Audit Compliance & Risk Assurance Committee Charter
1. Objectives
1.1 The Audit and Compliance Committee (“the Committee”), which is a committee of the Board of Directors (“the Board”), is responsible for considering the systems and standards of internal control and the Company’s financial reporting requirements. It also considers annual and half yearly financial statements of the group and such other similar statements as may be appropriate. The Committee has no management role.
1.2 The Board has delegated to the Committee the responsibility for formulating policies and systems of risk management, and submitting such policies and systems to the Board for ratification, in respect of systems and standards to control:
1.2.1 Financial risk;
1.2.2 Clinical risk; and
1.2.3 IT systems risk in relation to operational control and financial management reporting.
1.3 The Committee reports to the Board on the effectiveness of the internal control systems and the Company’s risk assurance framework in relation to financial, clinical and IT systems risk including systems of risk management, the standards of financial accounting and significant non-compliance with relevant accounting standards.
2. Membership
2.1 The membership of the Committee consists of not less than three independent non – executive directors appointed by the Board. The Chairman of the Committee is appointed by the Board. The Chairman of the Board, if a member of the Committee, may not be the Chairman of the Committee. At least one member of the Committee must have financial expertise.
2.2 A quorum is two members.
2.3 The Managing Director, the Chief Financial Officer, the external auditors, the internal auditors and other senior executives as the Committee considers appropriate, will be invited by the Committee to attend as required. The Secretary of the Board or designate will be the Secretary of the Committee.
2.4 Members will be appointed for a term of 3 years. Rotation of members’ appointments is to be encouraged.
3. Meetings and Reporting
3.1 The Committee meets formally at least five times a year and the schedule of meetings will be agreed in advance. Two of the meetings will be set at a date to enable the draft half – yearly interim results and the draft annual accounts to be reviewed prior to presentation to the Board and will be attended by the external auditors.
3.2 The agenda will be prepared and issued prior to meetings. Minutes of the proceedings of all meetings are taken by a person appointed by the Committee. A report of any material business considered at each meeting will be given to the Board by the Committee Chairman.
3.3 The Committee reviews these terms of reference at least annually, or more frequently as circumstances dictate.
4. Function and Role
4.1 The Committee in meeting its primary objectives should, without limiting the extent of its responsibilities, carry out the task and consider the various matters set out in sections 4.2 to 4.6 below.
4.2 Interface with the external auditors
4.2.1 Approve the annual plans of the external auditors for the group and regularly monitor the progress of implementation of these plans.
4.2.2 Discuss the scope of audit work with the external auditors and recommend letters of engagement (including proposed fees) and report as necessary to the Board.
4.2.3 Review with the external auditor any significant recommendations made by them on the subject of internal control, and management’s response to the recommendations.
4.2.4 Monitor progress made by management in improving internal controls arising from recommendations made by the external auditors.
4.2.5 Make recommendations to the Board on the appointment of the external auditors.
4.2.6 Review external audit fees.
4.2.7 Determine the independence of the external auditors.
4.2.8 Meet with the external auditors, in the absence of management, to hear the views of the auditors on financial management and internal controls.
4.3 Interface with Internal Auditors
4.3.1 Approve the annual plans of the internal auditors for the group and regularly monitor the progress of implementation of these plans.
4.3.2 Discuss the scope of audit work with the internal auditors and recommend letters of engagement (including proposed fees) and report as necessary to the Board.
4.3.3 Review with the internal auditor any significant recommendations made by them on the subject of internal control, and management’s response to the recommendations.
4.3.4 Monitor progress made by management in improving internal controls arising from recommendations made by the internal auditors.
4.3.5 Make recommendations to the Board on the appointment of the internal auditors.
4.3.6 Review internal audit fees.
4.3.7 Determine the independence of the internal auditors.
4.3.8 Meet with the internal auditors, in the absence of management, to hear the views of the auditors on financial management and internal controls.
4.4 Compliance
4.4.1 Review the processes in place for ensuring that Policy and Procedure Manuals properly reflect all current legislation and regulation.
4.4.2 Monitor the establishment and maintenance by the Company of an appropriate system of audit in relation to compliance matters within the Objectives, including the level of compliance with the risk policies and contracts and risk assurance agreed to by the Board.
4.4.3 Review processes for reporting by compliance or non – compliance and any remedial action required to achieve compliance.
4.4.4 Monitor the level of compliance resources in relation to the business activities of the group.
4.5 IT Systems
4.5.1 Review the effectiveness of the Company’s IT systems in relation to operational control and financial management reporting.
4.5.2 Review the Disaster Recovery and Business Continuity programs of the Company for effectiveness.
4.6 Financial Reporting
4.6.1 Review annual and half yearly financial statements with management and with the external auditors as necessary prior to their approval by the Board.
4.6.2 Review and report to the Board all significant accounting policy changes.
4.7 General
4.7.1 Undertake any matters referred to the Committee by the Board.
Last reviewed: 20 August 2008.