Audit and Risk Committee: Terms of Reference 6 December 2017
Contents Audit and Risk Committee: Terms of Reference... 3 1.0 About the Committee... 3 1.1 Composition of the Committee... 3 1.2 Secretary... 3 1.3 Frequency of Meetings... 3 1.4 Notice of Meetings... 3 1.5 Minutes of Meetings... 4 1.6 Board Meeting... 4 2.0 Duties of the Committee... 4 2.1 Financial Reporting... 4 2.2 Internal Control and Risk assessment... 4 2.3 Internal Audit... 5 2.4 External Auditors... 5 3.0 Reporting Responsibilities... 6 4.0 Other Matters... 6 5.0 Authority... 6
Audit and Risk Committee: Terms of Reference These Terms of Reference shall be as set out in the National Code of Corporate Governance and are as follows: 1.0 About the Committee 1.1 Composition of the Committee The committee shall comprise of not less than 3 directors appointed by the Board, at least one shall be independent non-executive directors. Members of the committee shall be appointed by the Board. The Board shall satisfy itself that the Chairperson of the committee and at least one member of the Audit Committee has recent and relevant financial experience. The Board shall have the power at any time to remove any members from the Committee and to fill any vacancies created by such removal. Only members of the committee have the right to attend committee meetings. However, the external auditor and finance director will be invited to attend meetings of the committee on a regular basis and other non-members may be invited to attend all or part of any meeting as and when appropriate and necessary. 1.2 Secretary The Company Secretary, or his or her nominee, shall act as the Secretary of the committee and will ensure that the committee receives information and papers in a timely manner to enable full and proper consideration to be given to issues. The quorum necessary for the transaction of business shall be at least two members, one must be an independent director. 1.3 Frequency of Meetings The committee shall meet at least four times a year at appropriate intervals in the financial reporting and audit cycle and otherwise as required. The committee shall meet the following parties: The External Auditor and the lead partner The Internal Auditor lead Partner The Finance Manager Other heads of Departments to provide clarifications 1.4 Notice of Meetings Meetings of the committee shall be convened by the Secretary of the committee at the request of any of its members or at the request of the external audit lead partner or head of internal auditor if they consider it necessary.
Notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed and supporting papers, shall be forwarded to each member of the committee, any other person required to attend, no later than five working days before the date of the meeting. 1.5 Minutes of Meetings The Secretary shall minute the proceedings and decisions of all meetings of the committee, including recording the names of those present and in attendance. Draft minutes of committee meetings shall be circulated no later than ten working days to all members of the committee. Once approved, minutes should be circulated to all other members of the Board unless it would be inappropriate to do so in the opinion of the committee Chairperson. 1.6 Board Meeting The Chairperson shall report to the Board Meeting on work done by the Committee. 2.0 Duties of the Committee The Committee shall carry out the duties highlighted below for the Group as a whole, the parent and the subsidiaries. The main duties are as below: 2.1 Financial Reporting The Committee shall monitor the integrity of the Financial Statements of the Company, including its annual and interim reports; The Financial performance of the Company and the Group Identify areas of concern, review significant financial reporting issues and judgements used; Review significant financial returns submitted to Regulatory Bodies, MRA, MNS etc; Review the accountancy policies and any changes thereof; Clarity of disclosures in the Company Financial Statements; The Going concern assumption and last but not least The declaration of Dividend, the compliance with Companies Act for the declaration of Dividend. 2.2 Internal Control and Risk assessment The Committee shall also consider: The risk appetite of the Group, sometimes the Holding Co and the Subsidiaries separately. The nature and the extent of the risks the Group is willing to take in achieving its strategic objectives; Risk Assessment: Undertake a regular and robust assessment of the principal risks facing the Company, including those that would threaten its solvency and liquidity; Reporting; Ensure that appropriate reporting is included in the annual report, including how the principal risks namely : Financial Risks such as liquidity, interest, credit
Non-financial risks such as, reputational, legal risk, operational risks, health and safety risk, environmental, regulatory risks etc Sound System risk: At least annually conduct a review of the effectiveness of the risk management. 2.3 Internal Audit The Committee shall: Monitor and review the effectiveness of the Company internal audit function in the context of the Group overall risk management system; Approve the appointment of the Internal Auditor Consider and approve the remit of the Internal Audit Function and ensure that it has adequate and appropriate resources to be able to perform its work in the most effective manner; Review and assess the annual internal audit plan; Review promptly all Internal Audit reports on the Group; Review and monitor the departments heads and the GM response to Internal Audit findings; Meet the Internal Audit as deem important; Agree with the internal auditors on the necessity to carry out additional audits where irregular or unidentified losses/problems have cropped up in areas not covered in the Audit Plan 2.4 External Auditors The Committee shall establish working relationship with the External Auditors. Concerning the Auditors, the Committee shall have the following responsibilities: make recommendations to the Board for the appointment/ renewal or removal of the external auditor. oversee the selection process for the new auditors, and if an auditor resigns the Committee shall investigate the issues leading to this. approve the remuneration of the Auditor, fees for audit and non-audit services ensure that the non-audit services provided by the auditors do not impair the independence of the auditors; approve the terms of engagement of the auditor and the scope of the audit; assess the independence of the auditor taking into account the following; Satisfy itself that there is no relationship (family, employment, investment, financial or business), between the auditor and the Company; Monitor the auditor compliance with relevant ethical and professional guidance on the rotation of audit partners, the level of fees to be paid compared to the overall fee income of the firm; Seekto ensure coordination with the activities of the Internal Audit function;
Meet the auditors at planning stage, before the start of the audit, and once after the audit, at the reporting stage, to discuss their remit and any issues arising from the audit; Review and approve the audit plan and ensure that it is consistent with the scope of the audit engagement; Review the findings of the audit with the external auditor. This shall include but not limited to the following: Discussion on major issues which arose during the audit; Any accounting and audit judgements; Level of errors identified during the audit. review the effectiveness of the audit; review any representation letters by the Auditor review the management letter and submit management response to the auditor s findings and recommendations; Develop and implement a plan for all audit querries that require, long term solutions. 3.0 Reporting Responsibilities The Committee Chairman shall report to the Board on its proceedings after each meeting. The Committee shall make whatever recommendations to the Board it deems appropriate; The Committee shall compile a report to the shareholders on its activities to be included in the Company s Annual Report; 4.0 Other Matters The Committee shall: Have direct access to those responsible for Finance; Have access to all the departments in general in order to carry out its duties effectively; Give due consideration to legal requirements; the provisions of the Code of Corporate Governance, the disclosure requirements in the Financial Reporting; Be responsible for the co-ordination of the internal and external auditors; Oversee any investigation of activities which are within its terms of reference and act as a Court of the last resort; Review its performance annually, to ensure that it is operating to the maximum effectiveness; 5.0 Authority The Committee is authorized: To seek any information it requires from any employee of the Company in order to perform its duties;
To obtain, at the Company s expense, outside legal or other professional advice on matters it reasonably believes it necessary; To call any member of the staff to be questioned at the Committee as and when required; Date: 6 December 2017.