AUDIT COMMITTEE CHARTER

Transcription

1 AUDIT COMMITTEE CHARTER WBHO Audit Cmmittee Charter Page 1 f 9

2 Intrductin The Audit Cmmittee is cnstituted as a statutry cmmittee f the Cmpany in respect f its statutry duties in terms f Sectin 94(1) f the Cmpanies Act, The duties and respnsibilities f the members as set ut in this dcument are in additin t thse duties and respnsibilities that they have as members f the bard. The deliberatins f the cmmittee d nt reduce the individual and cllective respnsibilities, and they must cntinue t exercise due care and judgment in accrdance with their legal bligatins. Rle and Purpse The rle and purpse f the charter is t set ut the cmmittee s rle and respnsibilities. The cmmittee has an independent rle with accuntability t bth the bard and sharehlders and des nt assume the functins f management, which remains the respnsibilities f the executive directrs, fficers and ther members f senir management. Cmpsitin f the Cmmittee The cmmittee cmprises at least: Three members t be elected by the sharehlders and by the nminatins cmmittee (where ne exists) (S94); The chairman f the cmmittee shall be an independent nn-executive directr; The CEO, the CFO and at least ne representative f the external auditrs and the internal auditrs shall attend the meetings by invitatin; The members f the cmmittee must be directrs f the cmpany and cllectively have sufficient qualificatins and experience t fulfill their duties, including an understanding f the fllwing: Financial and sustainability reprting; Internal financial cntrls; Internal and external audit prcess; Crprate law; Risk management and sustainability issues; Infrmatin technlgy gvernance as it relates t integrated reprting and gvernance prcesses within the cmpany The cmmittee members must nt be: Invlved in the day t day management f the cmpany s business r have been s invlved at any time during the previus year; A prescribed fficer, r full-time emplyee f the cmpany r anther related r inter-related cmpany, r have been such an fficer r emplyee at any time during the previus three financial years; r A material supplier r custmer f the cmpany, such that a reasnable and infrmed third party wuld cnclude in the circumstances that the integrity, impartiality r bjectivity f that directr is cmprmised by that relatinship; and nt be related t any persn wh falls within the abve categries WBHO Audit Cmmittee Charter Page 2 f 9

3 Respnsibilities The Cmmittee has the fllwing respnsibilities: Integrated reprting The cmmittee must have regard t all factrs and risks that may impact n the integrity f the Integrated reprt, including factrs that may predispse management t present a misleading picture, significant judgment and reprting decisins made, mnitring r enfrcement actins by a regulatry bdy; Review the annual financial statements, interim reprts and any ther intended release f any price sensitive infrmatin and prspectuses, trading statements and similar dcuments; Cmbined assurance Ensure that the cmbined assurance received is apprpriate t address all the significant risks facing the cmpany; and Mnitr the relatinship between the external assurance prviders and the cmpany; Finance functin and CFO The cmmittee reviews the expertise, resurces and experience f the cmpany s finance functin, and disclses the results f the review in the integrated reprt; External auditrs External auditrs are expected t bring t the reprting prcess technical cmpetence, business judgment, integrity and bjectivity; The audit cmmittee is respnsible fr cmmunicating with the auditrs regarding their annual audit f the financial statements, as well as their participatin in interim reprting; Cmmunicatin with the auditrs must be free and pen t ensure the audit cmmittee is infrmed f ptential inaccuracies in the financial statements, significant deficiencies and internal cntrls, alternative accunting treatments and ther significant findings during the curse f the audit wrk. Internal Cntrls An internal cntrl envirnment which prvides assurance that financial reprts are nt materially inaccurate will als help prevent fraudulent activities; Strng internal cntrls are an essential cmpnent f assuring sund financial reprting and the prtectin f assets; An effective internal audit functin is als an imprtant part f the cntrl envirnment; WBHO Audit Cmmittee Charter Page 3 f 9

4 Management generally versee the wrk f the internal auditrs in valuating and testing the internal cntrl structure; The audit cmmittee shall have direct access t the internal auditrs s that it can receive input n the adequacy f cntrls and initiate special audit emphasis if necessary. Cmmunicatin with Management The audit cmmittee members shuld have pen cmmunicatin with management and they shuld clearly understand management s assessment f any respnse t any special audit risks r high risk areas and the internal/external audit activities, if any, related t these risks. Objectives f the audit cmmittee T ensure that management has created and maintained an effective cntrl envirnment and that management demnstrates and stimulates the necessary respect f the internal cntrl structure amngst ther parties; T review the scpe and utcme f audits. The review will include an assessment f the effectiveness f the annual audit, ensuring emphasis is placed n areas where the cmmittee, management r the auditrs believe special attentin is necessary; T ensure that the bard f directrs make infrmed decisins and is aware f the implicatins f such decisins regarding accunting plicies, practices and disclsures; T prvide a safeguard fr directr s liabilities by infrming the bard f directrs n issues f imprtance t the business and the status f financial reprting; T enquire int the prcess f risk identificatin. Duties f the Audit Cmmittee The Audit Cmmittee f the Cmpany has the fllwing duties: a) T nminate, fr appintment as auditr f the cmpany under sectin 90, a registered auditr wh, in the pinin f the audit cmmittee, is independent f the cmpany; b) T determine the fees t be paid t the auditr and the auditr s terms f engagement; c) T ensure that the appintment f the auditr cmplies with the prvisins f the Act and any ther legislatin relating t the appintment f auditrs; d) T determine the nature and extent f any nn-audit services that the auditr may prvide t the cmpany, r that the auditr must nt prvide t the cmpany, r a related cmpany; e) T pre-apprve any prpsed agreement with the auditr fr the prvisin f nn-audit services t the cmpany; WBHO Audit Cmmittee Charter Page 4 f 9

