Principle 4

SAFEGUARD INTEGRITY IN FINANCIAL REPORTING  

Audit Committee

The members of the Audit Committee during the year were:

Mr GJ Campbell (Chairman);

Independent Non-Executive Director (appointed Chairman on 18 September 2007)

Mr SL Wallis AO; and
Independent Non-Executive Director

Mr AR Amer
Independent Non-Executive Director (retired as Chairman on 18 September 2007; retired as member on 20 November 2007)

The ASX Best Practice Principles and Recommendations state that the Audit Committee should comprise at least three members. Mr Graeme Campbell, who was appointed a director of the Company, accepted the role as Chairm of the Audit Committee effective 18 September 2007, with Mr Andrew Amer becoming a member of this Committee. During the year and currently the Audit Committee comprised of only two members. Due to the size the Board, the Audit Committee will comprise of only two members until such time as an additional independent non-executive director is appointed.

The Audit Committee has a documented Charter, which is regularly reviewed and approved by the Board. All members are currently independent non-executive directors. The Chairman of the Committee is not the Chairman of the Board. The Committee advises on the establishment and maintenance of a framework of internal financial control for the management of the Company.

The external auditors, the Chief Executive Officer and Chief Financial Officer / Company Secretary, are invited to attend Audit Committee meetings at the discretion of the Committee. The Committee met four times during the year and Committee members’ attendance record is disclosed in the table of directors’ meetings on page 20 of the 2008 Annual Report. The external auditor met with the Audit Committee and the Board during the year, without management being present.

The Chief Executive Officer and the Chief Financial Officer / Company Secretary declared in writing to the Board that the Company’s financial reports for the year ended 30 June 2008 present a true and fair view, in all material respects, of the Company’s financial condition and operational results and are in accordance with relevant accounting standards.  This statement is required for the full year and half year reporting periods.

The main responsibilities of the Audit Committee are to:

• assist the Board to discharge its fiduciary responsibilities with regard to the Company’s accounting, control and reporting practices by monitoring the risk and internal control environment and management over corporate assets;

• review internal controls and any changes thereto approved and submitted by the Company’s Chief Financial Officer / Company Secretary;

• provide assurance regarding the quality and reliability of financial information used by the Board;

• oversee the activities of the internal audit function and external audit staff of the Company and to review the Company’s risk management policies and internal control processes;

• review and recommend to the Board the adoption of the Company’s half year and annual financial statements;

• liaise with and review the performance of the external auditor;

• consider whether non-audit services provided by the external auditor are consistent with maintaining the external auditors’ independence; and

• perform, at least annually, a performance evaluation to ensure delivery on its charter and continually enhance the Committee’s contribution to the Board.

The Audit Committee reviews the performance of the external auditors on an annual basis and meets with them during the year to:

• discuss the external audit and internal audit plan;

• identify any significant changes in structure, operations, internal controls or accounting policies likely to impact the financial statements;

• review the fees proposed for the audit work to be performed;

• review the half-year and preliminary final reports and any significant adjustments required as a result of the auditor’s findings prior to lodgment with the ASX; 

• review the results and findings of the auditor and monitor the implementation of any recommendations made; and

• organize, review and report as required on any special reviews or investigations deemed necessary by the Board subject to the engagement not impairing audit independence.

The Audit Committee also considers the selection and appointment of external auditors and the rotation of external audit engagement partners.