The Audit and Risk Committee (‘Committee’/’ARC’) shall be a committee of the Board.

1. Purpose

The purpose of the Committee is to:

1.1 assist the Board in fulfilling its responsibilities for Accordant’s financial statements and external financial reporting.

1.2 assist the Board in fulfilling its climate related disclosures in accordance with the Financial Markets Conduct Act 2013 and the NZX Listing Rules.

1.3 assist the Board in ensuring that the ability and independence of the external auditors to carry out their statutory audit role is not impaired, and could reasonably be perceived to be impaired; and

1.4 assist the Board in ensuring appropriate accounting policies and internal controls are established and maintained and assist the Board in ensuring the effective and efficient management of all business risks.

2. Duties and responsibilities

2.1 The Committee does not take actions or make decisions on behalf of the Board.

2.2 Management retains responsibility for the implementation and operation of adequate risk management, internal control and audit systems within Accordant. The Committee has delegated authority from the Board to oversee and monitor these activities.

2.3 The Board as a whole is responsible for determining the nature and extent of the principle risks it is willing to take in achieving its strategic objectives and will consider financial, strategic, environment (including climate), social and governance risks and opportunities in doing so. The Committee provides additional monitoring of the Company’s risk management processes and provides the Board with assurance that all key risks have been appropriately identified, managed, and reported to the Board. The Board is also responsible for the accuracy and relevance of Accordant’s financial statements, however, the Committee provides an additional, and more specialised oversight of the financial reporting process.

2.4 The existence and operation of the Committee does not relieve any director from having an appropriate knowledge and understanding of Accordant’s business, value drivers and risks, or from reading, carefully considering and raising any questions relating to its accounts and financial statements, including forecasts, dividends and dividend policy. The existence of the Committee enhances the credibility and reliability of Accordant’s financial information and is an integral component of good risk management practice.

2.5 The Board has delegated certain functions to the Committee which it is responsible for, which include, in addition to any other matter put to the Committee for consideration by the Board, matters relating to the external audit of Accordant’s affairs, financial reporting and risk assurance.

3. External audit

3.1 The Committee is responsible for monitoring all aspects of the external audit of Accordant’s affairs including:

3.1.1 considering and making recommendations to the Board on the appointment, removal and/or replacement (as required) of the auditors (including their ability and independence), and the audit fee.

3.1.2 overseeing the independence of the external auditors and addressing issues of auditor independence.

3.1.3 discussing with the auditors, before the commencement of each audit, the nature and scope of their audit.

3.1.4 reviewing the auditors’ service delivery plan.

3.1.5 reviewing Accordant’s letter of representation to the auditors.

3.1.6 discussing with the auditors any problems, reservations or issues arising from the audit and referring matters of a material or serious nature to the Board.

3.1.7 reviewing external audit reports to ensure that, where deficiencies or breakdowns in controls and procedures have been identified, appropriate and prompt remedial action is instituted.

3.1.8 having direct communication with and unrestricted access to the auditors and any internal auditors or accountants.

3.1.9 ensuring that the external auditor or key audit partner is rotated as required; and

3.1.10 meeting regularly to monitor and review the independent and internal auditing practices.

4. Financial reporting

In respect of financial reporting matters, the Committee is responsible for:

4.1 reviewing the half year and annual preliminary results and financial statements, and any other financial statements to be released by the Company, before submission to the Board, focusing particularly on:

(a) any change in financial or accounting policies and practices.

(b) climate related disclosures.

(c) major judgemental areas.

(d) significant adjustments.

(e) solvency.

(f) the going concern assumption.

(g) compliance with accounting standards; and

(h) compliance with legal, stock exchange and other regulatory requirements.

4.2 reviewing any non-routine statements to the NZX, including announcements to NZX concerning results.

4.3 reviewing the financial reports and advising all directors whether they comply with the appropriate laws and regulations.

4.4 promoting and reviewing the integrity of Accordant’s financial reporting; and

4.5 creating, managing and monitoring processes so the Board is properly and regularly informed and updated on corporate finance matters.

5. Risk assurance

In respect of matters relating to risk assurance, the Committee is responsible for:

5.1 monitoring and regularly reviewing Accordant’s delegated authorities.

5.2 considering the findings of any internal investigations and management’s response thereto.