5 f) T prepare a reprt, t be included in the annual financial statements fr that financial year:- i. Describing hw the audit cmmittee carried ut its functins; ii. Stating whether the audit cmmittee is satisfied that the auditr was independent f the cmpany; and iii. Cmmenting in any way the cmmittee cnsiders apprpriate n the financial statements, the accunting practices and the interim financial cntrl f the cmpany. g) T receive and deal apprpriately with any cncerns r cmplaints, whether frm within r utside the cmpany, r n its wn initiative, relating t:- i. The accunting practices and internal audit f the cmpany; ii. The cntent r auditing f the cmpany s financial statements; iii. The internal financial cntrls f the cmpany; r iv. Any related matter. h) T make submissins t the bard n any matter cncerning the cmpany s accunting plicies, financial cntrl, recrds and reprting; and i) T perfrm ther functins determined by the bard, including the develpment and implementatin f a plicy and plan fr systematic, disciplined apprach t evaluate and imprve the effectiveness f risk management, cntrl, and gvernance prcesses within the cmpany. j) That the external auditrs satisfy the audit cmmittee that the financial reprting prcess will generate infrmatin necessary t manage the cmpany and prperly reprt n its peratins. Cntrls and prcedures must be designed t: i. Ensure that transactins are prperly authrized and recrded; and ii. Ensure the accuracy and timelines f the infrmatin reprted k) T have cmfrt that the financial reprting prcess will be based n the quality f financial infrmatin, the level f management s invlvement, and the wrk f the auditrs. Reviewing the financial statements The audit cmmittee is respnsible fr reviewing the financial statements and annual reprts, acting under the guidance f the external auditrs, prir t submissin t the bard f directrs. The bjective f the review is t ensure that disclsure is adequate and that fair presentatin is achieved, including cntingent liabilities such as utstanding litigatin. Such a review wuld entail: Obtaining explanatins fr all significant variances in the financial statements, between years; Reviewing the cmpany s accunting plicies r majr changes in plicies which management shuld cnsider making r have already implemented; Examining the effect f changes in Statement f generally Accepted Accunting Practice; WBHO Audit Cmmittee Charter Page 5 f 9

6 Enquiring abut any significant financial reprting issues discussed during the accunting perid between management and the auditrs and hw they were reslved; Assessing significant judgment decisins that had a majr impact n the financial statements; Reviewing any significant adjustments resulting frm the audit; Examining cmpliance with accunting standards and with stck exchange and ther statutry requirements; Obtaining reasns fr significant lss-making peratins and cnsidering whether the value f their related assets is fairly stated in the balance sheet; Reviewing significant transactins which are nt a nrmal part f the cmpany s business; Reviewing the adequacy f the clsed cntract prvisins; T cnsider and recmmend t the bard whether t engage external assurance prviders t reprt n the accuracy and cmpleteness f integrated sustainability reprting (King III); and Understanding the extent t which the financial infrmatin accmpanying the audited financial statements has been audited. Assessing the risk f fraudulent financial reprting Assessing the risk f fraudulent financial reprting is challenging due t rapid business climate changes. The cmmittee must ensure that the external auditrs have cnsidered this risk with reference t: The business envirnment; The financial liquidity f the cmpany; Management s reputatin, integrity and experience; and Relatinship between management and external auditrs. Cmmunicating with the auditrs The audit cmmittee is respnsible fr cmmunicating with the external auditrs. In its verseeing rle, the cmmittee shuld fcus n: The changing business envirnment; Changing financial reprting standards; The findings frm the annual audit and interim wrk, including cmments n cntrls; and The prpsed audit scpes, and appraches with respect t cmplex, high risks, and judgmental areas. The cmmittee shuld meet at least twice per year with the external auditrs t discuss these matters. At least ne f these meetings may include an executive sessin t ensure free and pen cmmunicatin. In its review prcess and discussins with the external auditrs, the cmmittee shuld ensure that the fllwing matters are addressed: Auditrs t reprt whether the scpe f the audit was restricted by management; WBHO Audit Cmmittee Charter Page 6 f 9

