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## 3. BOARD COMMITTEES 

To assist the Board in fulfilling its duties and responsibilities, it has established the following committees: 

• Audit Committee; and 

• Remuneration Committee. 

## 3(a) Audit Committee 

The Board has established an Audit Committee that has three members, comprising two non-executive directors and the Company Secretary. The Audit Committee is governed by its charter, as approved by the Board. It is the Board’s responsibility to ensure that an effective internal control framework exists within the entity. This includes internal controls to deal with both the effectiveness and efficiency of significant business processes, the safeguarding of assets, the maintenance of proper accounting records, and the reliability of financial information as well as non-financial considerations such as the benchmarking of operational key performance indicators. The Board has delegated responsibility for establishing and maintaining a framework of internal control and ethical standards to the Audit Committee. 

The Committee also provides the Board with additional assurance regarding the reliability of financial information for inclusion in financial report. 

The Audit Committee’s main responsibilities include: 

• approval of the scope and plan for the external audit; 

• review of the independence and performance of the external auditor; 

• review of significant accounting policies and practices; and 

• review and recommendation to the Board for the adoption of the Consolidated Entity’s half- year and annual financial statements. 

The Audit Committee does not comply with ASX Recommendation 4.2 as only two of the three members are non- executive Directors and none are considered to be independent Directors (refer 2(e)). The Company believes that the committee has appropriate financial expertise, all members are financially literate and have an appropriate understanding of the Company’s activities. The Audit Committee is comprised of: 

<img src='content_image/239501.jpg'>

The qualifications of the committee are set out in the Directors’ Report of the Annual Report under the heading “Directors”. 

The number of times the Audit Committee has formerly met and the number of meetings attended by directors during the financial year are reported in Directors’ Report of the Annual Report under the heading “Directors’ Meetings”. 

## External Auditors 

The Company’s policy is to appoint external auditors who clearly demonstrate quality and independence. The performance of the external auditor is reviewed annually and applications for tender of external audit services are requested as deemed appropriate, taking into consideration assessment of performance, existing value and tender costs. It is Ernst & Young’s policy to rotate engagement partners on listed companies at least every five years. 

An analysis of fees paid to the external auditors, including a break-down of fees for non-audit services, is provided in the notes to the financial statements in the Annual Report. 

