Audit and Risk Committee Charter

1 Purpose

1.1 Committee of the Board

The Audit and Risk Committee ("the Committee") is a committee of the Board, with the specific powers delegated as set out in this Charter in accordance with rule 12.6 of the Company's constitution.

1.2 Purpose of the Committee
The purpose of the Committee is to assist the Board in the effective discharge of its responsibilities for financial reporting, internal controls, risk management, and internal and external audit. The Committee does not relieve any directors of their responsibilities for these matters.
1.3 Exercise of powers

The Committee must exercise the powers delegated to it in accordance with any directions of the Board.

The Committee has authority to perform any function delegated to it by the Board, and may make recommendations to the Board in relation to all matters within its responsibility.

The Committee may delegate any of its functions or responsibilities to one or more members of the Committee or to any director or executive officer of the Company, subject to conditions and on any terms as the Committee determines.

The Committee may exercise its powers:

(a) by resolution passed by a majority of directors who vote on the resolution at a meeting of the Committee; or

(b) by a resolution in writing signed by a majority of the members of the Committee entitled to vote on the resolution.

Notice of a meeting of the Committee shall be given to each person who is a member of the Committee at the time the notice is given.

2 Composition

2.1 Membership

The Committee will include at least three members, all of whom will be:

(a) non-executive Directors;

(b) independent, as determined by the Board; and

2.2 Expertise

In appointing Directors to the Committee, the Board will have regard to the following:

(a) at least one member of the Committee should have financial expertise; and

(b) a majority of members must have an understanding of the industry in which the Company and consolidated Group operates.

2.3 Skills development

A member of the Committee may, with the approval of the Committee Chairman and at the Company's expense, attend seminars or training courses in respect to issues related to the functions and responsibilities of the Committee.

2.4 Chairman

In accordance with rule 13.19 of the Company's constitution, the members of the Committee may elect a Committee Chairman, provided that the Chairman of the Board, if a member of the Committee, cannot be the Committee Chairman.

2.5 Secretary

The Committee Secretary will be a Company Secretary of the Company.

3 Authorities and access of the Committee

3.1 Access to management and others

The Committee, in performing its functions, may:

(a) invite any of the following to attend a meeting of the Committee:

(1) the external auditor;

(2) the internal auditor; and

(3) any other non executive director, executive or employee of the Company;

(4) any other person,

in each case, with or without management being present; and

(b) as appropriate, have unrestricted access to company records and any other document, report, material or information in the possession of an employee or external adviser of the Company.

3.2 Special investigations

The Committee may initiate special investigations as it sees fit, or as directed by the Board, in relation to matters sets out in this Charter.

3.3 Access to independent advice

The Committee may obtain independent professional advice to assist it in the proper exercise of its powers and responsibilities, with the cost to be borne by the Company.

4 Committee responsibilities, powers and authorities

4.1 Financial Reporting

The Committee must promote an environment in the Company that is consistent with best practice financial reporting and appropriately reflects the financial status of the Company to external parties. In particular, the Committee must:

(a) approve the Company’s accounting policies and principles that are required to be reported in the notes to the financial statements (Policies) and changes to the Policies, review and assess the appropriateness of those Policies, including conformance with relevant accounting and reporting standards, and, where appropriate (without limiting the Committee's powers to approve accounting policies and settle interpretation of accounting policies and standards), referring material changes to the Board;

(b) review all financial statements and reports which are required to be published and/or signed by directors prior to approval by the Board. The review of financial statements and reports should include a discussion with the external auditor of accounting issues, accounting policies adopted and the proposed audit report. Subject always to ultimate Board approval of the published financial statements, the Committee has authority to approve accounting issues raised, review and interpret accounting policies adopted and the proposed audit (or review) report;

(c) review the annual report, directors' report (excluding the Remuneration Report) and any other report of management which is required by law to accompany any published financial statements (to the extent that such a report discusses the financial position or operating results) before approval by the Board, including assessing whether the Company’s external reporting is consistent with the Committee members’ information and knowledge, and is adequate for shareholder needs;

(d) review any statements or commentary to be released to the Australian Stock Exchange to accompany the half year or annual financial statements;

