Annual Report 200432
relationships between the
auditors and the Company and
confirming compliance with all
professional and regulatory
requirements relating to
auditor independence; and 
• referring matters of concern to
the Board, as appropriate, and
considering issues which may
impact on the financial reports
of the Company.
In order to ensure that truth 
and fairness is reflected in the
preparation and publication of
the Company’s financial reports,
the Audit Committee reviews the
written statement of the CEO and
CFO to the Board that the
Consolidated Financial Report
presents a true and fair view, 
in all material respects, of the
financial condition and
operational results of the Santos
Group and is in accordance with
Accounting Standards. This
Statement also confirms that:
• the Consolidated Financial
Report is founded on a sound
system of risk management
and internal compliance and
control, which implements the
policies adopted by the Board;
and
• the Company’s risk
management and internal
control systems, to the extent
they relate to financial
reporting, are operating
effectively in all material
respects.
The Chairman of the Audit
Committee provides, and
addresses, a written report
together with the minutes and
recommendations of the Audit
Committee at the next Board
Meeting. Similar procedures
apply to all other Committees 
of the Board.
6.3 Audit Committee Charter
and Independence of Auditors
The Board has adopted a policy
in relation to the provision of
non-audit services by the
Company’s external auditor that
is based on the principle that
work that may detract from the
external auditor’s independence
and impartiality, or be perceived
as doing so, should not be
carried out by the external
auditor. The Audit Committee
Charter clearly identifies those
services that the external auditor
may not provide, those that may
be supplied and those that
require specific approval of the
Chairman of the Audit
Committee, in consultation with
other members of the Committee. 
It also provides that:
• the Board will not invite any
past or present lead audit
partner of the firm currently
engaged as the Company’s
external auditor to fill a
vacancy on the Board; 
• the lead audit partner will be
required to rotate off the audit
after a maximum of five years
and there will be a period of
at least three years before
that partner can again be
involved in the Company’s
audit; and 
• internal audit function, if
outsourced, will be provided
by a firm other than the
external audit firm. 
These provisions reflect the
current behaviours expected of
the world’s leading corporations
and are consistent with the
ethical values and integrity of
the Company.
The Chairman of the Audit
Committee provides the Board
with a statement clarifying that
the provision of non-audit
services by the external auditors
is compatible with the general
standard of independence for
auditors.
7. FINANCE COMMITTEE
The role of the Finance
Committee is documented in a
Charter, approved by the Board,
and includes responsibility for
considering and making
recommendations to the Board
on the Company’s capital
management strategy and the
Company’s funding requirements
and specific funding proposals.
The Committee also has
responsibility for formulating and
monitoring compliance with
treasury policies and practices
and the management of credit,
liquidity and commodity market
risks.
The current members of the
Finance Committee, all of whom
are independent non-executive
Directors, are: Mr S Gerlach
(Chairman), Mr P C Barnett and
Mr G W McGregor.
8. RISK MANAGEMENT
An Enterprise Wide Risk
Management approach forms the
cornerstone of Risk Management
activities of the Company and is
based on the relevant Australian
Standard (AS/NZS 4360 : 2004). 
This approach is incorporated in
the Company’s Risk Management
Policy, and aims to ensure that
major business risks facing the
Company have been consistently
identified, analysed and
evaluated, and that active
management plans and controls