being satisfied that the auditor will provide sound and professional audit services in accordance with the above review.

Internal Audit and Communication

The Committee shall recommend to the Board the appointment and dismissal of the internal audit manager. The internal audit manager shall be independent of the external auditor.

The Committee shall review the scope of the internal audit plan with the internal auditor, including the work program and quality control procedures.

The Committee shall review the performance and objectivity of the internal audit function.

The Committee shall establish procedures for dealing with complaints received by the Company (including receipt, retention, and effective treatment of these complaints) regarding accounting, internal accounting controls, or auditing matters, and submission by employees of the Company, including anonymous submissions, of concerns regarding questionable accounting or auditing matters. All such employee submissions shall be treated as confidential. The Committee shall receive corporate legal reports of evidence of any material violation of the Corporations Act, the ASX Listing Rules or breaches of fiduciary duty.

Committee Performance

The Committee shall make an evaluation of its performance at least once every two years to determine whether it is functioning effectively by reference to current best practice.

Reviewed and updated: 30 March 2016