Qantas 2005 Annual Report Download - page 40

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(b) any non-audit services provided during the 2004/05 financial
year by KPMG as the external auditor did not compromise the
auditor independence requirements of the Corporations Act
for the following reasons:
(i) 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;
(ii) 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;
(iii) KPMG partners and staff involved in the provision of
non-audit services have not participated in associated
approval or authorisation processes;
(iv) 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
(v) 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
monthly confirmation by all senior management that their areas
have complied with the Qantas Continuous Disclosure Policy.
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 an effective Shareholder Communications Policy
which promotes effective communication with shareholders and
encourages effective 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 2005 Notice of Meeting and Explanatory Letter is on the
Qantas website and the 2005 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:
x the conduct of the audit;
x the preparation and conduct of the auditor’s report;
x the accounting policies adopted by Qantas in relation to the
preparation of the financial statements; and
x 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, financial 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.
INTERNAL AUDIT
Qantas has an effective Internal Audit function which is materially
involved in risk identification and management. The Internal Audit
function is independent of the external auditor, has full access to
management and the right to seek information and explanation.
The Audit Committee oversees the scope of the Internal Audit and
has access to the Head of Internal Audit without the presence of
management.
RISK MANAGEMENT EXECUTIVE COMMITTEE
Qantas has established a Risk Management Executive Committee
(RMEC) which is made up of all Members of the Executive
Committee. The RMEC meets regularly to identify all major risks,
ensure appropriate risk management plans are in place and to
monitor the effectiveness of the implementation of the risk
management plans. The RMEC prepares a monthly Corporate Risk
Management and Internal Audit Activity Report for the Board
which is reviewed in detail by both the Audit Committee and
the SESC.
Spirit of Australia
~2005 Corporate Governance Statement~~