INVESTORS

The AuditCommittee’s Charter

The Audit Committee’s Charter

1. Overall Purpose / Objectives

The Audit Committee will assist the Board of Directors in fulfilling its responsibilities. The Audit Committee will review the financial reporting process, the system of internal control and management of financial risks and the audit process. In performing its duties, the committee will maintain effective working relationships with the Board of Directors, management, and the external auditors and monitor the independence of those auditors. To perform his or her role effectively, each committee member will obtain an understanding of the responsibilities of committee membership as well as the Company’s business, operations and risks.


2. Authority

The Board authorizes the audit committee, within the scope of its responsibilities, to seek any information it requires from any employee and from external parties, to obtain outside legal or professional advice, to set and pay the compensation for any advisors employed by the Audit Committee, to ensure the attendance of Company officers at meetings as appropriate and to communicate directly with the Company’s external auditors.


3. Organization

Membership:

  • The Audit Committee will be comprised of at least three members, and if the Company is a “venture issuer” under applicable securities laws, a majority of the members must not be executive officers, employees or control persons of the Company, unless otherwise exempted by applicable securities laws.
  • The chairman of the Audit Committee will be nominated by the Audit Committee from the members of the Audit Committee which are not officers or employees of the Company, or a company associated or affiliated with the Company, from time to time.
  • A quorum for any meeting will be two members.
  • The recording secretary of the Audit Committee will be the Company’s Compliance Officer, or such person as nominated by the Chairman of the Audit Committee.

Attendance at Meetings:

  • The Audit Committee may invite such other persons (e.g. the Chief Executive Officer or Chief Financial Officer) to its meetings, as it deems appropriate.
  • Meetings shall be held not less than four times a year. Special meetings shall be convened as required. External auditors may convene a meeting if they consider that it is necessary.
  • The proceedings of all meetings will be minuted.

4. Roles and Responsibilities

The Audit Committee will:

  • Gain an understanding of whether internal control recommendations made by external auditors have been implemented by management.
  • Gain an understanding of the current areas of greatest financial risk and whether management is managing these effectively.
  • Review significant accounting and reporting issues, including recent professional and regulatory pronouncements, and understand their impact on the financial statements.
  • Review any legal matters which could significantly impact the financial statements as reported on by the general counsel and meet with outside counsel whenever deemed appropriate.
  • Review the annual and quarterly financial statements including Management’s Discussion and Analysis and annual and interim earnings press releases prior to public dissemination, including any certification, report, opinion, or review rendered by the external auditors and determine whether they are complete and consistent with the information known to committee members; determine that the auditors are satisfied that the financial statements have been prepared in accordance with generally accepted accounting principles.
  • Pay particular attention to complex and/or unusual transactions such as those involving derivative instruments and consider the adequacy of disclosure thereof.
  • Focus on judgmental areas, for example those involving valuation of assets and liabilities and other commitments and contingencies.
  • Review audit issues related to the Company’s material associated and affiliated companies that may have a significant impact on the Company’s equity investment.
  • Meet with management and the external auditors to review the annual financial statements and the results of the audit.
  • Review the interim financial statements and disclosures, and obtain explanations from management on whether:
    (a) actual financial results for the interim period varied significantly from budgeted or projected results;
    (b) generally accepted accounting principles have been consistently applied;
    (c) there are any actual or proposed changes in accounting or financial reporting practices;
    (d) there are any significant or unusual events or transactions which require disclosure and, if so, consider the adequacy of that disclosure; and
    (e) review the external auditors’ proposed audit scope and approach and ensure no unjustifiable restriction or limitations have been placed on the scope.
  • Review the performance of the external auditors and approve in advance provision of services other than auditing. Consider the independence of the external auditors, including reviewing the range of services provided in the context of all consulting services bought by the company. The Board authorizes the Chairman of the Audit Committee to pre-approve any non-audit or additional audit work which the Chairman deems as necessary and to notify the other members of the Audit Committee of such non-audit or additional work.
  • Make recommendations to the Board regarding the reappointment of the external auditors and the compensation to be paid to the external auditor.
  • Review any significant disagreement among management and the external auditors in connection with the preparation of the financial statements.
  • Review and approve the Company’s hiring policies regarding partners, employees and former partners and employees of the present and former external auditors of the Company.

Establish a procedure for:

  • (a) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters; and
    (b) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters.
  • Meet separately with the external auditors to discuss any matters that the committee or auditors believe should be discussed privately.
  • Endeavour to cause the receipt and discussion on a timely basis of any significant findings and recommendations made by the external auditors.
  • Ensure that the Board is aware of matters which may significantly impact the financial condition or affairs of the business.
  • Perform other functions as requested by the full Board.
  • If necessary, institute special investigations and, if appropriate, hire special counsel or experts to assist, and set the compensation to be paid to such special counsel or other experts.
  • Review and recommend updates to the charter; receive approval of changes from the Board.