5.3 monitoring compliance by Accordant with its constitution, applicable laws, regulations and stock exchange requirements.

5.4 establishing and regularly reviewing a procedure to identify other situations or circumstances in which the Company may be materially at risk and initiating appropriate action through the Board or the Chief Executive Officer.

5.5 overseeing and monitoring that management implements and operates adequate risk assurance, internal control and audit systems (including, for example, by developing and maintaining a risk register);

5.6 regularly reviewing the internal controls and systems, insurance and treasury management policies and practices.

5.7 putting in place and reviewing arrangements by which employees may, in confidence, raise concerns about possible improprieties in the financial reporting and other matters.

5.8 regularly reporting to the Board on the state, nature and effectiveness of the Company’s risk assurance policies and practices.

5.9 to maintain an understanding of the strategic risks to the Company and the assurance and other mechanisms in place to manage those risks;

5.10 regularly reporting to the Board on the operation of the Company’s risk management and internal control processes; and

5.11 providing sufficient information to the Board to allow the Board to report annually to shareholders and stakeholders on risk identification and management procedures and relevant internal controls.

6. Membership

6.1 Members of the Committee shall be appointed by the Board and shall comprise:

6.1.1 solely directors of the Company.

6.1.2 a minimum of three directors and a maximum of five directors.

6.1.3 a majority of independent directors.

6.1.4 at least one member who has an accounting or financial background.

6.2 A member of the Committee will be deemed to have adequate accounting or financial background if he or she:

6.2.1 is a member of Chartered Accountants Australia and New Zealand; or

6.2.2 has held a chief financial officer position at an Issuer (as defined in the NZX Listing Rules) for a period of greater than 24 months; or

6.2.3 has successfully completed a course approved by NZX or the Institute of Directors for risk assurance and Audit Committee membership; or

6.2.4 has the experience and/or qualifications deemed satisfactory by the Board.

6.3 The Board shall appoint a Chair of the Committee from among its members. The Chair of the Committee shall be independent, must not be the Chair of the Board, and shall not otherwise have a long-standing association with the Company’s external audit firm as a current, or retired, audit partner or senior manager at the firm. A Chair will generally be perceived to be independent if there has been a period of at least three years between previously being employed by the external audit firm and serving as Chair of the Committee. The appointment and removal of the Committee members shall be the responsibility of the Board.

7. Meetings

7.1 The Committee shall meet as it deems necessary to properly fulfil its obligations and discharge its duties. The working presumption will be that it will meet once in the lead up to completion of the half year and full year results and at least once per year on matters relating to risk management.

7.2 A quorum of members of the Committee shall be a majority of its members.

7.3 Committee may have in attendance such members of management and such other persons including external advisers, as it considers necessary to provide appropriate information and advice.

7.4 All directors who are not members of the Committee are entitled to attend the meeting however employees shall only be entitled to attend meetings at the invitation of the Committee.

7.5 Reasonable notice of meetings and the business to be conducted shall be given to the members and all other attendees of meetings.

7.6 The external auditors may be invited to attend, at least in part, meetings of the Committee and there shall be an opportunity at those meetings for the Committee to speak with the external auditor without the Chief Executive Officer or management present.

8. Authorities

8.1 The Committee will make recommendations to the Board on all matters requiring its decision. The Committee does not have the power or authority to make a decision in the Board’s name or on its behalf.

8.2 The Committee is authorised by the Board, at the Company’s expense, to obtain such outside legal or other independent information and advice including market surveys and reports, and to consult with such management and executive search consultants and other outside advisers with relevant experience and expertise, as it thinks necessary for carrying out its responsibilities.

9. Review of the Committee

The Committee will undertake an annual self-review of its duties and responsibilities. Such duties and responsibilities will also be reviewed (as against this Charter) by the Board, the Chief Executive Officer and any other person the Board considers appropriate. The Committee will regularly review this Charter and make recommendations on any changes to the Board.

10. Reporting Procedures

The Chair of the Committee will report the Committee’s findings and recommendations to the Board. The minutes of all Committee meetings will be circulated to members of the Board. Extracts from the minutes will be made available to such other persons as the Board directs, as may be necessary to enable them to properly carry out their functions.

11. Review by Board

Approved by the Board of Accordant Group.
Date: 27 March 2024.