Regulations of the Audit Committee A A A


Regulations of the Audit Committee of the Supervisory Board of Izostal S.A.



I. General provisions

 

1. These Regulations of the Audit Committee of the Supervisory Board of IZOSTAL S.A. are the primary document which defines the role, responsibility and the principles based on which the Audit Committee functions in the Company.
2. Audit Committee supports the activities of the Supervisory Board and is an advisory body acting collectively as a part of the Supervisory Board of IZOSTAL S.A.
3. Audit Committee tasks are performed by presenting the Supervisory Board with recommendations, motions, opinions and reports in form of resolutions passed by the Audit Committee. 

 

II. Composition of the Audit Committee

 

1. Audit Committee is composed of 3 up to 5 members appointed by the Supervisory Board from among its members.
2. At least one member of the Audit Committee should satisfy the criteria of independence and be qualified in accounting or financial audit. Provisions of art. 56 clause 3 items 1, 3 & 5 of the Act of May 7, 2009 on chartered auditors and their management, entities authorized to examine financial statements, and on public supervision regulate the criteria of independence to be satisfied by an audit committee member.
3. Audit Committee appoints from among its members the President, Vice President and the Secretary of the Committee.

 

III. Duties of the Audit Committee

 

1. Duties of the audit committee include the  monitoring of the financial reporting process and the performance of financial audit activities, and monitoring the efficiency of internal control systems, internal audit and risk management, in particular:

1) recommending the Supervisory Board the appointment of a chartered auditor to audit the Company’s financial statements, including the monitoring of the independence of a chartered auditor and the entity authorized to audit financial statements,
2) discussing the type and scope of the audit with the Company's chartered auditors before each audit of an annual financial statement, and monitoring the work of experts,  
3) discussing all problems and objections which may arise in connection with the audit of financial statements,
4) analyzing comments made by the Company's chartered auditors addressed to the Management Board, and the Management Board's response,
5) monitoring the effectiveness of internal control systems, internal audit and risk management,
6) monitoring the financial reporting process;
7) monitoring the performance of financial audit activities,
8) considering all other issues related to the Company's audit.
9) presenting the Supervisory Board with an annual report on its activities.

2. Duties of the Audit Committee also include the development of an annual schedule of activities which defines basic duties of the Audit Committee in a given financial year. The schedule is then verified and adopted by the Supervisory Board.

 

IV. Powers of the Audit Committee

 

1. To perform its activities, the Audit Committee has access to all kinds of information concerning its scope of activity.
2. Audit Committee may initiate special tasks in areas coinciding with its scope of duties.  Audit Committee is obliged to inform the Company's Management Board about initiating this type of activities, the performance of which may be entrusted to the Company’s organizational units.
3. In justified cases the Audit Committee has the right to seek the opinion of external entities at the Company’s expense as regards areas supervised by the Audit Committee provided that consent of the Supervisory Board is obtained in advance.

 

V. The functioning of the Audit Committee

 

1. The work of the Committee is managed by the President of the Audit Committee, or Vice President in their absence.
2. Meetings of the Audit Committee should be held not less frequently than once every six months, in particular in the period of preparing annual and interim financial statements of the Company.
3. Audit Committee meetings are convened by its President. Information on convening a meeting, including the agenda should be filed with the Vice President of the Committee and the Committee Secretary and other Supervisory Board members not later than 7 (seven) days before the meeting, and in urgent matters not later than 1 (one) day before the meeting.
4. All Supervisory Board members may attend Audit Committee meetings.
5. The President of the Audit Committee may invite Management Board members, Company employees and other persons, whose participation in the meeting is necessary for the performance of the Committee tasks, to Committee meetings.
6. President defines the agenda of the Audit Committee meeting, and supervises the distribution of materials and preparation of minutes of Audit Committee meetings.
7. President may appoint a Recording Clerk of the Audit Committee responsible in particular for preparing minutes of Audit Committee meetings.
8. The schedule of regular meetings, as well as main items of the agenda are annually agreed by the Audit Committee and approved by the Supervisory Board. Additional meetings may be held at the request of any member of the Audit Committee, Management Board and the Supervisory Board.   
9. Recommendations, motions, opinions and assessments of the Audit Committee are accepted by way of a resolution and are presented to the Supervisory Board by the President of the Audit Committee with relevant information passed to the Management Board.
10. Resolutions of the Committee are passed by ordinary majority of votes.  In the event of a tie vote, the President of the Committee shall have the casting vote. At least two members of the Audit Committee must be present for resolutions to be valid.
11. Audit Committee members may attend the Committee meetings and vote on resolutions either personally or under a special procedure i.e.:
a) by casting their vote in writing through the agency of another Committee member.  Votes in writing may not be cast on issues introduced to the agenda at the Committee meeting.
b) by circulation (written procedure),
c) through remote telecommunication means i.e. phone and fax.

 

VI. Final provisions

 

1. Office assistance and technical services for Audit Committee are provided by the Company.
2. These Regulations come into force once the content is approved by the Company's Supervisory Board.

 

Zawadzkie, February 28, 2011.

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Opolska 29, 47-113 Kolonowskie, Poland Fax +48 77 405 65 01
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