Objective
The Audit and Assurance Committee shall provide assistance to the Board of Directors in fulfilling its corporate governance and oversight responsibilities to the Shareholders in relation to the Corporation's risk management, regulatory compliance, legal compliance, internal control and compliance, internal and external audit functions and financial reporting.
The role and responsibilities of the Audit and Assurance Committee is set by the Board of Directors and this Charter should be read in conjunction with the Board of Directors Charter.
Authority
The Audit and Assurance Committee has delegated authority from the Board of Directors to:
- Obtain any information from employees, executives and Directors of the Corporation, and relevant external parties,
- Obtain external legal, financial or other professional assistance,
- Ensure the attendance of employees at meetings as appropriate,
- Require reports from Internal audit and/or External audit,
- Require reports from Management immediately for any suspected frauds, compliance breaches or irregularities,
- Meet with Internal and External auditors, and
- Carry out any investigation.
Membership
The Board appoints the members of the Committee which will be comprised of at least three non-executive Directors all of whom must have sufficient skills and experience to be able to contribute to the efficient operation of the Committee. At least one member of the Committee must have accounting or related financial management expertise, qualifications and experience.
The term of each Director will be determined by the Shareholders and appointment to the Committee will be determined by the Board Chairman in conjunction with the Board. The Board will consider any specific induction needs for newly appointed Committee members.
The Chairman of the Board shall not be a member of the Committee.
The Chief Financial Officer and Company Secretary will act as the Secretary.
Meetings
Frequency
The Audit and Assurance Committee is expected to meet at least four times throughout the financial year. Meetings are timed to allow consideration and review of the Risk and Operations Assurance Report, audit plans and reports, Risk Management Policies, half yearly and annual Financial Statementsof the Corporation and the consideration of any other matter that the Board may, from time to time, refer to the Committee for consideration.
The agenda for meetings of the Committee will be developed to ensure that the Committee meets its obligations as set out in this Charter.
Attendance
Directors who are not members of the Committee may attend all meetings of the Committee. The Audit Office of New South Wales and the Internal Auditor attend meetings of the Committee by invitation.
The Chief Executive and any other person requested by the Committee Chairman will attend Committee meetings. If necessary, the Internal Auditor and/or the External Auditor can request meetings with the Committee.
Meetings of the Committee can be held without representation by Management and with or without the Internal and/or External Auditor, if required by the Committee.
The Committee shall meet in private session with the Corporation's auditors at least annually however usually at each meeting of the Committee.
Quorum
A quorum of any meeting will be two members of the Committee.
Reporting
The Chief Financial Officer and Company Secretary will be responsible for the preparation of notice of meetings, agendas, papers and minutes for each meeting.
Notice of meetings, agenda and papers will be circulated to all Committee members, the Chief Executive, Internal Auditor, External Auditor and any other person directed by the Committee Chairman, in a reasonable time prior to each meeting.
The minutes of each meeting must be approved and signed by the Committee Chairman.
All minutes must be copied to members of the Committee and tabled at the Board meeting following the Board Audit and Assurance Committee meeting for the information of all Directors.
Roles and Responsibilities
Risk Management and Internal Control
The Committee advises the Board on risk management generally and is responsible for reviewing and recommending a range of critical policies that provide guidance and limits on acceptable risk management practices in a range of activities that the Corporation engages in. These critical policies go to energy trading, treasury management, and fraud risk. The specific policies are listed on Attachment A and also on the Corporation's intranet portal.
The critical and other policies are used by Management and Directors to manage and assess the system of internal compliance and control.
To meet its responsibilities, the Committee must review and seek assurance, on at least an annual basis of the following:
- The process for identifying, assessing and monitoring key risk areas.
- The existence, efficiency and effectiveness of risk management systems, including IT systems.
- Risk Management Policies and their alignment with the Corporation's material business risks including financial, operational and legal risks.
- The Chief Executive's and Chief Financial Officer's written representations to the Board that the Corporation's half yearly and annual Financial Statements present a true and fair view, in all material aspects, of the Corporation's financial condition and operational results and are in accordance with relevant Accounting Standards; and that these statements are founded on a sound system of risk management and internal compliance and control and that the system is operating effectively in all material respects in relation to financial reporting risks.
To meet its responsibilities, the Committee must review and seek assurance, on an ongoing basis:
- The overall assurance framework in relation to the Corporation's risk management and internal compliance and control system including assurance provided from internal audit, external audit and other external advisers and by internal processes and controls.
Audit
The Committee is responsible to the Board for the independent and effective internal and external audit functions and for encouraging and maintaining an effective relationship with the auditors.
To meet its responsibilities, the Committee must:
- Review the terms of engagement and recommend the appointment of the Internal Auditor and their fees.
- Review and approve the Internal Audit Charter, the annual Internal Audit Plan and ensure it has adequate and ongoing coverage of key risk areas.
- Review and approve the external auditors Client Service Plan including work scope, fees and areas for additional compliance reviews.
- Review internal and external audit reports and confirm they are responded to and acted upon by Management in an appropriate and timely manner.
- Monitor the independence of auditors.
- Require that the provision of internal audit services by external professional auditing organisations is reviewed at least every three years, and if requested by the Committee, a competitive tender process is undertaken by Management.
Financial Reporting
The Committee is responsible to the Board for reviewing, assessing and monitoring the integrity, accuracy, completeness and clarity of financial reporting by the Corporation.
The Committee will also make recommendations to the Board regarding the adoption of the half yearly Financial Statements and Operational Report and annual Financial Statements prior to their release to the Shareholders.
To meet its responsibilities, the Committee must review financial reports and assess:
- The appropriateness of the accounting policies and principles used, and their impact on the Financial Statements.
- The appropriateness of estimates and judgements made, and the process used to make them.
- The extent and quality of compliance with Corporate legislation, Accounting Standards, Tax Legislation and Shareholder Regulations.
- Accounting, legal and Shareholders' requirements, and understand their impact on the Financial Statements.
- Any information from internal and external auditors and other external assurance providers that may affect the reliability of financial reports
- Half Yearly and Annual Representations provided by the Chief Executive and Managing Director and the Chief Financial Officer and Company Secretary
- The recommendation to the Board on proposed dividends and distributions payable to the Shareholders
Performance Assessments
The Committee is responsible to the Board for ensuring an annual performance assessment of the Committee's operations, the performance of internal and external auditors and to propose improvements where considered necessary.
The Committee will review on an annual basis the adequacy of the financial management resources of the Corporation, including quantity, qualifications and structure, to ensure that accounting and reporting processes are of high quality.
Review of Charter
The Committee is responsible for ensuring the Committees Charter is reviewed on an annual basis and where required make recommendations to the Board of Directors for changes.
