Predict your next investment

INDUSTRIAL | Construction / Lumber & Wood Production
qualityhardwoodsltd.com

See what CB Insights has to offer

Stage

Acquired | Acquired

About Quality Hardwoods

Quality Hardwoods is a Canadian lumbar wholesaler that specializes in Northern Hardwood species.

Quality Hardwoods Headquarter Location

196 Latour Cres.

Powassan, Ontario, P0H 1Z0,

Canada

705-724-2424

Latest Quality Hardwoods News

Goodfellow : Annual Information Form 2020

Feb 23, 2021

10:44a 02/23/2021 | 11:18am EST Message : February 19, 2021 1.1 - Organization of Goodfellow Inc . ..................................................................................... 3 1.2 - Intercorporate Relationships ............................................................................................ 3 2.1 Three-Year History ............................................................................................................ 4 3.1 General ............................................................................................................................... 5 ITEM 6 - MARKET FOR SECURITIES OF GOODFELLOW ............................................. 10 ITEM 7 - DIRECTORS AND OFFICERS ................................................................................ 10 ITEM 8 - TRANSFER AGENT AND REGISTRAR ................................................................ 11 ITEM 9 - AUDIT COMMITTEE ............................................................................................... 12 9.1 Audit fees ......................................................................................................................... 13 9.3 Tax fees ............................................................................................................................ 13 ITEM 11 - ADDITIONAL INFORMATION ............................................................................ 14 APPENDIX A ............................................................................................................................... 15 1.1 - Organization of Goodfellow Inc. Goodfellow Inc. was incorporated under the Canada Corporation Act on January 18, 1972 under the name Goodfellow Lumber Sales Ltd. and during 1972, acquired the assets of Goodfellow Lumber Ltd. Its name was changed to Goodfellow Lumber Ltd. by Supplementary Letters Patent dated March 25, 1977. It was continued under the Canada Business Corporation Act on November 30, 1978 and its name was changed to the current name by Articles of Amendment dated October 5, 1984. It is referred to in this Annual Information Form as "Goodfellow", the "Corporation" or the "Company". Goodfellow has its principal and registered offices at 225 Goodfellow Street, Delson, Quebec, J5B 1V5. Goodfellow carries on the business of re-manufacturing, distribution and brokerage of lumber and wood products at the wholesale level. Goodfellow, as it currently exists, was incorporated for the purpose of purchasing the assets of its predecessor corporation, Goodfellow Lumber Ltd. That Corporation and its predecessors had been engaged in the lumber business since 1898. In 1984, the share capital was split on a 5 for 1 basis, and 1 million common shares were sold to the public. The common shares of Goodfellow were then listed on the Montreal Exchange. Pursuant to the reorganization of the Canadian stock exchanges, trading in the common shares of Goodfellow has been transferred to the Toronto Stock Exchange and the common shares of Goodfellow continue to trade under the symbol "GDL". Finally, on January 19, 2007, the Corporation split its common shares on a two-for-one basis. The Corporation's head office is located in Delson, Quebec, where its main distribution and remanufacturing plants are located. The Delson yard is a 3.5 million square foot facility and is comprised of warehouses, wood-drying kilns and pre-dryer, re-manufacturing mills, wood staining facilities, gluelam and wood treating plants. The Corporation has sales and distribution offices and warehouses in Canada in Richmond BC, Calgary and Edmonton AB, Saskatoon SK, Winnipeg MB, Campbellville, Ottawa and Powassan ON, Quebec City QC, Moncton NB, Dartmouth NS, and Deer Lake NFLD. It also operates wood treating plants in Elmsdale NS and Deer Lake NFLD and wood drying kilns and grading chains in Drummondville, Trois-Rivieres, Mont Tremblant QC and Powassan ON. The Corporation's U.S. sales offices is