Audit Committee

The Charter

The principal purpose of the Audit Committee is to provide a forum for detailed discussion, examination and review of the Company’s auditing needs, financial reporting, and information systems activities and the selection, instruction, evaluation and compensation of external and internal auditors of the Company and external providers of financial and information management systems services to the Company. Qualifications for membership in the Audit Committee include status as an independent Director, financial literacy and an interest in supervising the financial management and reporting of the Company. Members of the Committee are selected and removed by a vote of the Board. The structure of the Committee consists of a Chairperson and two Directors appointed by the Board. The Audit Committee must be composed of a minimum of three Directors of the Company, each of whom must be independent and “Financially Literate”, meaning possessed of the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Corporation’s financial statements. The CFO acts as staff facilitator to the Committee. The Chairperson of the Committee directs the operations of the Committee through the establishment of the agenda for meetings, which are called at regular intervals and as may be required to meet the requirements of the Company. The Chairperson of the Committee reports on the activities of the Committee at Board meetings. The Audit Committee has the authority to engage, instruct and compensate, at the Company’s expense, any outside advisor it determines to be necessary to carry out its duties and to communicate directly with the internal and external auditors. The mandate of the Audit Committee of the Board is as follows:

Review the quality and acceptability of the accounting policies, principles and practices of the Company.
Review the quarterly and year-end financial statements, Management’s Discussion and Analysis, and earnings press releases of the Company before the Company publicly discloses this information, and report its findings for approval to the Board.
Monitor the adequacy and integrity of internal controls over accounting and financial systems and ensure that adequate procedures are in place for the review of the Company’s disclosure of financial information extracted or derived from the Company’s financial statements, other than the public disclosure stated immediately above, and periodically assess the adequacy of the those procedures.
Monitor the timely communication of accurate financial information regarding the Company to the shareholders.
Evaluate and recommend to the Board the Auditor to be nominated to prepare or issue an audit report or perform other audit, review or attestation services for the Company, and the compensation of the Auditor. Ensure that the Auditor reports directly to the Audit Committee.
Monitor the independence of the Auditor, and assume direct responsibility for overseeing the work of the Auditor engaged to prepare or issue an audit report or perform other audit, review or attestation services for the Company, including the resolution of disagreements between Management and the Auditor regarding financial reporting and communicate directly with the Auditor for the discussion and review of any issues as appropriate.
Pre-approve all non-audit services to be provided to the Company or its subsidiary entities by its Auditor. Authority to pre-approve non-audit services may be delegated to one or more independent members, provided that the pre-approval is presented to the full Audit Committee at its first scheduled meeting following such pre-approval.
Review the results of internal and external audits, and any change in accounting practices or policies and their impact on the financial statements and maintain oversight responsibility for management reporting on internal control.
Where there are unsettled issues raised by the Auditor that do not have a material affect on the annual audited financial statements, require that there be a written response identifying a course of action that would lead to their resolution.
Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, and the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
Review and monitor the adequacy and integrity of the Company’s management information systems.
Monitor the adequacy of financial resources.
Review the quality of the asset side of the balance sheet of the Company.
Review risks facing the Company.
Review and assess the adequacy of the charter of the Audit Committee on an annual basis.