7 Prblems and reservatins arising frm the interim and final audits, and any material pints raised in audit reprts issued since previus meetings and management s respnse theret; The status f internal cntrls and the results f internal cntrls matrix; Review f the cmpany s statements n internal cntrls prir t endrsement by the bard; Reprt back frm the auditrs n majr weaknesses in internal cntrl, as well as steps taken t rectify prblem areas. The effectiveness f the internal audit functin cnducted as an extensin f the external audit wrk. This wuld ensure that there is prper c-rdinatin between the internal and external auditrs, and that the internal audit functin is adequately resurced and has apprpriate standing within the cmpany; Areas f significant disagreement between management and auditrs; Majr findings f internal investigatins and managements respnses; Auditrs reprts n incidents f fraud and/r irregularities r stck lsses since the previus meeting; Steps taken t review the cmpany s IT prcedures and cntrls at majr installatins Areas where management believe the cst f implementing additinal r changed cntrls utweigh the risk f making n changes; Ensure that the Cmpany reviews the whistle blwing and fraud prcedures (King III). Ethical cde f cnduct A well written and apprpriate cde f cnduct endrsed by the bard is a gd cmmunicatin device which alerts all emplyees t ethical standards and guidelines fr acceptable behaviur. Such standards prmte ethical decisin making and may help reslve ethical dilemmas that arise. The cde shuld als prmte an envirnment where pen cmmunicatin is expected and prtected. The audit cmmittee shuld exercise versight by reviewing annually the prgramme that management established t mnitr cmpliance with the cde. Hwever, the audit cmmittee s mst imprtant cntributin t assuring ethical cnduct is its sincere interest in the cmpany s peratins and its advcacy f a high standard f behaviur. Cmmunicating with the bard f directrs The cmmittee shuld reprt its activities t the full bard as sn as pssible after each meeting. The reprt back shuld cver: Any significant issues which might affect the directrs liability; Any significant issues arising ut f the review f the financial statements, and discussins n the audits undertaken. Respnsibility f management Management must ensure that an adequate and effective cntrls system exists. A strng internal cntrl envirnment includes cntrls and prcedures which: WBHO Audit Cmmittee Charter Page 7 f 9

8 Prevent irregularities frm ccurring; Detect n a timely basis errrs and irregularities that ccur Safeguard the cmpany s assets. These cntrls need t address, amng ther things, the fllwing types f risks: Physical security ver assets that are readily transferable including perating assets, certain types f inventry and cash; and Unauthrized access t sftware and cmputer files that are critical t the peratin f the business and/r t the financial management f the cmpany. External auditrs respnsibility fr fraud detectin The respnsibility f the external auditrs in detecting fraud is limited. An audit shuld be planned t prvide reasnable assurance f detecting errrs and irregularities. Audit Fees It is the functin f the audit cmmittee t agree n the fees f the auditrs. These must be submitted by the financial directr and management, tgether with an analysis f actual time spent, cmpares t the previus year and budget t assist the cmmittee in identifying any ptential prblem areas. The auditrs must reprt t the audit cmmittee chairman if they believe the scpe f the audit has been restricted by management having placed undue fee pressure n them. Meeting Prcedures Frequency The cmmittee will hld a minimum f tw meetings per annum ne after the financial year end, but prir t bard apprval f the annual financial statements t discuss the annual financial statements and utcme f the year end audit; Additinal meetings t thse scheduled, may with apprval f the chairman be held at the request f the external auditrs, the CEO, the CFO, the internal auditrs r at the instance f the bard; The cmmittee must meet with internal and external auditrs nce a year withut management being present; Attendance The cmmittee members must attend all scheduled meetings including meetings called at an ad-hc basis fr special matters unless prir aplgy with reasns have been submitted t the chairman r cmpany secretary; The CEO, CFO, internal and external auditrs, assurance prviders, bard members and ther prfessinal advisers may be in attendance by invitatin nly; WBHO Audit Cmmittee Charter Page 8 f 9

9 Agenda and Minutes A detailed agenda tgether with supprting dcuments must be circulated t the members and invitees at least a week prir t the meeting; Cmmittee members must be fully prepared fr cmmittee meetings in rder t prvide apprpriate and cnstructive deliberatin n matters discussed; Minutes must be cmpleted as sn as pssible after the meeting and circulated t the members and the chairman fr review theref, and be frmally apprved at the next meeting. Qurum A representative qurum fr the meeting is the majrity f members present. Individuals in attendance by invitatin may participate in discussins but d nt frm part f the cmmittee; Evaluatin The bard must perfrm an evaluatin f the effectiveness f the cmmittee every year; WBHO Audit Cmmittee Charter Page 9 f 9