Audit Committee

 

 

 

 

Orpheus Energy Ltd – Board Audit and Risk Committee

Terms of Reference

Framework

These terms of reference apply to the ORPHEUS Board Audit Committee ("the Committee").

References in this document to "the Chairman" are to the Committee Chairman and to "the Company" are to Orpheus.

 

Objectives

The primary objective of the Committee is to assist the Board of Directors ("the Board") in fulfilling its responsibilities relating to accounting, internal control systems and reporting practices of the Company. Whilst acting for the Board in respect of detailed issues it is important to note that full responsibility on all such issues rests with the Board.

 

Additional objectives of the Committee are to:

  • Oversee and appraise the quality of the audits conducted by the Company's auditors;
  • Serve as an independent and objective party to review the financial information to be presented to shareholders, regulators and the Australian Stock Exchange;
  • Determine and review the adequacy of the Company's administrative, operating and accounting controls and policies.
  • Monitor the independence of the external auditor.
  • Provide a structured reporting line for internal audit.
  • Monitor the Company's financial compliance with applicable laws and regulations.
  • Assist in the monitoring and controlling of the financial aspects of the Company's business risk.

Composition

  • The Board will appoint the members of the Committee and its Chairman.
  • The Committee will be comprised of at least two Directors.
  • The Committee members must be free from any relationships which might, in the opinion of the Board, be construed as a conflict of interest.

Meetings

  • The Committee will hold at least four regular meetings per year and such additional meetings as the Chairman decides are necessary in order to fulfill its duties.
  • The Chairman is required to call a meeting of the Committee if requested to do so by any Committee member, the Group Managing Director ("the MD") or the internal or external auditors.
  • The Committee will be responsible for appointing a Secretary.
  • The Secretary, in conjunction with the Chairman, will be responsible for drawing up the agenda and circulating it, supported by explanatory documentation, to Committee members prior to each meeting. It must be circulated in sufficient time to allow members to review the information prior to the meeting.
  • The Secretary will be responsible for keeping the minutes of meetings of the Committee, which must be signed by the Chairman.
  • The MD, internal and external auditors are expected to attend meetings, or relevant parts thereof, at the standing invitation of the Chairman.
  • Other Board members are welcome to attend meetings and should give sufficient notice to the Secretary to allow for the timely circulation of documentation.
  • A quorum shall consist of a majority of Committee members.

Reporting

  • Minutes of all Committee meetings are to be circulated to Committee members and to the other members of the Board.
  • The Committee, through its Chairman, will report to the Board:
    1. On the financial statements.
    2. Any formal resolutions made by the Committee.
    3. Information about the audit process and any material issues arising from both internal and external audit.
    4. Any significant accounting policy changes for ratification by the Board.
    5. Any material instances of fraud or breaches of internal control procedures.
    6. Other major issues of which the Committee believes the Board should be informed.

Access

  • The Committee is to have unrestricted access to both the internal and external auditors and to all levels of management and contractors within the Group.
  • The Committee will have the ability to consult independent experts at the Group's expense, where the members consider it necessary to carry out their duties. Prior approval of the Chairman is required.
  • Internal and external audit are entitled to contact the Chairman directly on audit matters.

 

Duties and Responsibilities

The main duties and responsibilities of the Committee are as follows:

 

External Reporting

  • Evaluate the adequacy and effectiveness of the Group's administrative, taxation, operating, and accounting policies, through active communication with operating management and internal and external audit.
  • Review all necessary financial reports to be made to the public prior to their release.
  • Review any regulatory policies, pronouncements, standards and reports of an accounting or finance nature submitted to the Group and monitor management's response to them.
  • Require reports from management/contractors and internal and external audit on any significant proposed regulatory, accounting or reporting issue, or any significant unusual transaction, and assess the potential impact upon the Company's financial reporting process.
  • Review the annual, half-yearly and quarterly (where required) financial statements with external audit, and recommend acceptance to the Board.