CORPORATE GOVERNANCE STATEMENT CONT. Audit Committee The Board has established an Audit Committee, which operates under a charter approved by the Board. It is the Board’s responsibility to ensure  that an effective internal control framework exists within the entity. This includes internal controls to deal with both the effectiveness and efficiency  of significant business processes, the safeguarding of assets, the maintenance of proper accounting records, and the reliability of financial  information as well as non-financial considerations such as the benchmarking of operational key performance indicators. The Board has delegated  responsibility for establishing and maintaining a framework of internal control and ethical standards to the Audit Committee. The members of the Audit Committee during the three months to 31 March 2013 were: Mr. S. Black (Chair)  Mr. D. McGauchie Mr. D. Crombie All members of the Audit Committee are non-executive directors. The Chair of the Audit Committee liaises with the Chair of the Risk and Compliance Committee on those matters where both Committees have  common responsibilities which include risk management, compliance and internal control. The Chair of the Risk and Compliance Committee has a  standing invitation to attend each Audit Committee meeting. The members of the Audit Committee and their qualifications are shown in this annual report on pages 5 to 8 of the Directors’ Report.  For details on the number of meetings of the Audit Committee held during the year and the attendees at those meetings, refer to the  Directors’ Report. For additional details regarding the Audit Committee including a copy of its charter, please refer to our website. The Board and Management have continued to demonstrate their focus and commitment to managing material business risks in order to meet  sustainability, profitability and stakeholder goals. A culture of transparency, analysis and proper action underpin the success of risk management at  AACo.  Risk and Compliance Committee The Chief Risk Officer and Management have supported the Risk and Compliance Committee in helping the Board fulfil its commitment to oversee  the Company’s risk and compliance profile and respond quickly to changes in the risk and compliance landscape facing the Company. The Risk  and Compliance Committee, made up of three Board members, met twice during the three months to 31 March 2013 and was attended by the  Managing Director/CEO, the CRO and by other invited staff. The members of the Risk and Compliance Committee during the three months to 31 March 2013 were: Mr. T. Keene (Chair)  Mr. D. McGauchie (resigned on 30 January 2013)  Mr. A. Paliulis  Mr. S. Black (appointed on 30 January 2013)  Dr. Jeffrey Carmichael  1  (resigned on 8 February 2013)  1  External consultant The Board is responsible for the overall corporate governance and risk management of AACo. It has responsibility for overseeing AACo’s risk  profile, for approving and overseeing the framework for managing risk and for setting appropriate tolerance levels for each risk group. The tasks of  undertaking and assessing risk management and internal control effectiveness are delegated to Management through the Managing Director/CEO,  including responsibility for design, day-to-day implementation, and management of the Company’s risk management and internal control systems.  Management reports to the Risk and Compliance Committee and then to the Board on the Company’s key risks and the extent to which it believes  these risks are being adequately managed.  At least once a year, the Company carries out a formal risk review, including revision of insurance policies that the Company has in place.  Summaries of the Company’s material business risks are kept in the Enterprise Risk Register which was reviewed and approved by the Board  during the period. Each risk is linked to a business objective and a tolerance for risk is determined by the Board. The Register contains risk  summaries which indicate the risk drivers, the inherent risk, the current controls, the mitigants in place to manage those risks and the residual risk  after treatment. Also included in the Register is the plotting of risks on a risk matrix by inherent risk. The Company has a risk aware culture, and all  members of the Management team have a responsibility for risk in their area. 46 Australian Agricultural Company Limited