Risk Management Policy

AUDIT & RISK MANAGEMENT COMMITTEE CHARTER

Purpose of Charter
Definition and Objective of the AHC Limited Audit and Risk Management Committee Charter
Membership
Chairman
Meetings
1. 5.1 Meetings Other than in Person
2. 5.2 Frequency of Meetings
Attendance at Meetings and Quorum
Secretary
Scope, Access and Authority
Reporting
Duties
1. 10.1 Financial and External Reporting
2. 10.2 Risk Management and Internal Control Structure
3. 10.3 External Auditor
4. 10.4 Corporate Governance and Integrity

1. PURPOSE OF CHARTER

The Audit and Risk Management Committee Charter sets out the role, composition, authority, responsibilities and operation of the Audit and Risk Management Committee of the Board of AHC Limited.

2. DEFINITION & OBJECTIVE

Definition and objective of the AHC Limited Audit and Risk Management Committee Charter.

The Audit and Risk Management Committee (otherwise know as the Committee) is a Committee of the AHC Limited Board, otherwise know as the Board.

The Committee’s primary function is to assist the Board in fulfilling its oversight responsibilities in relation to AHC limited 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;
The audit process; and
Corporate conduct and business ethics, including auditor independence and ongoing compliance with laws and regulations.

3. MEMBERSHIP

The Committee consists of a minimum of three members.

Committee members will be financially literate. It is appropriate that members of the Committee have a range of different backgrounds, skills and experiences, having regard to the operational, financial and strategic risk profile of AHC Limited, at least one member of the Committee should have financial expertise.

Committee members are appointed by the Board.

4. CHAIRMAN

The Chairman of the Committee, will be selected by the Board.

If the Chairman is absent from a meeting and no Acting Chairman has been appointed, the members of the Committee present at the meeting have authority to choose one of their numbers to be Chairman for that particular meeting.

5. MEETINGS

5.1 Meetings other than in person

The Committee may conduct meetings without all Committee members being involved in the meeting in the physical presence of one another provided that all Committee members involved in the meeting are able to participate in discussion.

5.2 Frequency of meetings

As a minimum, the Committee meets two times per annum. These meetings will be convened to discuss Audit and Risk Management Planning with the Audit and Risk Management Committee Chairman in attendance.

The timing and suggested content for each meeting is set out below:

Recommendations for the appointment of external auditors
Review the adequacy of the management information and internal control systems, including information technology controls and security.
Look at any other issues that may impact on the half year and year end financial statements before finalisation for the half yearly or annual accounts.
Review the audit scope and objectives for the external audit program and approve the audit fee
Review the auditors independence statement provided to the Board
Review the draft half yearly and yearly financial statements prior to recommending their adoption by the Board.
Review AHC Limited’s corporate governance practices and code of conduct including consideration of the Corporate Governance Statement to be included in the annual report.
Review and identify any significant business risks and exposures including an assessment of the steps management has taken to minimise such risk.
Review the status of the external audit program.

6. ATTENDANCE AT MEETINGS & QUORUM

The Chief Executive Officer will be invited to attend as required by the Audit and Risk Management Committee. Other executives or external parties may be invited to attend any meeting of the Committee.

The external Auditor will be invited to attend any meeting of the Audit and Risk Management Committee.

The quorum for a meeting is two members or any greater number determined by the Committee from time to time.

7. SECRETARY

The Secretary of the Audit and Risk Management Committee will be the Company Secretary, or such other person as nominated by the Board.

8. ACCESS & AUTHORITY

The Committee has direct and unlimited access to AHC Limited’s external auditors and the right to meet and discuss matters with the auditors in the absence of management. It has the authority to seek any information it requires to carry out its duties from any officer or employee and such officers or employees will be instructed by the Board to cooperate with any request made by the Audit and Risk Management Committee.

The Committee also has the authority to consult any independent professional adviser it considers appropriate to assist it in meeting its responsibilities.

9. REPORTING

Proceedings of the 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 Board Members. The report should include but not be limited to:

The minutes of the Committee and any formal resolutions

Information about the Audit process including auditors letters.

Any determination by the Audit and Risk Management Committee relating to the independence of the Auditor

Any other matters that in the opinion of the Audit and Risk Management Committee that should be brought to the attention of the Board.

A review of the formal written charter and its continuing adequacy.

10.DUTIES

The duties and responsibilities of the Committee are in addition to those duties set out for a Director of the Board.

Specific duties the Committee is expected to undertake in meeting its principal purpose are as follows:

10.1 Financial & External Reporting

The Committee is expected to review all Audited AHC Limited financial statements intended for publication prior to recommending their approval by the Board.

The review process includes determining that management and the external Auditors are satisfied with the contents of the financial statements and the adequacy of disclosure and that they are complete and consistent with the information known to committee members.

The Committee may:

Review the appropriateness of the company’s accounting policies and principles.
Review management process to monitor compliance with laws, regulations and other requirements relating to external reporting.
Review any significant changes in accounting policies or principles or any changes in the application of those policies or principles compared with prior years.
Review differences of opinion between management and external Auditors concerning disclosures in the financial statements.
Compare operating results with prior years and budgets, obtain explanations for significant variances.
Review accounting accruals, provisions and estimates that may have a material impact or effect on the financial statements.
Review disclosures in the financial statements that are relevant, appropriate and comply with accounting standards.
Review current and pending litigation with management or legal counsel that may have a material effect on the financial statements
Asses actual financial results for the interim period for variations from budgeted or projected results.

10.2 Risk Management & Internal Control Structure

The responsibility of the Committee in the areas of risk management and internal control is to monitor the risk management and internal control structure implemented by management and advise on significant changes to that structure so it can obtain reasonable assurance that AHC LIMITED’S assets are safeguarded and that reliable financial records are maintained.

The Committee may

Review managements processes and results in identifying, assessing and monitoring risks associated with AHC Limited’s business operations and the implementation and maintenance of policies and control procedures to give adequate protection against key risks.
Consider and assess the effectiveness of management information and other systems of internal control, including a review of the external Auditor’s reports to management on internal controls and action taken or proposed resulting from those reports.
Report to the Board a summary of the operational risks facing AHC Limited.
Evaluate managements setting the appropriate control culture by communicating the importance of internal control and the management of risk and ensuring that all employees have an understanding of their roles and responsibilities.
Review managements security of computer systems and the contingency for processing financial information in the event of systems breakdown.

10.3 External Auditor

The Committee in relation to the external Audit is to ensure that the Audit approach covers all financial statement areas where there is a risk of material misstatement and that Audit activities are carried out in an effective, efficient and comprehensive manner.

The Committee has the responsibility to ensure that the External Auditor meets the required standards for Auditor Independence.

Review any prospect of Auditor replacement and or tender suggested by management.
Make recommendations on Auditor replacement.
Consider whether the various relationships between the company and the external Auditor impairs or appears to impair the Auditors judgement or independence.

The Committee will:

Ensure that the external Auditor provides an annual declaration as to his independence.
Ensure the annual report for the financial year provides disclosure of the Auditors independence.
Ensure that the External Auditor or a representative of the Auditor attend the AGM at which the Auditors report is tabled.
Review the External Auditors terms of engagement and recommend to the Board the appointment and remuneration.
Review the Audit plan of the external Auditors Assess the performance of the external Auditors.

10.4 Corporate Governance & Integrity

The role of the Committee in relation to corporate governance is to provide assurance that AHC Limited adequately complies with applicable laws and regulations, is conducting its affairs ethically and is maintaining appropriate controls against employee conflict of interest and fraud.