Audit & Risk Management Committee Charter

Audit & Risk Management Committee Charter

Aguia Resources Ltd ABN 94 128 256 888 – Audit and Risk Management Committee Charter

Committee was established on 11 June 2014.

1. Committee Members

1.1 The Board has established an Audit and Risk Management Committee.

The Audit and Risk Management Committee is to consist of the following:

  1. only non-executive directors;
  2. a majority of independent directors;
  3. an independent chairperson who is not the chair of the Board; and
  4. three members.

Where there are not three or more non-executive directors of the Company, the Board may appoint executive directors to the Committee.

1.2 Each member of the Audit and Risk Management Committee is to be financially literate. Between them, the members of the Committee are to have accounting or related financial expertise, technical knowledge and a sufficient understanding of the industry in which the Company operates to be able to discharge the Committee’s mandate effectively.

1.3 The initial members of the Audit and Risk Management Committee are:

  1. Brian Moller
  2. David Gower
  3. Alec Pismiris

1.4 The company secretary and representatives of the auditors may be invited to attend the Audit and Risk Management Committee from time to time.

2. Purpose

2.1 The Audit and Risk Management Committee Charter (Charter) sets out the role, responsibilities, composition, authority and membership requirements of the Audit and Risk Management Committee of the Company.

2.2 The Charter will be made available on the Company’s website.

3. Definition and objectives of the Committee

3.1 The Audit and Risk Management Committee (Committee) is a Committee of the Board.

3.2 The Committee’s primary function is to assist the Board in discharging its responsibility to exercise due care, diligence and skill in relation to the Company by:

Audit related

  1. ensuring that the quality of financial controls is appropriate for the business of the Company;
  2. reviewing the scope and results of external and internal audits;
  3. monitoring corporate conduct and business ethics, including auditor independence and ongoing compliance with laws and regulations;
  4. maintaining open lines of communication between the Board, Management and the external auditors, thus enabling information and points of view to be freely exchanged;
  5. reviewing matters of significance affecting the financial welfare of the Company;
  6. ensuring that systems of accounting and reporting of financial information to shareholders, regulators and the general public are adequate;
  7. considering whether the Company’s financial statements reflect the understanding of the Committee members of, and otherwise provide a true and fair view of, the financial position and performance of the Company;
  8. considering the appropriateness of the accounting judgements or choices exercised by management in preparing the Company’s financial statements;
  9. reviewing the Company’s internal financial control system;
  10. considering the appointment or removal of the external auditor, the rotation of the external audit partner and approving the remuneration and terms of engagement of the external auditor;
  11. monitoring and reviewing the external auditor’s independence, objectivity and performance, taking into consideration relevant professional and regulatory requirements;
  12. developing and implementing policy on the engagement of the external auditor to supply non-audit services, taking into account relevant ethical guidance regarding the provisions of non-audit services by the external audit firm;

Risk related

  1. ensuring the development of an appropriate risk management policy framework that will provide guidance to Management in implementing appropriate risk management practices throughout the Company’s operations, practices and systems;
  2. defining and periodically reviewing risk management as it applies to the Company and clearly identify all stakeholders;
  3. ensuring the Committee clearly communicates the Company’s risk appetite (as set by the Board), policies and strategies to Management, employees, contractors and appropriate stakeholders;
  4. ensuring that Directors and Management establish a risk aware culture which reflects the Company’s risk policies and appetite;
  5. reviewing methods of identifying broad areas of risk and setting parameters or guidelines for business risk reviews;
  6. considering the processes the Company will employ for evaluating and continually improving the effectiveness of its risk management and internal control processes;
  7. considering capital raising, treasury and market trading activities with particular emphasis on risk treatment strategies, products and levels of authorities;
  8. considering whether the Company has any material exposure to economic, environmental and social sustainability risks and if it does, how the Company manages those risks;
  9. reviewing any incident involving fraud or other breakdown of the Company’s internal controls; and
  10. reviewing the Company’s insurance program, having regard to the Company’s business and the insurable risks associated with its business.

4. Reporting

4.1 Proceedings of all meetings are minuted and signed by the Chairperson.

4.2 The Committee, through its Chairperson, is to report to the Board at the earliest possible Board meeting after each Committee meeting. Minutes of all Committee meetings are to be circulated to the Board. The report should include but is not limited to:

  1. the minutes of the Committee and any formal resolutions;
  2. information about the audit process including the results of internal and external audits;
  3. an assessment of:
    1. whether external reporting is consistent with Committee members’ information and knowledge and is adequate for shareholder needs; and
    2. the management processes supporting external reporting;
  4. procedures for the selection and appointment of the external auditor and for the rotation of external audit partners;
  5. recommendations for the appointment or removal of an auditor;
  6. any determination by the Committee relating to the independence of the external auditor and whether the Committee is satisfied that independence of this function has been maintained having regard to the provision of non-audit services;
  7. assessment of the performance and objectivity of the internal audit function;
  8. results of its review of risk management and internal compliance and control systems;
  9. any matters that in the opinion of the Committee should be brought to the attention of the Board and any recommendations requiring Board approval or action; and
  10. at least annually, a review of the formal written Charter and its continuing adequacy, and an evaluation of the extent to which the Committee has met the requirements of the Charter.

5. Risk management policies

The Committee will ensure that the necessary controls are in place for risk management policies to be maintained by:

  1. devising a means of analysing the effectiveness of risk management and internal compliance and control system and of the effectiveness of their implementation; and
  2. reviewing, at least annually, the effectiveness of the Company’s risk management system.

6. Attendance at meetings

6.1 Other directors (executive and non-executive) have a right of attendance at meetings. However, no director is entitled to attend that part of a meeting at which an act or omission of that director or a contract, arrangement or undertaking involving or potentially involving that director or a related party of that director is being investigated or discussed.

6.2 Notwithstanding clause 6.1, if in the opinion of the Committee, its investigation or discussion will be assisted by hearing from the interested director, the Committee may invite that director to address the Committee. The Committee will give fair consideration to that address. The director will not, however, be invited to take part in the deliberations following that address.

7. Access

7.1 The Committee shall have unlimited access to the external and internal auditors, and to senior management of the Company and any subsidiary. The Committee shall also have the ability and authority to seek any information it requires to carry out its duties from any officer of employee of the Company and such officers or employees shall be instructed by the Board to co-operate fully in provision of such information.

7.2 The Committee also has the authority to consult independent experts where they consider it necessary to carry out their duties. Any costs incurred as a result of the Committee consulting an independent expert will be borne by the Company.

8. Proceedings of the Committee

The provisions of the Company’s Constitution which govern proceedings of committee meetings are deemed to be incorporated into this Charter. Where there is a conflict between this Charter and the Constitution, the Constitution will prevail.