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Audit Assurance and Compliance



This study revolves around the annual report of Altura Mining Company based on the computation of income statement and balance sheet ratio. These study further shades light on the implications of ASX Corporate Governance Principles and ASX CGC principles implemented by Altura Mining Company. The company mainly deals with the independent supply of lithium raw materials. The main goal of the company is to be the hard rock supplier of lithium by 2018. The report further deals with the Risk Assessment of the Altura Mining Company in context to the nature of the company, overview of the Companies market and the business of the Company. The project of the company is located at the Pilgangoora deposit in Western Australia. This report is further incorporated with the relevant audit risk and focuses on the potential steps to reduce the risks of the company.

Application and explanation of ASX Corporate Governance Principles

Altura Mining Company is a well-governed Company which is financially prudent (Alturamining.com, 2018). The Company has specific policies to maintain good governance policies like Audit and Risk Committee Charter, Corporate Governance Statement, Remuneration and Nomination Committee Charter, Code of Conduct, Security Trading Policy, Corporate Communication Policy and Statement on Risk Management Practices. As stated by Kemp et al. (2012), the Altura Mining Company has following ASX CGS principles. Firstly, the company has laid solid foundations for management and oversight as the company has an experienced and dedicated management team with specialisations in the conversion into real profits and mines. The Senior Management team has developed some of the largest mines around the world. As commented by Ho et al. (2012), their performance is evaluated by the Board of Directors on the basis of the aforesaid company policies. Secondly, structure the board to add value forms an integral policy in accordance to the management team, its size, skills and commitment to discharge the duties effectively. The Altura Mining Company have a strong and efficient management board with qualified mining engineers with operational and development experiences, qualified accountant with experiences in the mining industries. As stated by Klettner et al. (2014), the commercialisations of the projects are looked after by the non- executive director from resource identification to the production of the raw materials. The board further consists of a mechanical engineer with experiences in the logistics specifically management and development of bulk handling and the terminal operations. As stated by Griffiths (2016), a non executive director experienced in the trade of metals and minerals are constituted in the Altura Mining board. An experienced project manager and civil engineer is also present on their board of directors. The Altura Mining is one of the leading lithium raw material suppliers and has a positive track of delivering mining projects on time. Acting ethically and responsibly forms the third principle of the company. As stated by Engeman et al. (2012), the company has drawn its ethics on the grounds of good cultural government system which includes Corporate Governance System, Anti-corruption policy, Policy for Compliance with Continuous Disclosure Requirements. The company is responsible enough to the workers and the management team as it places the protection of people and environment above all of their policies. Altura initiates health safety and environment management system through the implementation of health safety and environment management system. The Altura health, safety and environment management system comprises of the health, safety and environment (HSE) policy, fitness for Work policy, Pilgangoora values and visions, HSE contractor Requirements Manual and HSE management system manual policies. As commented by Ahmed and Henry (2012), safeguarding integrity in corporate reporting forms the fourth principle which states that the company needs to have formal and rigorous safeguarding processes. The security trading policy indicates that the employees, associates, management team of the Altura Company who have access to all the information of the company are not passing it to the general public. The objective of this policy is to prevent their trading laws. The trading is permitted during a prohibited period only if the individual is not in the possession of the price-sensitive information value. Making timely and balanced disclosure is one of the vital principles of the mining company. They give out their orders and deliveries maintaining the proper time period. The team has a track of delivery of the mining projects on time and on budget. Respecting the rights of the security holders is regarded as the fifth principle which is based on dealing with the workers, shareholders and the community. This code is applicable to all the companies under the Altura group and to the agents, contractors and the intermediaries. This principle is completely based on the company values which ensure acting with integrity and honesty and abiding by the rules and regulations, avoiding conflicts of interest and respecting each other in accordance to their jobs. Recognition and management of risks forms the seventh principle to which the company has aligned few risk management procedures. Firstly, identification of the risk is important followed by the maintenance procedures. The board makes sure that the company manages its activities and the strategies within a budget. A framework is entailed in the company to make sure that the business risks are identified. The members of the company hire the operational sites to get informed of the operational matters. The company is further committed to environment and safety management towards flora and fauna and also the workers. As commented by Hsu et al. (2013), remunerate fairly and responsibly is the last principle of the company which assures that the remunerations made are fair to the workers. The company monitors and make recommendations on remuneration policies and packages. The committee formulates and recommend to the board about the specifications of the remuneration. The committee also formulates the policies for remuneration of executive directors and other workers. As commented by Galbreath (2013), the reviewing of the committee charter annually and recommendations to the board about any changes in the policy charter are made by the committee members. Remuneration may include fringe benefits, salary, leave entitlements, bonuses, equity incentive, superannuation payments and other remunerations. Reporting is done by the Committee Chairman on the basis of the proceedings at every meeting to the Board of Directors.

Risk Assessment

Overview of the company



The Altura Mining Company deals with the supply of raw materials of lithium. The project construction is underway covering processing, mining, logistics, and infrastructure. The current life of mine is forecasted to be 20 years at current rates. As commented by Bottomley (2016), the clients are regulated in context to the respective roles and responsibilities of its board and management. The role of the board is to provide strategic direction for the company to manage the goals and monitor the achievement of the goals. The board is responsible for the promotion and ensures the success of the company by appointing and removing the Managing Director and ratifying the appointment where appropriate. As commented by Rhode and Packel (2014), reviewing and rectifying the risk management system and control the code of conduct. Further strategies include monitoring the progress of major expenditures and monitoring the financial performance of the company.