(e) review and consider the processes used by management to monitor and ensure compliance with laws, regulations and other requirements relating to external reporting of financial information;

(f) review proposed professional and regulatory pronouncements regarding accounting policies and financial reporting and assess their impact on the Company;

(g) review the process implemented to support the certifications to be provided by the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) as to the truth and fairness of the Company’s financial reports and that those reports are based on a sound system of risk management and internal compliance and control so far as they relate to financial reports;

(h) review and discuss with management and the external auditor any correspondence with regulatory or government bodies which raise material issues regarding the Company’s financial statements and review the results of any governmental or regulatory audits involving material findings which have not otherwise been reviewed by the Board;

(i) review and monitor related party transactions and assess their propriety.

4.2 Risk Management

The Committee will oversee the implementation and review of risk management and related internal compliance and control systems throughout the Company, as follows:

(a) The Committee will review and consider the appropriateness and adequacy of internal processes for determining, monitoring and assessing key risk areas identified by the Board’s financial, operational and business risk management policies, including:

(2) receiving reports concerning material actual and suspected breaches of law, including fraud and theft and assess systems to manage this risk;

(3) assessing whether senior executives, the external auditor and internal auditor have an understanding of the Company's control environment;

(4) assessing whether management has appropriate controls in place for transactions that may carry more than the usual degree of risk accepted by the Company;

(5) assessing the effectiveness and efficiency of the Company’s internal compliance and controls, including the adequacy of disclosure and processes for regular reporting of information, particularly in relation to significant risks; and

(6) reviewing the form of the proposed annual CEO/CFO sign off letter on identification and effective management of material business risks.

(b) The Committee is responsible for approving and monitoring the Company’s whistleblowing policy.

4.3 Authorities for financial risk management

The Committee has full authority to approve:

(a) financial risk management policies in relation to the following:

(1) financial counterparty credit risk;

(2) hedging transactions outside the Market Price Risk Management Policy covering a particular category of price risk exposure up to $50m in any financial year;

(3) country (international trade);

(4) liquidity risk;

(5) guarantees and letters of comfort; and

(6) trade credit policy, including restructuring payment terms;

(b) any credit limit extended to a customer within the authority of the Committee set out in the Company’s Delegation of Authority Policy (DOA Policy);

(c) hedging transactions outside the Market Price Risk Management Policy covering a particular category of price risk exposure within the authority of the Committee as set out in the DOA Policy;

(d) any bank or corporate guarantee or undertaking supporting statutory obligations or the performance of a contract for the supply of goods or services in the ordinary course of business within the authority of the Committee as set out in the DOA Policy; and

(e) any restructure of customer payment obligations that is within the authority of the Committee as set out in the DOA Policy.

4.4 External Audit

The Committee will review and assess key areas relating to the external audit of the company. In particular, the Committee will:

(a) make recommendations to the Board on the appointment, reappointment or replacement of the external auditor;

(b) review and agree with the external auditor the terms of engagement for the external auditor, including fees;

(d) review the scope of the external audit with the external auditor including identified risk areas and approve external audit plans;

(e) review, assess and, as appropriate approve, provision of non-audit services by the external auditor, with particular consideration to the potential to impair, or appear to impair, the external auditor's judgment or independence in respect of the Company and, as appropriate, recommend changes to relevant policies to the Board;

(f) ensure that the internal auditor monitors compliance with the Company’s policy in respect of the provision of non-audit services by the external auditor and periodically reports to the Committee, including on any breaches of the policy;

(g) ensure that the CFO reports to the Committee on a periodic basis regarding:

(1) any non-audit services provided by the auditor; and

(2) the level of fees paid for providing such services.

(h) provide an annual report to the Board with respect to non-audit services (if any), provided by the external auditor during the year, which includes:

(1) amounts paid or payable to the external auditor for those non-audit services;

(2) a statement whether the Committee is satisfied that the provision of those services during the year is compatible with the general standard of independence for auditors; and

(3) the reasons for the Committee’s opinion.

