Qantas 2007 Annual Report Download - page 49

47Qantas |Annual Report 2007
2007 Corporate Governance Statement
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 2007 Directors’ Report under the heading
“Non-Audit Services”:
“The Directors are satisfied that:
the non-audit services provided during the 2006/07 financial year by
KPMG as the external auditor were compatible with the general
standard of independence for auditors imposed by the Corporations
Act; and
any non-audit services provided during the 2006/07 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.
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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 2007 Notice of Meeting and Explanatory Letter will be posted on the
Qantas website and the 2007 AGM will be available for viewing by live
webcast. For shareholders unable to attend, a question form will
accompany 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 content 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, 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.
The Audit Committee is primarily responsible for monitoring business risks
whilst the Safety Environment and Security Committee is primarily
responsible for monitoring operational risks. Both Board Committees are
responsible for monitoring compliance with legal and regulatory obligations.
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.
Safety, Environment and Security Committee
In 1994, the Board established the SESC which:
has four Members, the Chief Executive Officer and three Independent
Non-Executive Directors;
is chaired by Mike Codd, an Independent Non-Executive Director;
has a written Charter which is available on the Corporate Governance
section of the Qantas website:
(http://www.qantas.com.au/info/about/corporateGovernance); and
is responsible for monitoring:
safety, occupational health, the protection of the environment
and operational security;
operational risk management (other than the business risk
management issues delegated to the Audit Committee) to ensure
that the appropriate risk management procedures are in place to
protect the airline, its passengers, its employees and the
community; and
compliance with all operational legal and regulatory obligations
(other than the business compliance obligations monitored by the
Audit Committee).
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