The board of directors have approved the mandate for the audit committee which includes, among other duties and responsibilities: monitoring the financial reporting process and systems of internal control; monitoring the independence and performance of the external auditors; and, reviewing internal and year-end financial statements and other regulatory filings for approval of the board of directors.
Audit Committee Charter
Audit Committee Charter
(January 26, 2010, as amended)
Membership and Meetings
1. The Audit Committee will assist the Board in meeting its responsibilities and will provide oversight
1.1 the preparation and disclosure of the consolidated financial statements, Management’s Discussion and Analysis and annual and interim earnings press releases prior to release of the Company;
1.2 the credibility, integrity objectivity and adequacy of review procedures of financial reporting and public disclosure of financial information;
1.3 the Independent Auditor’s qualifications, independence and performance;
1.4 the compliance by the Company with legal and regulatory reporting requirements.
2. The Committee will also prepare any report required by the rules of the Commission to be included in any proxy statement prepared by the Company or in the annual directors’ report to shareholders.
Membership and Meetings
3.1 The Committee will be comprised of no fewer than three members as appointed by the Board of Directors all of which, in the opinion of the Board, are unrelated Directors.
3.2 Each Committee member will meet the independence, financial literacy and other membership requirements of the Toronto Stock Exchange and the rules and regulations of the AIM market of the London Stock Exchange and such other securities regulatory authorities having jurisdiction over theCompany (the “Commissions”).
3.3 At least one member of the Committee will have recent relevant experience of audit and financial matters.
3.4 Each Committee member will serve at the pleasure of the Board for a period not exceeding three years. Committee members may serve for up to two additional three year periods at the discretion of the Board or until such Committee member is no longer a Board member.
4.1 The Committee will meet in person or telephonically as often as it deems necessary, but not less frequently than four times per year.
4.2 Meetings of the Committee should be attended by representatives of the Company’s principal external auditors (“Independent Auditors”), the Chief Financial Officer, Legal Counsel and others as deemed appropriate by the Committee.
4.3 The Committee will meet with management in connection with the consideration and approval of the Company’s interim unaudited consolidated financial statements and annual audited consolidated financial statements. The Independent Auditors will be engaged by the Company to conduct a business review of each of the Company’s interim unaudited consolidated financial statements. In connection with the Company’s interim unaudited and annual audited consolidated financial statements, the Committee will meet privately with the Independent Auditor. In addition, the Committee may also meet privately from time to time with such other persons or groups as the Committee deems appropriate.
4.4 The Committee Chair will be responsible for calling the meetings of the Committee, establishing meeting agenda with input from management, supervising the conduct of the meetings and providing the Board with a timetable of significant financial statement milestones.
4.5 A majority of the number of appointed Committee members will constitute a quorum for conducting business at a meeting of the Committee.
Committee Authority and Responsibilities
Relationship with the Independent Auditors
5.1 The Committee will make recommendations to the Board with respect to the appointment or replacement of the Independent Auditor. In accordance with applicable laws, shareholders will be asked to ratify and approve the appointment of the Independent Auditor.
5.2 The Committee will make a recommendation to the Board with regards to compensation and oversight of the work of the Independent Auditor for the purpose of preparing or issuing an audit report or related work.
5.3 The Independent Auditor will report directly to the Committee. Pre-approval of Audit and Non-Audit Services
6.1 The Committee has the authority to pre-approve all auditing services and permitted non-audit services to be performed by the Independent Auditor for the Company and its subsidiaries.
Resources of the Committee
7.1 The Committee has the authority to retain independent legal, accounting or other advisors.
7.2 The Company will provide for funding, as and when deemed necessary or advisable by the Committee, for payment of compensation to the Independent Auditor and to any advisors employed by the Committee. Where the estimated fees for such services are in excess of $50,000, the unanimous consent of all Committee members is required prior to the engagement of such services.
7.3 Upon the request of the Committee, the Company will provide to each Committee member an induction and appropriate training for the role of an audit committee member.
Reports to the Board
8.1 The Committee will make available to the Board all Committee recommendations and Committee meeting minutes.
9.1 The Committee will review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.
10.1 The Corporate Governance Committee or the Committee will annually review the Audit Committee’s own performance.
Whistle-blowing and Complaint Procedures
11.1 The Committee will oversee the Company’s whistle-blowing policy as developed and approved by the Board.
11.2 The Committee will establish procedures for:
11.2.1 The receipt, retention and treatment of complaints received by the company regarding accounting, internal accounting controls, or auditing matters;
11.2.2 The confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
Financial Statement and Disclosure Matters
The Committee will:
12.1 Review and discuss with the Board, and the Independent Auditor as deemed necessary:
12.1.1 The annual audited and quarterly unaudited consolidated financial statements of the Company, earnings press releases and disclosures made in Management’s Discussion;
12.1.2 Significant financial reporting issues, judgments, accruals, reserves or other estimates made in connection with the preparation of the Company’s consolidated financial statements, including any significant changes in the Company’s selection or application of accounting principles, any major issues relating to the adequacy of the Company’s internal controls and any special steps adopted in light of material control deficiencies;
12.1.3 The accounting treatment of unusual or non-recurring transactions;
12.1.4 The effect of regulatory and accounting initiatives as well as off-balance sheet structures on the Company’s financial statements.
12.2 Review and discuss with the Board reports from the Independent Auditors on:
12.2.1 All critical accounting policies and practices to be used;
12.2.2 All material alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, the ramifications of each alternative and the treatment preferred by the Independent Auditor;
12.2.3 Other material written communications between the Independent Auditor and management, such as any management letter or schedule of unadjusted differences.
12.3 Receive and review reports, and discuss with the Board, on the Company’s disclosure controls and procedures and the adequacy of internal controls over financial reporting and public disclosure of financial information to provide reasonable assurance that they are sufficient to meet the requirements under National Instrument 52-109.