Audit Charter
I.PURPOSE
The Audit Committee has been established by the Board of Directors to assist the Board in fulfilling its legal and fiduciary responsibilities by overseeing the integrity of the company’s and its subsidiaries’ financial statements, the financial reporting processes, internal accounting and financial controls, the annual independent audit of the Corporation’s financial statements, and other aspects of the financial management of the Corporation, including overseeing the establishment and maintenance of processes to assure compliance by the Corporation with all applicable laws, regulations and Corporation policy. In so doing, it is the responsibility of the Audit Committee to foster free and open means of communication between the directors, the independent auditors and the financial management of the Corporation.
It is the responsibility of the financial management of the Corporation to prepare financial statements in accordance with generally accepted accounting principles, International Financial Reporting Standards (IFRS), and the Jamaica Company Acts and of the independent auditors to audit the annual financial statements. It is not the responsibility of the Committee to plan or conduct audits or to determine that the Corporation’s financial statements are complete and accurate or are in compliance with generally accepted accounting principles or (IFRS).
II. ORGANIZATION
The Committee shall consist of no less than three independent members elected by the Board at the first Board meeting following the Annual General Meeting of stockholders to serve until their successors shall be duly elected and qualified. Each member of the Committee must be financially literate and, at least, one member ought to be financially qualified as determined by the Board in accordance with the Jamaica Stock Exchange rules. The Chair of the Committee shall be designated by the Board and must be an independent member of the Board. The composition of the membership of the Committee shall comply with all applicable statutes and the rules and regulations of the Jamaica Stock Exchange (JSE) and the Financial Services Commission (FSC). Committee members shall not simultaneously serve on the audit committees of more than three other public companies unless such service is approved by the Board upon its determination, based on the recommendation of the nominating and Corporate Governance Committee, that such simultaneous service would not impair the ability of such member to effectively serve on the Committee.
III. MEETINGS
The Committee shall meet at such times as it determines, but not less frequently than quarterly. Special meetings may be called by the Chair. As part of its obligation to foster open communications, the Committee shall meet regularly with management and the independent auditors in separate executive sessions to discuss any matters that the Committee or each of these groups believe should be discussed privately. Two members of the Committee shall constitute a quorum.
IV. AUTHORITY OF COMMITTEE
- A. The Committee shall have the sole authority to appoint and dismiss the Corporation’s independent auditors. The independent auditor shall report directly to the Committee.
- B. The Committee shall have the sole authority to approve the amount of fees and other terms of any engagement by the Corporation of the independent auditors.
- C. The Committee shall have the authority to retain special legal, accounting or other consultants to advise the Committee.
- D. The Committee may request any director, officer or employee of the Corporation or the Corporation’s outside counsel, or independent auditor or other consultant to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee.
- E. The Committee may form and delegate authority to a subcommittee of the Committee, consisting of one or more members of the Committee, whenever it deems appropriate.
V. RESPONSIBILTIES AND DUTIES
To fulfill its responsibilities and duties the Committee shall:
A. Independent Audit and Independent Auditors.
- 1. Appoint and dismiss the Corporation’s and subsidiaries’ independent auditors subject to shareholders’ ratification.
- 2. Review and approve the independent auditor’s proposed audit scope, approach, staffing and fees.
- 3. Pre-approve all audit and permitted non-audit services to be performed by the independent auditors subject to such procedures as may be established by the Committee.
- 4. At least annually, obtain and review a report by the independent auditors describing the firm’s internal quality-control procedures, any material issues raised by the most recent internal quality-control or peer review of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues.
- 5. Receive on a periodic basis, not less frequently than annually, from the independent auditors a written statement delineating all relationships between the independent auditors and the Corporation, including each non-audit service provided to the Corporation.
- 6. Actively engage in a dialogue with the independent auditors with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent auditors.
- 7. Discuss with the independent auditors the matters required to be discussed by Statement on the Audit, and as amended by Statement on the Audit, relating to the conduct of the audit.
- 8. Receive and review with management any management letter provided by the independent auditors and the Corporation’s response to that letter, review with the independent auditors any problems or difficulties the auditors may have encountered and any disagreements with management.
- 9. Discuss with the independent auditor whether it has identified the existence of any issues of the type described by the Jamaica Stock Exchange (JSE), the Financial Services Commission (FSC), and the Company’s Act.
- 10. Review and approve hiring policies for employees or former employees of the independent auditors.
- 11. To satisfy itself on the integrity of financial information and that financial Controls and systems of risk management are robust and defensible.
V. RESPONSIBILTIES AND DUTIES
To fulfill its responsibilities and duties the Committee shall:
B. Financial Statement Review.
- 1. Oversee the annual and quarterly financial reporting processes.
- a. The Committee shall review with management and the independent auditors the financial statements and Management’s Discussion and Analysis (“MD&A”) to be included in the Corporation’s Annual Report prior to filing or distribution, including the applicability of critical accounting policies, the reasonableness of significant judgments and the clarity of the disclosures in the financial statements. The Committee shall also discuss the results of the annual audit and any other matter required to be communicated to the Committee by the independent auditors under auditing standards of the Institute of Chartered Accountants of Jamaica (ICAJ)
- b. The Committee shall review with management the interim financial statements and MD&A to be included in the Corporation’s quarterly reports. The Committee shall also discuss the results of the quarterly reviews and any other matters required to be communicated to the Committee by the independent auditors under current regulations and standards.
- 2. Discuss with management the Corporation’s earnings press releases, including the use of IFRS as well as financial information and earnings guidance provided to analysts if any.
- 3. Obtain and review periodic reports at least annually from management and the independent auditors assessing the effectiveness of the Corporation’s internal control structure and procedures for financial reporting including: (a) all significant deficiencies or material weaknesses in the design or operation of internal controls, and (b) any fraud, whether or not material, that involves management or other employees having a significant role in the internal controls, all significant changes to internal controls, including corrective actions, since the last report to the Committee.
VI. REPORTS
- A. Prepare the reports required by the rules of the JSE
- B. Review and reassess the adequacy of this Charter annually and submit any recommended changes to the Board for approval.
- C. Conduct an evaluation of the Committee’s performance at least annually.
- D. The Chair of the Committee shall regularly report to the Board regarding the Committee’s actions.
VII. FUNDING
The Committee shall receive appropriate funding, as determined by the Committee after final approval of the board, from the Company for payment of:
- A. Compensation to any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company;
- B. Compensation to any advisors employed by the Committee, and
- C. Ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
Any action duly and validly taken by the Committee pursuant to the power and authority conferred under this Charter shall for all purposes constitute an action duly and validly taken by the Board and may be certified as such by the Secretary or other authorized officer of the Company. The Board shall be informed of any such action.
AUDIT COMMITTEE CHARTER VERSION HISTORY
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Version
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Amendment(s) made
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Approved By
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Date and Month Approved
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1.
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Charter Created
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Board of Directors
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February 2018
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2.
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Amendment
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Audit Committee and Board of Directors
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May 2024
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