As commented by Tao and Hutchinson (2013), the relevant audit risk of the Altura Mining Company are foreign currency risk, the company is exposed to this risk by various currency exposures in respect to the US dollar. Revenue is denominated in terms of the US dollar which impacts the cash flow settlements. Price risk is generated due to the exposure of the coal price risk and the equity price risk. Interest rate risk is experienced by the company when changes in profit and equity are made. Credit risk refers to a risk on basis of contractual obligations. Liquidity risk refers to the risk that the company or group will not have sufficient amount to settle the funds.

Foreign currency risk can be mitigated by hedging foreign assets. The ways to hedge can be indicated by buying a currency hedged mutual fund and to invest in an exchange-traded fund. This risk can also be mitigated by buying undervalued currencies and looking for high-interest rates.

Price risk can be mitigated by keeping a check on the coal price and managing the commodity risk on the basis of the business performance.

Interest rate risk can be mitigated by purchasing high yield bonds, selling long-term bonds and buying futures.

Credit Risk can be mitigated by increasing the top line trade credit insurance policy and also by adjusting the cost of credit in context to the credit strength, credit tightening and increasing the portfolio mix.

Liquidity risk can be mitigated by monitoring and be controlling liquidity indicators, creating a contingency plan and conduction of scheduled stress tests.

Income statement denotes the overall statement of revenue and income that could be generated by the company. In this segment certain income statement ratios further denotes the area of profit and cost that has been seen in the report. The profit margin ratio states that in 2016 the gross profit margin of the company has been 56.44% whereas in 2017 the net profit has been 15.89%. Therefore, the ratio analysis further states that deterioration in profit has been the main issue that is to be reduced by introducing effective quality management.

In the current ratio it has been seen that the amount of current assets has increased from $24018 to $26085 whereas huge increase in current liabilities has further impacted on the overall performance of the company (alturamining.com, 2017). Therefore, huge decrease in the current ratio further states that effective expenses reduction management could be done by the company for regaining the position in terms of effective current ratio maintenance. Equal amount of inventory has been seen in the last two years which shows that lack of effective inventory management is not reducing the inventory thereby affecting the quick ratio of the company. Debt equity ratio is the most important ratio in the balance sheet that denotes the ability of the company in meeting the debt obligations.  The debt equity ratio of the company has remained the same for the last two years which shows that huge increase in both debt and equity as compared to the previous year has impacted the financial performance of the company.

The return on the equity measures the effectiveness of the company in protecting the interest of the shareholders in long run. The analysis of this segment further denotes that the ROE has reduced which shows that investor’s protection is to be given top priority by the company.

Huge decrease in the net income and sales as compared to the previous year states that decreasing trends are being followed by the company that is to be improved.



This study entailed the ASX CGS principles in context to its implications and explanations. This report presented the annual ratios of the Altura Mining Company. It also focuses on the business overview and identification of vulnerable risks to the Altura Mining Company.  It further evaluated the computation of the annual income and the balance sheet ratio. The study noted the relevant risks of the company like liquidity risk, price risk, credit risk, interest rate risk and credit risk. The mitigation of the risks is also brought into light through this study. The strategies of the Altura Mining Company are also studied in detail throughout the study.  



Ahmed, K. and Henry, D., 2012, Accounting conservatism and voluntary corporate governance mechanisms by Australian firms. Accounting & Finance52(3), pp.631-662.

alturamining.com (2017), Annual report Available at:                                      https://alturamining.com/wp-content/uploads/2017/10/2017-10-31-Annual-Report-2017-High-Res-Version-for-Website-1.pdf [Accessed on April 12th 2018]

Alturamining.com (2018), changing forward with lithium, viewed on: 12/01/2018    https://alturamining.com/corporate/

Bottomley, S., 2016. The constitutional corporation: Rethinking corporate governance, London: Routledge.

Engeman, C.D., Baumgartner, L., Carr, B.M., Fish, A.M., Meyerhofer, J.D., Satterfield, T.A., Holden, P.A. and Harthorn, B.H., 2012. Governance implications of nanomaterials companies’ inconsistent risk perceptions and safety practices. Journal of Nanoparticle Research14(3), p.749.

Galbreath, J., 2013. ESG in focus: the Australian evidence. Journal of business ethics118(3), pp.529-541.

Griffiths, P., 2016. Risk-based auditing, London:Routledge.

Ho, F.N., Wang, H.M.D. and Vitell, S.J., 2012. A global analysis of corporate social performance: The effects of cultural and geographic environments. Journal of business ethics107(4), pp.423-433.

Hsu, C.W., Kuo, T.C., Chen, S.H. and Hu, A.H., 2013. Using DEMATEL to develop a carbon management model of supplier selection in green supply chain management. Journal of cleaner production56, pp.164-172.

Kemp, D., Owen, J.R. and Van de Graaff, S., 2012. Corporate social responsibility, mining and “audit culture”. Journal of Cleaner Production24, pp.1-10.

Klettner, A., Clarke, T. and Boersma, M., 2014. The governance of corporate sustainability: Empirical insights into the development, leadership and implementation of a responsible business strategy. Journal of Business Ethics122(1), pp.145-165.

Rhode, D.L. and Packel, A.K., 2014. Diversity on corporate boards: How much difference does difference make. Del. J. Corp. L.39, p.377.

Tao, N.B. and Hutchinson, M., 2013. Corporate governance and risk management: The role of risk management and compensation committees. Journal of Contemporary Accounting & Economics9(1), pp.83-99.


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