Austin Exploration Limited Audit and Risk Management Committee

The Board has overall responsibility for the Company’s system of risk oversight and management. The Company has put in place certain procedures to ensure effective and efficient operations to assist to identify, analyze and measure risks and to manage the risk of failure to achieve its business objectives in order to protect its assets and interests and to ensure the integrity of reporting. While these procedures minimize losses and maximize opportunities, those procedures cannot however guarantee assurance against a risk of material loss.

To assist in discharging its responsibility for risk management, the Board has a framework comprising various policies and practices. The policies and practices fall into a number of categories that include financial planning and management.

The Company presents financial statements to the ASX half yearly. A detailed financial budget is put forward to the Board by management and is approved and adopted as the annual budget. Regular management accounts are prepared to compare actual results against budget. Forecasts are prepared and revised on a regular basis.

The Audit Committee reports on its activities to the Board;

limits of authority: The Company has policies and practices in place specifying delegated authority and limits of authority in areas such as its hedging activities and capital expenditure;
operational reporting: The Board receives regular reports on the Company’s main operations including operations, production and development, exploration and appraisal, corporate and corporate opportunities;
special reporting: The Board receives regular reports on issues concerning occupational health and safety, environment and cultural heritage, corporate risk and insurance, human resources and administration; and
corporate opportunity reviews: The Company has practices in place to review new corporate opportunities. They include, in the case of new acquisitions detailed due diligence exercises and budgeting.

The Company also engages specialized contractors and external advisers including external auditors to assist with identifying and managing risk issues for the Company.

In accordance with best practice, for the annual and half- yearly financial statements, the Managing Director and the Chief Financial Officer provide to the Board a written certificate stating that:

the integrity of the financial statements are founded on a sound system of risk management and internal compliance and control, which in all material respects, implements the policies and arrangements assumed by the Board; and
the risk management and internal compliance and control systems of the Company are operating efficiently and effectively, in all material respects, based on criteria for effective internal control established in the Company’s policies and procedures manual.

The Company reviews regularly and at least annually, and where required, makes improvements to its risk management and internal compliance and control systems.