InnoCare Pharma Limited released an updated Terms of Reference for its Audit Committee, detailing expanded governance structures, membership requirements and oversight responsibilities.
Key Highlights
1. Committee Composition and Tenure • The Audit Committee must comprise at least three non-executive directors, with a majority being independent and at least one possessing professional accounting or financial expertise. • A former partner of the external auditing firm is barred from committee service for two years after ending the partnership or financial interest. • The Board appoints the chairperson—who must be an independent non-executive director—and may remove or replace members at its discretion.
2. Meeting Protocols • The committee will meet a minimum of twice annually; external auditors can request additional meetings when necessary. • Quorum requires two members, including at least one independent non-executive director. • At least once each year, members will meet the internal and external auditors without executive directors present.
3. Expanded Authority • Empowered to investigate any activity within its mandate, request information from employees, and engage independent professional advisers at the company’s expense. • Holds exclusive authority to set selection criteria, appoint, and define terms for external auditors.
4. Core Duties • Recommend appointment, reappointment or removal of external auditors, and approve their remuneration and scope of engagement. • Monitor auditor independence, effectiveness of the audit process and develop policies governing non-audit services. • Review integrity of annual, half-year and, if prepared, quarterly financial statements, with emphasis on accounting policy changes, major judgments, significant adjustments, going-concern assumptions and regulatory compliance. • Oversee financial controls, risk management and internal control systems, including adequacy of resources and staff qualifications in the finance function. • Ensure proper coordination between internal and external auditors and evaluate the effectiveness of internal audit resources. • Establish and monitor whistle-blowing mechanisms for employees, customers and suppliers to report improprieties confidentially.
5. Reporting and Transparency • Full minutes will be maintained and made accessible to directors. • The committee chairperson will address shareholder queries on audit matters at the annual general meeting. • Any divergence between the Board and the committee on auditor appointment must be disclosed in the Corporate Governance Report.
6. Implementation • The revised charter takes effect upon Board approval. Future inconsistencies with prevailing regulations will default to the higher governing rules.
The updated charter formalises comprehensive safeguards for financial reporting integrity and risk management, reinforcing InnoCare Pharma’s commitment to robust corporate governance.
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