Audit and Treasury Committee Charter

1   Constitution

1.1    The Audit and Treasury (Committee) shall be a Committee established by the Boards of Augusta Capital Limited and Augusta Funds Management Limited.

 

2   Objectives

2.1   The Committee’s objectives are to:

(a)  assist the Boards in discharging their responsibilities relative to financial reporting, regulatory conformance and other accounting requirements;

(b)  assist the Boards in discharging their responsibility to exercise due care, diligence and skill in relation to oversight of:

  • the integrity of external financial reporting;

  • the application of accounting policies;

  • financial management;

  • internal control systems;

  • related party transactions (if any);

  • protection of the company’s assets;

  • compliance with applicable laws, regulations, standards and best practice guidelines as they relate to financial disclosure;

(c)  improving the efficiency of the Boards by allowing for the delegated issues to be discussed in sufficient depth;

(d)  reviewing managements’ letters of representation;

(e)  facilitating the continuing independence of the external auditor;

(f)   assessing the external auditor’s independence and qualifications;

(g)   improving the quality, credibility and objectivity of the accounting process (including financial reporting);

(h)   overseeing and monitoring the performance of the internal and external auditors;

(i)    providing a structured reporting line for internal audit and facilitating the maintenance of the objectivity of the internal auditor; and

(j)    providing a formal forum for communication between the Boards and senior financial management.

 

3     Membership

3.1    The Committee will comprise members of the Boards and be appointed by the Boards.  All Committee members shall be financially literate.

3.2    The Committee meets a minimum of four times each year.

3.3    The number of Committee members shall be not less than three.

3.4    The Committee must have one member who has a financial background.  This person may be someone who:

  • as a result of acting as a public accountant or auditor or due to other relevant experience has appropriate knowledge of both Generally Accepted Accounting Practices (GAAP) and financial reporting proceedings and internal controls along with audit committee functions; and

  • is a member of the Institute of Chartered Accountants in New Zealand; or

  • has held a Chief Financial Officer position at an issuer for a period greater than 24 months; or

  • has completed a course approved by the New Zealand Exchange for Audit Committee membership.

3.5   The Board shall appoint the Chairperson of the Committee.

3.6   The secretary of the Committee shall be appointed by the Board.

 

4    Procedure

4.1   Meetings shall be held not less than four times a year having regard to the company’s reporting and audit cycle.

4.2   Attending each meeting by a standing invitation to all directors, members of the management team, Audit Committee, and representatives from the external auditors.  From time to time the Chairperson of the Committee shall be entitled to request that the Committee meet without any of those persons.

4.3   The external auditors are encouraged to meet as appropriate with the Committee Chairperson, independent of management.  The Committee Chairperson will generally meet with management, and the external auditors (either together or separately as the chairperson deems appropriate) before each Committee meeting and at other times as required.

4.4   The agenda and Committee papers will be prepared and circulated to all directors of the Company including the members of the Committee prior to Committee meetings.

4.5   The Chairperson will report back to the Board the recommendations of the Committee at the Board meeting immediately following the Committee meeting.

 

5   Duties and Responsibilities

5.1   For the purposes of this section:

  • “Statutory Audit Role”  means services required by any law to be provided by the auditors, acting as such; and

  • “External financial reporting” means the quarterly, half-yearly and annual financial statements, external audits/reviews, management discussion and analysis, and any management letters (including management responses).

5.2    The Committee does not take actions or make decisions on behalf of the Board unless specifically mandated.  The Board has delegated certain functions to the Committee which is responsible for:

General Responsibilities

  • ensuring that processes are in place and monitoring those processes so that the Board is properly and regularly informed and updated on corporate financial matters;

  • reviewing and discussing the “external financial reporting” with management, including whether the reporting is consistent with the Committee members’ information and knowledge, whether it is adequate for shareholder needs and whether it complies with the appropriate laws and regulations;

  • meeting with the external auditors to discuss the practices and issues surrounding the external financial reporting;

  • reporting the results of the review to the Board and recommending, if appropriate, the Board adopt the external financial reporting;

  • liaison with external auditors;

  • review of the annual audit plan with the external auditors;

  • assessment of the performance of financial management;

  • review of audit findings and the annual financial statements;

  • review of half-year (interim) financial information;

  • prior clearance of public releases of financial information to the media;

  • review of accounting policies;

  • oversight of compliance with statutory responsibilities relating to financial reporting and other accounting related requirements;

  • review of the frequency and significance of all transactions between the company and related parties and assessment of their property;

  • review of the appointment of the external auditors and their fees;

  • ensuring that recommendations highlighted in Management reports are actioned by management;

  • examination of any other matters referred to it by the Board;

 

Responsibilities regarding Auditor Independence

  • addressing what, if any, services other than in their Statutory Audit Role may be provided by the auditors;

  • ensuring that the ability and independence of the auditors to carry out their Statutory Audit Role is not impaired, or could reasonably be perceived to be impaired;

  • providing for the monitoring and approval by the Committee of any service provided by the auditors to the company other than in their Statutory Audit Role;

  • review of the independence of the external auditors. Any non-audit services provided by the auditors must be approved by the audit committee; and

  • recommending the appointment and removal of the independent auditor (where necessary).

 

6   Members’ Powers and Authority

6.1   The Committee may delegate any of its responsibilities to the Chairperson of the Committee from time to time and on such conditions as the Committee considers appropriate.

6.2    The Committee is authorised by the Board to investigate any activity covered by its role.

6.3    The Committee members may communicate with any of the management team to seek any information they require in order for the Committee to carry out its role.  All employees will be directed to co-operate with any request made by the Committee.

6.4   The Committee is authorised by the Board to obtain, at the Company’s expense, outside legal or other independent professional advice and to arrange for the attendance at meetings, at the Company’s expense, of outside parties with relevant experience and expertise if it considers this necessary.

6.5   Management is responsible for the preparation, presentation and integrity of the financial statements.  Management is responsible for implementing and maintaining appropriate accounting and financial reporting principles and policies and internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. 

6.6   The external auditors are responsible for planning and carrying out each audit and review, in accordance with applicable auditing and review standards.  The external auditors are accountable to shareholders through the Committee.

 

7   Reporting Procedures

7.1   The Committee shall maintain direct lines of communication with and unrestricted access to the external auditors, the members of the Board and representatives of management.

7.2    The Chairperson of the Committee and Management shall be responsible for drawing to the Committee’s immediate attention any material matter that relates to the financial condition of the company, any material breakdown in internal controls, and any material event of fraud or malpractice.

7.3    The Chairperson of the Committee will report back to the Board the findings and recommendations of the Committee at the Board meeting immediately following the Committee meeting.

7.4    The minutes of all Committee meetings shall be circulated to members of the Board, management and to such other persons as the Board directs.

7.5    The Chairperson shall present an annual report to the Board summarising the Committee’s activities during the year and any related significant results and findings.

 

8   Accountability to the Board

8.1    The Board reviews annually the Committee’s performance against this Charter.

8.2    The Board reviews annually this Committee Charter.

 

9    Quorum

9.1    A quorum of members of the Committee shall be three.