Qantas 2006 Annual Report Download - page 45

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Qantas Annual Report 2006
2006 Corporate Governance Statement
AUDIT COMMITTEE
The Board has an Audit Committee which:
• has three Members who are Independent Non-Executive Directors;
• is chaired by Garry Hounsell, an Independent Non-Executive Director
who is a Fellow of The Institute of Chartered Accountants in Australia
and a Certified Practising Accountant;
• has a written Charter which is available on the Corporate Governance
section of the Qantas website (http://www.qantas.com.au/info/about/
corporateGovernance);
• includes Members who are all financially literate; and
• is responsible for monitoring:
•
business risk management (other than the operational risk
management issues delegated to the Safety, Environment & Security
Committee (SESC));
•
compliance with legal and regulatory obligations (other than the
operational compliance obligations monitored by the SESC);
•
compliance by all employees with all policies including the Qantas
Code of Conduct & Ethics;
•
the integrity of Qantas’ internal control framework;
•
the reliability and integrity of financial information for inclusion in
the Financial Report of Qantas;
•
safeguarding the independence of the internal and external
auditor; and
•
audit, accounting, financial and tax reporting obligations.
The experience and qualifications of Members of the Audit Committee
are detailed on pages 36-39. Membership of and attendance at 2005/06
Audit Committee Meetings are detailed on page 49.
The Board and Audit Committee closely monitor the independence of the
external auditor. Regular reviews occur of the independence safeguards put
in place by the external auditor. As required by section 300(11D)(a) of the
Corporations Act and clause 42 of the Audit Committee Charter, the Audit
Committee has advised the Board that it is appropriate for the following
statement to be included in the 2006 Directors’ Report under the heading
“Non-Audit Services”:
“The Directors are satisfied that:
a. the non-audit services provided during the 2005/06 financial year by
KPMG as the external auditor were compatible with the general standard
of independence for auditors imposed by the Corporations
Act; and
b. any non-audit services provided during the 2005/06 financial year
by KPMG as the external auditor did not compromise the auditor
independence requirements of the Corporations Act for the
following reasons:
•
KPMG services have not involved partners or staff acting in a
managerial or decision-making capacity within the Qantas Group
or been involved in the processing or originating of transactions;
•
KPMG non-audit services have only been provided where Qantas is
satisfied that the related function or process will not have a material
bearing on the audit procedures;
•
KPMG partners and staff involved in the provision of non-audit
services have not participated in associated approval or
authorisation processes;
•
a description of all non-audit services undertaken by KPMG and the
related fees have been reported to the Board to ensure complete
transparency in relation to the services provided; and
•
the declaration required by section 307C of the Corporations Act
confirming independence has been received from KPMG.”
Qantas rotates the lead audit partner every five years and imposes
restrictions on the employment of ex-employees of the external auditor.
Policies are in place to restrict the type of non-audit services which can
be provided by the external auditor and there is a detailed monthly review
of non-audit fees paid to the external auditor.
At each Meeting, the Audit Committee meets privately with
management without the external auditor and with the external auditor
without management.
THE BOARD MAKES TIMELY AND BALANCED DISCLOSURE
Qantas has an established process to ensure that it is in compliance with
its ASX Listing Rule disclosure requirements. This includes a bi-monthly
confirmation by all senior management that their areas have complied with
the Qantas Continuous Disclosure Policy, together with an ongoing
obligation to advise the Company Secretary of any material non-public
information arising in between confirmations.
A copy of the Qantas Continuous Disclosure Policy is available on the
Corporate Governance section of the Qantas website (http://www.qantas.
com.au/info/about/corporateGovernance). Qantas includes commentary
on its financial results in its Annual Report.
THE BOARD RESPECTS THE RIGHTS OF SHAREHOLDERS
Qantas has a Shareholder Communications Policy which promotes effective
communication with shareholders and encourages participation at general
meetings. A copy of the Qantas Shareholder Communications Policy is
available on the Corporate Governance section of the Qantas website
(http://www.qantas.com.au/info/about/corporateGovernance).
Qantas places all market announcements on its website and registered
shareholders receive an email when there is a material announcement.
The 2006 Notice of Meeting and Explanatory Letter is on the Qantas
website and the 2006 AGM will be available for viewing by live webcast.
For shareholders unable to attend, a question form accompanied the Notice
of Meeting, giving shareholders the opportunity to forward questions and
comments to Qantas or the external auditor prior to the AGM.
AUDITOR AT ANNUAL GENERAL MEETING
The external auditor attends the AGM and is available to answer
shareholder questions on:
• the conduct of the audit;
• the preparation and conduct of the auditor’s report;
• the accounting policies adopted by Qantas in relation to the preparation
of the Financial Report; and
• the independence of the auditor in relation to the conduct of the audit.
THE BOARD RECOGNISES AND MANAGES RISK
The businesses operated by Qantas are complex and involve a range of
strategic, operational, fi nancial and legal risks. Recognising this, the Board
has established a sound system of risk oversight and management and internal
control designed to identify, assess, monitor and manage risk.
Policies have been developed that include components relating to oversight,
risk profile, risk management and assessing the effectiveness of risk
oversight and management. Qantas is continually aligning its system of risk
management, internal compliance and control with principles included in
the Australian/New Zealand Standard on Risk Management (AS/NZS
4360:2004) and the COSO (the Committee of Sponsoring Organisations
of the Treadway Commission) framework for evaluating internal controls.