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AUDIT COMMITTEE CHARTER
PURPOSE OF CHARTER
The Board has the responsibility to ensure that an
effective internal control framework exists within the governance structure
of Sipa and its wholly owned entities ("the Sipa Group"). The Board
has delegated the responsibility of establishment and maintenance of
a framework of internal control and ethical standards for the management
of the Sipa group to the Audit Committee (the "Committee"). This Charter
outlines the Committee’s primary responsibilities.
COMPOSITION AND TERM
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The Committee shall consist of a minimum of two
non-executive independent directors.
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The Chairman of the Board, and any executive
director are not eligible to be a member of the Committee.
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All members of the Committee should be financially
literate and at least one member of the Committee should have financial
expertise.
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The term of appointment as a member is for a
period of no more than one year, with Committee members generally
being eligible for re-appointment subject to the composition requirements
for the Committee.
MEETINGS
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As a minimum, the Committee
meets two times per year. These meeting times are scheduled to
coincide with the Company’s
year end accounts and half year financial report.
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In addition, the Chairman will call a meeting
of the Committee if so requested by any member of the Committee,
by the external auditor or internal auditor or by the Chairman
of the Board.
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In addition to the Committee members, the external
audit engagement partner (or their representative), the Company
Secretary and Financial Controller attend each meeting. A portion
of each meeting with be held with the external audit engagement
partner without the presence of management.
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The quorum for a meeting is two members
SCOPE, ACCESS AND AUTHORITY
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The Committee has direct access to the Sipa Group's
external auditor. It has the authority to seek any information
it requires to carry out its duties from any officer or employee
of the Sipa Group.
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The Committee has the authority to consult any
independent professional adviser it considers appropriate to assist
it in meeting its responsibilities.
REPORTING
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Proceedings of all meetings are minuted and signed
by the Chairman of the Committee meeting. Minutes of all Committee
meetings are circulated to the Board.
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The Committee, through its Chairman, reports
to the Board at the earliest possible Board meeting after each
Committee meeting.
RESPONSIBILITIES
The Committee assists the Board in discharging its
responsibility to exercise due care, diligence and skill in relation
to the Sipa Group in the following areas.
Financial and External Reporting
The Committee is expected to review all audited Sipa
Group financial statements intended for publication prior to recommending
their approval to the Board. Specifically the Committee is responsible
for:
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Reviewing and approving all
year end and interim financial statements for the Sipa Group,
including the review of
any management representations made in support of the financial
statements, and discussion of the key issues inherent in preparing
the financial statements. The review process includes determining
that management and the external auditor are satisfied with the
contents of the financial statements and the adequacy of disclosure
therein and that the reports are consistent with committee members’ information
and knowledge.
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Review the appropriateness
of the Sipa Group’s
accounting policies and principles, including any significant changes
in accounting policies or principles or any changes in the application
of those policies or principles compared with prior years,
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Review the processes used by management to monitor
and ensure compliance with laws, regulations and other requirements
relating to external reporting by the Sipa Group of financial information.
These include, but are not limited to:
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Enquiring into any significant difference of opinion between management
and the external auditor concerning disclosures in the financial
statements and how the matter was resolved, considering any material
adjustments arising from the external audit and whether the accounts
were adjusted or not.
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Examining significant accounting accruals, provisions and estimates
that may have a material impact or effect on the financial statements.
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Determining that disclosures in the financial statements are appropriate
and comply with all relevant legislation and accounting pronouncements
by obtaining such representations from management as it considers
necessary to obtain assurance regarding the major aspects of such
disclosure and comparing disclosures made in the draft financial
statements with those representations for reasonableness and accuracy.
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Enquiring into current developments likely to affect the financial
statements or financial reporting by reviewing industry developments,
new or pending accounting and legislative pronouncements, disclosure
requirements and taxation matters and proposed changes to the formats
of financial statements, as they affect both current and future
years.
Audit Activities, Audit Scope and Audit Independence
The key responsibility of the Committee in relation
to the external audit is to ensure that the audit approach covers all
financial statement areas where there is a risk of material misstatement
and that audit activities are carried out throughout the Sipa Group
in the most effective, efficient and comprehensive manner. The Committee
is responsible for ensuring that the external auditor meets the required
standards for auditor independence. Specifically the Committee is responsible
for:
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Selection and Recommendation to Board for Appointment
of External Auditor
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Ensuring that the external auditor meets the
required standards for auditor independence.
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Reviewing and approving the terms of the audit
engagement.
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Reviewing all fees paid to the external auditor
whether for audit services or for the provision of non-audit services.
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Ensuring that the external
auditor or a representative of the auditor attend the annual
general meeting at which the auditor’s
report is tabled.
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Assessing the performance of the external auditor
by discussion with management, together with the Committee's own
perceptions from its interaction with the auditor.
Risk Management and Internal Control Structure
The Committee is responsible for
overviewing management’s
application of the ASX Corporate Governance Council Guidelines in respect
of financial reporting and risk oversight. The Committee provides assurance
that the Sipa Group is adequately managing risk relating to corporate
governance and market integrity and is maintaining appropriate controls
against conflicts of interest and fraud.
Specifically the Committee is responsible for:
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Consider the annual report to the Board of the
summary of the major operational risks facing the Group
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Reviewing management's processes and results
in identifying, assessing and monitoring risks associated with
the Sipa Group business operations and the implementation and maintenance
of policies and control procedures to give adequate protection
against key risks.
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Consider any other business risks as directed
by the Board or that are not dealt with by a specific committee
of the Board.
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Considering and assessing
the appropriateness and effectiveness of management information
and other systems of
internal control, encompassing review of the external auditor’ and
internal audit’s reports to management on internal controls
(including information technology controls), and action taken or
proposed resulting from those reports.
Corporate Governance and Integrity
The Committee is responsible for
management’s
application of the ASX Corporate Governance Council Guidelines I respect
of financial reporting and risk oversight. They provide assurance that
the Sipa Group is adequately managing risk relating to corporate governance
and is maintaining appropriate controls against conflicts of interest
and fraud.
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