The purpose of the Audit and Risk Management Committee is to assist the Board in fulfilling its statutory, corporate governance and oversight responsibilities by monitoring and reviewing the integrity of financial statements, the effectiveness of internal financial controls, the independence, objectivity and performance of external auditors, and the policies on risk oversight and management.
The role and responsibilities, composition and membership requirements of the Audit and Risk Management Committee are documented in an Audit and Risk Management Committee Charter approved by the Board and include:
- making recommendations to the Board on the nomination and remuneration of external auditors;
- reviewing the performance and independence of the external audit;
- providing an independent, objective review of financial information provided by management to Shareholders and regulatory authorities;
- reviewing the adequacy and effectiveness of the Company policies and procedures which relate to risk management and compliance;
- maintaining an up-to-date understanding of areas where the Company is, or may be, exposed to risk and compliance issues and seek to ensure that management is effectively managing those issues; and
- assisting the Board in fulfilling its responsibilities relating to the risk management and compliance practices of Temple & Webster Group.
Formal systems will be introduced for regular reporting to the Board on financial risks and compliance matters. The independent auditors will have a direct line of reporting to the Committee and have clear and open access to members of this Committee.
The Company does not currently have an internal audit function in place. The Audit and Risk Management Committee Charter puts in place processes to monitor the Company’s financial and risk management procedures and the Board currently considers these processes appropriate for the size and level of operations of the Company. Temple & Webster Group will employ several safeguards to ensure that its risk management and internal control process is efficient and accurate.
These include:
- annual review of its risk management policy and processes;
- board approval required for all management approval limits; and
- board approval for key policies that impact the Company’s financial and legal exposure.
The Audit and Risk Management Committee Charter provides that the committee should comprise, to the extent practicable given the size and composition of the Board from time to time, at least three members, each of whom are Non-Executive Directors, and a majority of whom are independent. To the extent practicable, the chair of the committee shall be an independent Non-executive Director who is not the Chairman. It is noted that this will not be achieved immediately on Listing due to the current board composition.
The Audit and Risk Management Committee will meet at least four times per year. The chair of the Audit and Risk Management Committee may invite other Directors, members of Management and representatives of the external auditor to be present at meetings of the committee and seek advice from external advisers. The Audit and Risk Management Committee will report to the Board about committee activities, issues and related recommendations at the first board meeting subsequent to each committee meeting.
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