Audit, Risk, & Compliance Committee
Each of the BBP Boards have established an Audit, Risk & Compliance Committee. Each Committee has three Directors with a majority of these being independent non-executives. The Chairman of the Committees is independent and is not the Chairman of the BBP Boards.
The respective BBP Boards and Audit, Risk & Compliance Committees have adopted Charters for each Committee. The Charters identify the objectives of the Committees as:
- assisting the Boards fulfil their oversight responsibilities for the financial reporting process, the system of internal control relating to the financial performance of BBP, and the audit process;
- implementing and supervising the risk management framework; and
- specifically for the Babcock & Brown Power Trust (BBPT), assisting the Board of the Responsible Entity to discharge its responsibilities under the Compliance Plan.
The Charters outline the responsibilities of the respective Audit, Risk & Compliance Committees, including:
- overseeing the financial reporting process of the BBP entities to ensure the financial statements reflect appropriate accounting policies, principles, and laws;
- reviewing the effectiveness of the internal controls and risk management systems established by the BBP entities to ensure risks are appropriately identified, assessed and managed;
- in connection with the approval of the BBP full year financial statements, reviewing the CEO and CFO's sign-offs to the BBP Boards in relation to the accuracy of the financial statements and the adequacy and effectiveness of the risk management and control systems established;
- reviewing the external financial Auditors' proposed audit scope and approach, as well as the results of the financial audits undertaken;
- meeting separately with the external Auditor, where appropriate, in the absence of management;
- reviewing any non-audit services provided by the external Auditor to ensure that these services are consistent with maintaining external audit independence; and
- specifically for BBPT, monitoring the compliance of the Responsible Entity with BBPT's Compliance Plan and reporting its findings to the RE Board.
Other matters incorporated within the Committee Charters include the authority of the Committees, reporting responsibilities to the BBP Boards, composition of the Committees, and the meeting/procedural requirements of the Committees.