(i) ensure the external auditor is coordinated with internal audit programs;

(j) review and monitor (and, where appropriate, be prepared to challenge, management's responsiveness to the external audit findings; and

(k) provide the external auditors with unrestricted and confidential access to the Managing Director and Chief Executive Officer, the Chairman of the Committee, the Committee or, if deemed appropriate by the external auditors, to the Chairman of the Board.

4.5 Internal Audit

The Committee will review and assess key areas relating to the internal audit of the Company. In particular, the Committee will:

(a) approve the internal auditor, where the internal auditor is an executive of the Company or, where the internal auditor is an external contractor, approve the appointment and the internal auditor's terms of engagement;

(b) review and assess the scope of the audit and the internal audit plan, work program and resources and approve internal audit plans;

(d) on a regular basis, meet with the internal auditor without the presence of management.

4.6 Insurance Programme

The Committee will review and approve all aspects of the Company's insurance programme except for the Directors' and Officers' Liability insurance, which will remain the responsibility of the Board.

4.7 Legal Proceedings

The Committee will regularly receive and review a report regarding all litigation, legal claims or contingencies relating to the Company. The Committee will advise the Board as necessary in relation to any legal risks that could have a material effect on the financial position or operating results of the Company.

4.8 Defined Benefits Superannuation / Retirement Benefits

The Committee shall:

(a) review the structure and performance of the Company’s defined benefit retirement and superannuation plans;

(b) review the performance of the trustees or managers of the Company’s defined benefit retirement and superannuation funds and make recommendations to the Board concerning the appropriateness of the arrangements for managing those retirement and superannuation funds; and

(c) approve variations in the Company’s defined benefit superannuation contribution levels where the annual amount of the contribution is within the authority of the Committee as set out in the DOA Policy.

5 Meetings

5.1 Holding of meetings

(a) The Committee will meet regularly, at the times determined by the Committee Chairman, but no less than four scheduled times a year.

(b) A member of the Committee may request that a meeting of the Committee be convened at any other time.

5.2 Quorum

Two members, present in person or by using any technology, constitute a quorum.

5.3 Attendance at meetings

5.4 Attendance at meetings will be determined by the Committee as contemplated in Rule 3.Committee papers

(a) The Committee Secretary will distribute in advance of a meeting of the Committee an agenda and any related papers to each member of the Committee and any other persons determined by the Committee.

(b) Where a person has a conflict of interest in a matter, the Committee Secretary will provide that person with notice of the matter but, unless the other members of the Committee otherwise determine, will not provide that person with papers in relation to that matter.

5.5 Committee minutes

(a) The Committee Secretary shall prepare minutes of meetings and have them approved by the Committee Chairman.

(b) Minutes of meetings shall be confirmed at the next meeting of the Committee.

6 Committee Review

The Committee shall review its performance periodically.

7 Reporting to the Board

(a) Minutes of each meeting will be submitted to the Board.

(b) The Committee Chairman, or delegate, must report to the Board after each Committee meeting concerning:

(1) the proceedings of the Committee; and

(2) all matters relevant to the Committee's role and responsibilities.

8 Limitations

The Committee does not have responsibility for the matters that are set out in the Board Charter, although the Chairman of the Committee must liaise with the Chairman of the Board on an ongoing basis to ensure that no material matter is overlooked by the two bodies.

The Committee’s principal function is one of review, oversight and monitoring. Without limiting the Committee’s duties as described in this Charter, neither the Committee, as a committee, nor any member of it by virtue of being a member, has the duty to actively seek out activities occurring within the Group that are not compliant with the Group’s policies and procedures, although they have a duty to act promptly if any such activity comes to their attention.

The Committee's role does not extend to risk management in respect to the responsibilities of the Health Safety and Environment Committee, including:

(a) the health and safety of employees;

(b) environmental impact, efficient use of resources, pollution reduction and prevention and product stewardship; and

The Committee:

(a) is not required to personally conduct accounting reviews or audits; and

(b) is entitled to rely on employees of the Company or professional advisers or consultants engaged by the Committee or the Company where:

(1) there are reasonable grounds to believe that the employee, adviser or consultant is reliable and competent; and

(2) the reliance was made in good faith and after making an independent assessment of the information.