Audit Committee Charter
1. Purpose of Charter
The Audit Committee Charter sets out the role, composition, authority, responsibilities and operation of the Audit Committee of the Board of Petsec Energy Ltd (Petsec or Company) within the governance structure of Petsec Energy Ltd and all controlled entities (Group).
The Charter is reproduced on the Company’s website.
2. Definition and Objectives of the Petsec Audit Committee
The Audit Committee (Committee) is a committee of the Petsec Board (Board).
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 Group in the areas of:
- application of accounting policy and reporting of financial information to shareholders, regulators and the general public;
- business risk management and internal control systems, including business policies and practices; and
- corporate conduct and business ethics, including Auditor Independence and ongoing compliance with laws and regulations.
3. Membership and Term
The Committee consists of a minimum of two Directors of the Board. The majority of Committee members must be independent, non-executive Directors.
Committee members will have a working familiarity with basic finance and accounting practices. At least one member of the Committee should have accounting or related financial management expertise.
Committee members are appointed by the Board for a period of one year and may be reappointed annually provided they are eligible. The effect of ceasing to be a Director of the Board is the automatic termination of appointment as a member of the Committee.
The Chairman of the Committee (Chairman), a non-executive Director other than the Chairman of the Board, is selected by the Board.
Frequency of Meetings
As a minimum, the Committee meets three times per annum. The three mandated meetings are:
- review of the audit scope for the year and approval of the annual letter of engagement of the auditors;
- review of the half year financials and half year audit;
- review of the full year financials and full year audit.
In addition, the Chairman will call a meeting of the Committee if so requested by any member of the Committee, by the auditors, by the Chairman of the Board or in the event that a concern is brought to the attention of the Chairman or another Committee member by an employee or other person (confidentially, anonymously or otherwise) about the accounting, internal control or auditing procedures of the Group.
6. Audit Committee Responsibilities
6.1 External Audit
- Consider and recommend the appointment of the auditor.
- Review the audit scope and objectives for the audit programme for the ensuing year and approve the associated audit fee.
- Review the nature of non-audit services provided by the auditor and related fees.
- Review the auditor’s independence statement provided by the auditors.
- Review the results and findings of the half year review and full year audit.
6.2 Management Reporting, Internal Controls, Corporate Compliance & Risk Management
- Monitor and review the adequacy of the management information and internal control systems.
- Monitor the Group’s corporate compliance to ensure it meets its statutory obligations, including continuous disclosure requirements.
- Review and monitor the scope and objectives of management of risk by the Group, including insurance and business continuity plans and environmental risk management.
6.3 External Financial Reporting
- Review the draft half yearly financial statements prior to recommending their adoption by the Board.
- Review the draft year end financial statements prior to recommending their adoption by the Board.
6.4 Corporate Governance and Integrity
- Review the Group’s corporate governance policies and practices.
- Review any reports from employees or others relating to questionable accounting or auditing matters.
- Review and make recommendations to the Board concerning any proposed changes to the Audit Committee Charter.
7. Attendance at Meetings and Quorum
Other Board Directors (executive and non-executive) have a right of attendance at meetings.
The Managing Director, the Chief Financial Officer, and Company Secretary are expected to attend each meeting of the Committee. Other Petsec executives and/or parties external to Petsec may be invited to attend any meeting of the Committee.
The audit engagement partner should attend any meeting of the Audit Committee.
The quorum for a meeting is two members.
The Company Secretary or other appropriate executive acts as Secretary of the Committee.
9. Access & Authority
The Committee has direct access to the Group’s auditors and has the authority to seek any information it requires to carry out its duties from any officer or employee of any entity of the Group.
The Committee also has the authority to consult, at Petsec’s expense, any independent professional adviser it considers appropriate.
Proceedings of all meetings are minuted and signed by the Chairman.
The Committee, through its Chairman, reports to the Board at the earliest possible Board Meeting after each Committee meeting. Minutes of all Committee meetings are circulated to the Directors.
Committee members are entitled to receive remuneration as determined from time to time by the Petsec Nomination and Remuneration Committee.