Audit Committee Terms of Reference

  1. The role of the audit committee is to assist the board of directors in the discharge of its responsibilities for financial reporting and maintaining a system of internal control.
  2. The committee is to be appointed by the main board of directors and should initially comprise all of the directors. The Company secretary is to be available as secretary to the committee.
  3. The committee is to have a direct line of communication with the external auditors of the group and is to have full and free access to management personnel.
  4. The committee is to meet at least quarterly and is to report to the board of directors after each meeting. The external auditors are to be entitled to receive notice of, and to attend all meetings of the committee. Management is to be available for discussion with the committee if required.
  5. The principal functions of the committee are:
    • to review financial information to ensure its accuracy and timeliness and the inclusion of all appropriate disclosures;
    • to ensure the existence and effective operation of accounting and financial controls;
    • to oversee the audit of the Company, including nominating auditors, approving the audit scope and examining audit findings; and
    • to provide a link between the auditors and the board.
  6. The general duties of the committee are:
    • helping to establish an environment in which controls can operate effectively;
    • overseeing management's monitoring of the organisation's systems of financial reporting and internal control to obtain early warning of system weaknesses;
    • reviewing the Company's accounting policies and reporting requirements;
    • assessing the adequacy of management reporting;
    • discussing the intended scope of the external audit and satisfying itself that no unjustified restrictions have been imposed by management;
    • recommending the appointment and remuneration of the external auditors;
    • reviewing the terms of the audit engagement;
    • inviting communication of problems from the external auditors throughout the year;
    • following up the implementation of recommendations made by the external auditors;
    • ensuring that any directors not on the committee are kept briefed;
    • ensuring that reports issued by auditors to management are being received by the board; and
    • reporting to the board on its findings.
  7. Specific responsibilities of the committee include:
    • to review all published financial statements which require approval by the board of directors prior to approval by the board. Such statements include interim statements, year-end audited financial statements, statements in prospectuses and other offering memoranda and statements required by regulatory authorities;
    • to review any report of management which accompanies published financial statements (to the extent that such a report discusses the financial position or operating results) for consistency of disclosure with the financial statements themselves, again, before approval by the board;
    • to review the audit plans of the external auditors and to review any significant recommendations by the auditors to strengthen internal controls;
    • to review the results of the external audits, any changes in accounting practices or policies and subsequent effects on the financial statements;
    • to consider any other matter which affects its recommendations to the board of directors concerning the approval of the financial statements;
    • to review the basis and amount of reports issued by the auditors; the quality of the internal controls; the size, complexity and financial condition of the Company; and
    • to ensure that there are appropriate measures and systems in place which enable the Company at all times to comply with the continuous disclosure requirements imposed by Listing Rule 3A1.

1 July 1996