1. Purpose
    1. The Audit and Risk Committee (“the Committee”) is a committee of NetComm Wireless Limited (“NetComm Wireless”) Board (“the Board”). The Committee’s primary functions are to:
      1. Review the integrity of NetComm Wireless’s financial information and systems, internal and external reporting;
      2. Review and assess the external auditors’ activities, scope and independence;
      3. Review the management process for the identification of significant business risks and exposures and review and assess the adequacy of management information and internal control structures; and
      4. Provide assurance to the full Board that NetComm Wireless is adequately managing risks relating to corporate governance and business operations and is maintaining appropriate controls against conflicts of interest and fraud.
    2. Further details on the duties and responsibilities of the Committee are outlined in section 10 and Appendix A.
  2. Membership and Term
    1. The Committee shall consist of a minimum of 3 non-executive directors.
    2. The Board may invite suitably qualified independent persons who are not directors of the company to serve on this Committee.
    3. The term of appointment is for a period of no more than one year, with Committee members generally being eligible for re-appointment subject to the composition requirements of the Committee.
    4. The effect of ceasing to be a director of the Board is the automatic termination of appointment as a member of the Committee.
    5. The duties and responsibilities of a member of the Committee shall be in addition to those duties set out for a director of the Board.
    6. Committee members will have a working familiarity with basic finance accounting practices. It is appropriate that members of the Committee have a range of different backgrounds, skills and experiences, having due regard to the operational, financial and strategic risk profile of NetComm Wireless. At least one member of the Committee should have accounting or related financial management expertise and at least one member should have a detailed understanding of the industry in which NetComm Wireless operates.
    7. Committee members are appointed by the Board. Membership of the Committee is disclosed in the Annual Report.
  3. Chairman
    1. The Chairman of the Committee will be the person appointed as Chairman by the Board. The Chairman may not be an executive director.
    2. Should the Chairman be absent from a meeting and no acting Chairman has been appointed, the members of the Committee present at the meeting shall choose one of the other members of the Committee to chair that particular meeting.
  4. Meetings
    1. The Committee may, with the approval of the Chairman, conduct meetings by telephone provided that all Committee members involved in the meeting are able to participate in discussion.
    2. As a minimum, the Committee shall meet two times per year.
    3. In addition, the Chairman will call a meeting of the Committee if so requested by any member of the Committee, by the external auditor or by the Chairman of the Board.
    4. Without the presence of management, the Chairman of the Committee meets at least annually with the external auditor. Additionally, the Committee sets aside time at each meeting for private discussion with the external auditor present.
  5. Attendance at Meetings and Quorum
    1. All members of the Board have a right of attendance at meetings. However, no member of the Board is entitled to attend that part of a meeting at which an act or omission of that director or a contract, arrangement or undertaking involving or potentially involving that director or a related party of that director is being investigated or discussed.
    2. Notwithstanding the above, if, in the opinion of the Committee, their investigation or discussion will be assisted by hearing from the interested director, the Committee may invite that director to address the Committee. The Committee shall give fair consideration to that address. The director will not, however, be invited to take part in the deliberations following that address.
    3. The Managing Director attends each meeting. The CFO also attends each meeting of the Committee. Other NetComm Wireless executives and/or parties external to NetComm Wireless may be invited to attend any meeting of the Committee.
    4. The external audit engagement partner attends meetings of the Committee.
    5. The quorum for a meeting is two members or any greater number determined by the Committee from time to time.
  6. Secretary
    1. The Company Secretary of NetComm Wireless shall act as Secretary of the Committee.
  7. Scope, Access and Authority
    1. The activities of the Committee are in relation to NetComm Wireless. As directed by the Board, the Committee may also provide advice to other entities related to NetComm Wireless.
    2. The Committee has direct access to NetComm Wireless’s external auditor. It has the authority to seek any information it requires to carry out its duties from any officer or employee of NetComm Wireless and such officers or employees shall be instructed by the Board of the company employing them to cooperate fully in the provision of such information.
    3. The Committee has the authority to consult any independent professional adviser it considers appropriate to assist it in meeting its responsibilities.
    4. In line with the “Conflict Escalation” procedures referred to in NetComm Wireless Code of Conduct, any officer or employee of NetComm Wireless has access to the Committee’s Chairman.
  8. Reporting
    1. Proceedings of all meetings are to be minuted and signed by the Chairman or the chair of the Committee meeting. Minutes of all Committee meetings are to be circulated to the Board.
    2. The Committee, through its Chairman, reports to the Board at the earliest possible Board meeting after each Committee meeting. The Chairman will summarise the issues discussed at the meeting.
    3. In addition, each year, the Chairman of the Committee submits two summary reports to the Board. The relevant report is submitted to the respective Board meeting that approves the:
      1. half year financial statements, and
      2. the full year financial statements.
    4. The reports will summarise the Committee’s activities during the period.
    5. Through the above mechanisms, all matters relevant to the Committee’s role and responsibilities will be reported to the Board.
  9. Performance and fees
    1. The Committee’s performance will be reviewed through the Board’s annual performance appraisal process.
    2. Committee members are entitled to receive remuneration as determined from time to time by the Nomination and Remuneration Committee.
  10. Primary Duties
    1. Financial and External Reporting
      1. The Committee is expected to review all audited NetComm Wireless Financial statements intended for publication prior to recommending their approval by the Board.
      2. In undertaking reviews of financial and external reporting, the Committee will do so from the shareholder’s perspective, with a view to ensuring the information is adequate for their needs.
    2. Audit Activities, Audit Scope and Audit Independence
      1. The key responsibility of the Committee in relation to the activities of the external audit is to ensure that the audit approach covers all financial statement areas where there is a risk of material misstatement and that audit activities are carried out throughout NetComm Wireless in the most effective, efficient and comprehensive manner. The Committee is responsible for ensuring that the external auditor meets the required standards for auditor independence.
    3. Risk Management and Internal Control Structure
      1. Within the area of risk management and internal control, the Committee is responsible for monitoring and reviewing the adequacy and effectiveness of the risk management and internal control processes implemented by management (including the processes supporting external reporting) and advise on significant changes to that structure so as to obtain reasonable assurance that NetComm Wireless’s assets are safeguarded and that reliable financial records are maintained.
    4. Corporate Governance and Integrity
      1. The Committee is responsible for overviewing management’s application of the ASX Corporate Governance Council Guidelines in respect of financial reporting and risk oversight.
      2. The Committee provides assurance that NetComm Wireless is adequately managing risk relating to corporate governance and market integrity and is maintaining appropriate controls against conflicts of interest and fraud.
  11. Review of Charter
    1. The Committee’s charter is reviewed annually by the Committee to ensure it remains consistent with the Committee’s authority, objectives and responsibilities.
    2. Changes to the charter are recommended by the Committee and approved by the Board.
  12. 12. Publication of Charter
    1. Key features of the charter will be outlined in the Corporate Governance section of the annual report to shareholders. A copy of this charter is available at www.netcommwireless.com. This charter is to be made available to shareholders of NetComm Wireless upon request.