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  Corporate Governance Report  
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Matters reserved for the board
Internal Audit Charter

Board and Management
 
 
 

Audit Committee

Terms of Reference
1.
Membership
1.1
Members of the Audit Committee (the “Committee”) shall be appointed by the Board from amongst the Non-Executive and Independent Directors of the Board, a majority of whom should be independent and shall consist of not less than three members.  A quorum shall be two members.
1.2
The Chairman of the Committee (the “Chairman”) shall be appointed directly by the Board.
2.
Attendance at meetings
2.1
The Chief Financial Officer and a representative of the external auditors shall normally attend meetings. Other Board members shall also have the right of attendance. At least once a year the Committee shall meet with external auditors without the presence of Executive Board members.
3.
Any member of the Committee appointed by the Chairman shall be the secretary of the Committee.
4.
Audit Committee meetings should follow an agenda to impose form and discipline and to help the Audit Committee Chairman to control the meetings.
Frequency of meetings
5.
Meeting shall be held not less than twice a year (i.e. before and after year-end audit). The external auditors may request additional meetings if necessary.
Authority
6.
The Committee is authorized by the Board to investigate any activity within the terms of reference set out herein. It is authorized to seek any information it requires from any employee and all employees are directed to co-operate with any request by the Committee.
7.
The Committee is authorized by the Board to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience if it considers this necessary.
Duties
8.
The duties of the Committee shall be:
Relationship with the auditors
8.1
to be primarily responsible for making recommendation to the board on the appointment, reappointment and removal of the external auditor, and to approve the remuneration and terms of engagement of the external auditor, and any questions of resignation or dismissal of that auditor;
8.2
to review and monitor the external auditor’s independence and objectivity and the effectiveness of the audit process in accordance with applicable standard. The audit committee should discuss with the auditor the nature and scope of the audit and reporting obligations before the audit commences;
8.3
to develop and implement policy on the engagement of an external auditor to supply non-audit services. For this purpose, external auditor shall include any entity that is under common control, ownership or management with the audit firm or any entity that a reasonable and informed third party having knowledge of all relevant information would reasonably conclude as part of the audit firm nationally or internationally. The audit committee should report to the board, identifying any matters in respect of which it considers that action or improvement is needed and making recommendations as to the steps to be taken;
Review of financial information
8.4
to monitor integrity of financial statements and the annual report and accounts, half-year report and, if prepared for publication, quarterly reports, and to review significant financial reporting judgments contained in them. In this regard, in reviewing the annual report and accounts, half-year report and, if prepared for publication, quarterly reports before submission to the board, the committee should focus particularly on:-
8.4.1
any changes in accounting policies and practices;
8.4.2
major judgmental areas;
8.4.3
significant adjustments resulting from audit;
8.4.4
the going concern assumptions and any qualifications;
8.4.5
compliance with accounting standards; and
8.4.6
compliance with the Exchange Listing Rules and other legal requirements in relation to financial reporting;
8.5
In regard to item 8.4 above:-
8.5.1
members of the committee must liaise with the board of directors and senior management and the committee must meet, at least once a year, with the auditors; and
8.5.2
the committee should consider any significant or unusual items that are, or may need to be, reflected in such reports and accounts and must give due consideration to any matters that have been raised by the Company’s staff responsible for the accounting and financial reporting function, compliance officer or auditors;
Oversight of the financial reporting system and internal control procedures
8.6
to review the financial controls, internal control and risk management systems;
8.7
to discuss with the management the system of internal control and ensure that management has discharged its duty to have an effective internal control system including the adequacy of resources, qualifications and experience of staff of the Company’s accounting and financial reporting function, and their training programmes and budget;
8.8
to consider any findings of major investigations of internal control matters as delegated by the board or on its own initiative and management’s response;
8.9
where an internal audit function exists, to ensure co-ordination between the internal and external auditors, and to ensure that the internal audit function is adequately resourced and has appropriate standing within the group, and to review and monitor the effectiveness of the internal audit function;
8.10
to review the group’s financial and accounting policies and practices;
8.11
to review the external auditor’s management letter, any material queries raised by the auditor to management in respect of the accounting records, financial accounts or systems of control and management’s response;
8.12
to ensure that the board will provide a timely response to the issues raised in the external auditor’s management letter;
8.13
to report to the board on the matters set out above; and
8.14
to consider other topics, as defined by the board.
Reporting Procedures
9.
The secretary of each Committee meeting shall circulate the minutes of meetings of the Committee to all members of the Board. The Audit Committee Chairman prior to their circulation should formally approve minutes.
 
 
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