Audit Committee Charter

Audit Committee

Wide Bay Australia Ltd (Wide Bay) Audit Committee’s focus is on the issues relevant to verifying and safeguarding the integrity of Wide Bay’s financial operations and reporting structure. Currently the Audit Committee is comprised of the 3 independent directors, with an independent Chairman who is not Chairman of the Board.

Financial Reports

It is a requirement that the Managing Director and the Chief Financial Officer state in writing to the Board that Wide Bay’s financial reports present a true and fair view in material aspects of the Company’s financial condition and that operational results are in accordance with the relevant accounting standards.

Meetings

The Committee shall meet quarterly or as required and the Chairman will meet with the External Auditors on the completion of the annual accounts or if required the Committee with meet with the External Auditors. Separate minutes shall be kept of the Audit Committee Meetings.

Objectives

The primary purpose of the Audit Committee is to:-

• overview the management of the financial reporting and disclosure practices;
• overview of the internal audit functions;
• compliance with APRA reports and other statutory requirements
• financial accounts;
• address changes in the adoption of accounting principles and the application thereof in interim and annual reports;
• review reports from the External Auditors; and
• review reports from the Internal Auditor, the Internal Audit program and any Management responses to issues raised.

Internal Audit

The Audit Committee in conjunction with the Internal Auditor will review the internal audit program and the Internal Auditor’s adherence thereto. The Internal Auditor will be required to work closely with the External Auditor as required with meetings to discuss audit plans, access to documentation and relevant reviews carried out by the Internal Auditor. The Internal Auditor is required to report to the Audit Committee who will report to the full Board.

The Internal Auditor will be under no restrictions as to the scope of his audit and access to records that he may seek.

Risk Management

The Audit Committee also carries out various aspects of the financial risk management process and the controls applicable. They are required to review regularly with management the appropriateness of policies and programs in respect of management assessment and any other activities that may be deemed relevant having regard to the prudential standards and APRA requirements.

Securitisation

The Internal Auditor will be required to maintain a parcel of loans that have been audited and conform to the criteria for funding into the SG warehouse facility. He will also be required to ensure the relevant requirements of the securitised trusts are complied with.

External Auditor

The Audit Committee is responsible for:-

• review and selection of External Auditors for recommendation to the Board of Directors;
• review of external audit engagement letters and management letters;
• review of the performance of External Auditors and the non-auditing services provided;
• confirmation of the External Auditors independence;
• review of the audit scope and use of resources;
• review with External Auditor and management of results of annual audits; and
• any significant queries in relation to variations from the standard accountancy principles, the quality of those principles and disclosure procedures proposed to be adopted.

Risk Oversight, Management and Internal Control

While the Board’s Charter delegates the risk management supervision to the Audit/Risk Management Committee, it is a key governance and management process that is ultimately the responsibility of the full Board.

The Risk Management System covers operations risk, financial reporting and compliance (particularly with the APRA standards). The primary objectives of the Risk Management System will ensure:-

• all major sources of potential opportunity for harm are identified, analysed and treated appropriately;
• business decisions are appropriately analysed with the balancing of the risk and reward;
• regular compliance and integrity and reporting is achieved; and
• Senior Management, the Board and Shareholders understand the risk profile.

The Audit Committee has internal compliance and control systems which provide:-

• a comprehensive internal audit program;
• a financial reporting system; and
• ensures reporting is both accurate and timely

The Audit Committee meets at least quarterly with the Internal Auditor and Senior Management and monitors the progress of the internal audit and regularly reviews the Internal Audit Plan.

Financial control processes include:-

• annual audit and half year review by the External Auditor;
• monthly review of financial performances compared to budget and forecasts; and
• analysis of financial performance and significant balance sheet items.