AVITA MEDICAL LIMITED (“COMPANY”)
1. Composition of the Audit Committee
The committee is to include at least three (3) members.
At least one member is to have significant, recent and relevant financial experience.
2. Role of the Audit Committee
The role of the Audit Committee is to:
- monitor the integrity of the financial statements of the Company, reviewing significant financial reporting judgments;
- review the Company’s internal financial control system and, unless expressly addressed by a separate risk committee or by the Board itself, risk management systems;
- monitor and review the effectiveness of the Company’s internal audit function (if any);
- monitor and review the external audit function including matters concerning appointment and remuneration, independence and non-audit services.
- perform such other functions as assigned by law, the Company’s constitution, or the Board.
The committee meets at least half yearly, with further meetings on an as required basis.
Minutes of all meetings of the committee are to be kept and the minutes and a report of actions taken or recommended to be given at each subsequent meeting of the full Board.
Committee meetings will be governed by the same rules, as set out in the Company constitution as they apply to the meetings of the Board.
Relevant members of management and the external auditor may be invited to attend meetings.
The committee shall meet with the external auditor without management present, as required.
4. Authority and Resources
The Company is to provide the committee with sufficient resources to undertake its duties, including provision of educational information on accounting policies and other financial topics relevant to the Company, and such other relevant materials requested by the committee.
The committee will have the power to conduct or authorize investigations into any matters within the committee’s scope of responsibilities. The committee will have the authority, as it deems necessary or appropriate, to retain independent legal, accounting or other advisors.
5. Reporting to the Shareholders
The directors’ reports are to contain a separate section that describes the role of the committee and what action it has taken.
The chairperson of the audit committee is to be present at the annual general meeting to answer questions, through the chairperson of the Board.
Annual responsibilities of the committee are as set out in the Audit Committee Action Points (attached).
AUDIT COMMITTEE CHARTER ANNUAL ACTION POINTS
Financial Reporting and Internal Controls
- Review half-year and annual financial statements
- Consider management’s selection of accounting policies and principles
- Consider the external audit of the financial statements and the external auditor’s report thereon
- Consider internal controls including the Company’s policies and procedures to assess, monitor and manage financial risks (and other business risks if authorised)
Annual meeting with External Auditor
- Discuss the Company’s choice of accounting policies and methods, and any recommended changes
- Discuss the adequacy and effectiveness of the Company’s internal controls
- Discuss any significant findings and recommendations of the external auditor and management’s response thereto
- Discuss any difficulties or disputes with management encountered during the course of the audit including any restrictions or access to required information
External Auditor Engagement
- Establish/review criteria for the selection, appointment and rotation of external auditor
- Recommend to the Board to appoint and replace the external auditor and approve the terms on which the external auditor is engaged
- Establish/review permissible services that the external auditor may perform for the company and pre-approve all audit/non-audit services
- Confirm the independence of the external auditor, including reviewing the external auditor’s non-audit services and related fees
- Ensure that the external auditor is requested to attend the AGM of the Company and is available to answer questions from shareholders
Internal Communications and Reporting
- Provide an annual report that includes the committee’s review and discussion of matters with management and the external auditor
- Regularly update the Board about committee activities and make appropriate recommendations
- Ensure the Board is fully aware of matters which may significantly impact the financial conditions or affairs of the business
- Verify the membership of the committee is in accordance with the Audit Committee Charter
- Review the independence of each committee member based on ASX Corporate Governance Guidelines
- Review and update the Audit Committee Charter and Action Points
- Develop and oversee procedures for treating complaints or employee concerns received by the Company regarding accounting, internal accounting controls and auditing matters