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PROPOSED TERMS OF REFERENCE OF THE MGI

AUDIT COMMITTEE
Introduction
Audit Committees are a requirement of Codes of Best Practice including the Report on
Corporate Governance for Mauritius. It is established to assist Council in discharging its
duties. The Committee should not perform an management functions but should mainl
ma!e recommendations to Council for its approval or final decision.
The membership" resources" responsibilities and authorities of the Committee is
stipulated in this terms of reference.
1. Membersi!
1.1 The Committee shall be appointed b Council and shall consist of a C"irm"n
and "t #e"st t$o %&' oter members.
1.& #hilst the Committee itself $ould normall be made up entirel of non%e&ecutive
directors" the 'irector%General" the Registrar and the Internal Auditor $ould be in
attendance. The (ead in charge of the )&ternal Audit and the Bursar ma be
invited to attend as and $hen required. (o$ever" no "ttendee shall have a (ote
at meetings of the Committee.
1.) The Council shall appoint the Committee Chairman $ho shall be a non%e&ecutive
director. (o$ever" the Chairman of Council shall not be the Chairman of the
Committee. In the absence of the Committee Chairman" the remaining members
present shall elect one of the non%e&ecutive members present to chair the meeting.
&. Secret"r*
The Registrar of the Institute or his*her nominee shall be the +ecretar of the
Committee.
). +uorum
The quorum necessar for decisions of the Committee shall be an t$o members
of the Committee present throughout the meeting of the Committee.
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,. Fre-uenc* o. Meetin/s
Meetings of the Committee $ill be held as frequentl as the Committee considers
appropriate but it $ill normall meet not less than four times a ear. The
Committee shall meet quarterl on the -
rd
.rida in /anuar" April" /ul and
0ctober. And at such times as the Chairman of the Committee shall require.
(o$ever" Council or an member thereof" including members of the Committee"
the e&ternal auditors" and the (ead of Internal Audit ma call further meetings.
0. Notice o. Meetin/s
0.1 Meetings of the Committee shall be summoned b the +ecretar of the Committee
at the request of an member thereof.
0.& 1nless other$ise agreed" notice of each meeting confirming the venue" time and
date together $ith an agenda of items to be discussed" shall be for$arded to each
member of the Committee" an other person required to attend and all other non%
e&ecutive directors" no fe$er than 21' $or2in/ d"*s prior to the date of the
meeting.
3. Minutes o. Meetin/s
3.1 The Committee +ecretar shall ta!e minutes of meetings. These shall be
revie$ed and approved b the members of the Committee.
3.& The +ecretar should ascertain" at the beginning of each meeting" the e&istence of
an conflicts of interest and minute them accordingl.
3.) Minutes of Committee meetings shall be circulated promptl to all members of
the Committee and to the Chairman and all members of Council.
1. Duties
1.1 Intern"# Contro# "nd Ris2 M"n"/ement
The Audit Committee is a device to assist Council to achieve corporate ob3ectives
through sound internal control. This $ill include4
Revie$ing the effectiveness of the Institute5s sstems of internal control6
Maintaining proper and adequate accounting records6
Controlling the overall operational and financial reporting environment6
+afeguarding compan5s assets against unauthori7ed use of disposal6
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'irecting and supervising investigations into matters $ithin its scope" for
e&ample" evaluations of the effectiveness of the Institute5s internal control" cases of
emploee fraud" misconduct or conflict of interest.
1.& Intern"# "udit
An important role of the Committee $ill be to monitor and supervise the effective
function of the Internal Audit. This $ill include4
)valuating the performance of internal audit6
Considering the appointment" dismissal or re%assignment of the head of the
internal audit function6
Revie$ing and approving the internal audit charter" internal audit plans and
internal audit5s conclusions $ith regards to internal control6
Revie$ing the adequac of corrective action ta!en in response to significant
internal audit findings6
Revie$ing significant matters reported b the internal audit function6
Revie$ing the ob3ectives and the operations of the internal audit function6
Assessing the adequac of performance of the internal audit function" and the
adequac of available internal audit resources6
Revie$ing the co%operation and co%ordination bet$een the internal and e&ternal
audit functions and co%ordinating the formal internal audit $or! plan $ith e&ternal
auditors to avoid duplication of $or!6
Revie$ing significant differences of opinion bet$een management and the
internal audit function6
)valuating the independence and effectiveness of the internal auditors.
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1.) E4tern"# Audit
The Audit Committee can be useful channel of communication bet$een the e&ternal
auditor and Council. The Committee shall revie$ and discus the follo$ing4
The contents of the management letter6
An intended qualification in the audit report6
An problems regarding the most suitable accounting treatment of contentious
items and the manner and degree of disclosure of an items6
An matters $here the auditor and Council disagree6
An matters to be included in the letter of representation6
Matters pertaining to the auditors5 appointment and remuneration.
1., Fin"nci"# St"tements
The Committee $ill e&amine and revie$ the annual financial statements prior to
submission and approval b Council" focusing mainl on4
The implementation of ne$ sstems6
9itigation matters involving uncertaint6
An changes in accounting policies and practices6
Ma3or 3udgmental areas6
+ignificant ad3ustments resulting from the audit6
Compliance $ith accounting standards and legal requirements6
Ma3or ad3ustments processed at ear end.
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1.0 Etics
The Institute can establish a clearl defined and documented code of ethics. The
directors must declare the nature and e&tent of their interest in contracts. The Committee
$ill be responsible for4
Monitoring the ethical conduct of the Institute" its e&ecutives and senior officials6
Revie$ing an statements on ethical standards or requirements for the Institute
and assisting in developing such standards and requirements6
Compliance $ith the la$ and regulations of an other applicable statute and of
controlling bodies6
Identification of an violations of ethical conduct6 and
)nvironment and social issues.
The Committee $ill also give recommendations on an potential conflict of interest or
questionable situations of a material nature.
5. Re!ortin/ Res!onsibi#ities
The Chairperson of the Committee shall account to Council for its activities and ma!e
recommendations concerning the adoption of the annual financial statements" annual
report and an other matters arising from the above responsibilities.
6 Autorit*
The Committee" in carring out its tas!s under these terms of reference is authori7ed4
6.1 To see! an information it requires from an emploee of the MGI in order to
perform its duties6
6.& To obtain" at the Institute5s e&pense" such outside or other independent
professional advice as it considers necessar6 and
6.) To call an member of staff to be questioned at a meeting of the Committee as
and $hen required.
17. Amendment o. Terms o. Re.erence
;
This Terms of Reference ma be amended b Council as and $hen required.
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