located in Manchester NH. 1.2 - Intercorporate Relationships Goodfellow Inc. owns all of the outstanding shares of Goodfellow Distribution Inc. (a Delaware Corporation). Goodfellow Distribution Inc. operates as a distributor of lumber and wood products in the United States. Goodfellow Inc completed the acquisition of 100% of the shares of Quality Hardwoods Ltd in December 2015. Finally, Goodfellow Inc. owns 40% of a joint-venture since December 1, 2015. INVESTMENT IN A JOINT VENTURE On December 1, 2015, the Company and Groupe Lebel Inc. completed the closing of a joint venture and the creation of Lebel-Goodfellow Treating Inc. with seven wood treatment plants to serve markets across Ontario, Quebec and the Maritimes. Lebel-Goodfellow treating Inc. became one of the largest treated wood producer in Eastern Canada with unsurpassed geographical coverage. Groupe Lebel's four plants located in Bancroft and Caledon, ON, Dégelis and St-Joseph, QC, were combined with the Company's three plants located in Delson, QC, Elmsdale, NS, and Deer Lake NFLD and were leased to the joint venture forming a new business unit focused on operational excellence. With the creation of the joint venture, this transaction was supposed to enhance the strengths of the two partners to better serve the treated wood clients across Eastern Canada. In fiscal, 2016, the Company invested $3.0 million in the joint venture in the form of inventory of raw material pursuant to a shareholder agreement in return of 40% of the shares of the joint venture. In Q2-2017, both parties agreed to dissolve the joint venture. The joint venture ceased operations on May 31st, 2017. The better part of the liquidation was done in Q3-2017. Goodfellow received back its initial investment of $3.0 million and $320 thousand of dividends as part of the dissolution. In fiscal 2018, the Company received a $260 thousand dividend and the carrying amount of the investment in the JV at November 30, 2020 is $25 thousand. The closing of the JV should be done by 2021. BUSINESS COMBINATIONS On December 31, 2015, the Company completed the acquisition of 100% of the shares of Quality Hardwoods Ltd. located in Powassan, ON. Quality Hardwoods Ltd. manufactures, sells and distributes hardwood lumber products in Ontario and in the US which is core to our business development strategy. Sales of the acquired company recognized since the acquisition date amounted to approximately $13.9 million for 11 months. The purchase price was $6.3 million, subject to post-closing adjustments. The Company has financed the acquisition through its existing revolving credit facility, from the holdback provision an amount of $0.6 million has been paid during the year 2016. The remaining balance was settle for $150 thousand during the year 2017. ITEM 2 - GENERAL DEVELOPMENT OF GOODFELLOW INC. 2.1 Three-Year History Fiscal 2018 was budgeted as a transition into historical profitability. As responsible operators, management continued in its objective of eradicating obsolete inventory. Cost control measures continued to be implemented through operation efficiencies and continued process improvements within the ERP. Through pricing discipline, margins held overall despite very volatile commodity fluctuations. The results in Q1-2018 were $1.4 million net loss with traditional losses mitigated by decent business conditions in Jan/Feb to end the quarter. Q2-2018 culminated with an exceptional May and result of $1.8 million of net profit. The beginning of Q3 showed discrete signs of softening markets especially in Ontario and continued headwinds in Alberta/Saskatchewan. Commodity price levels in plywood and lumber dropped at an unprecedented pace leaving those categories in distress. Overall sales in Q3 and Q4 fell below expectations resulting nonetheless in $2.0 million for Q3-2018 and $0.2 million Q4-2018 of net profit. The Company was able to continue its gradual mandate to return to profitability in 2018. 2018 final results were a net profit of $2.6 million versus a $2.1 million net loss in 2017. Fiscal 2019, Goodfellow had full intention and management commitment of continuing in its positive trend to a normalized return for its shareholders. The Company's overhead having been right sized, as well as being able to count on a fully functional ERP system, were key in keeping focus on sales revenue and gross margins. Conservative inventory management, with the objective of improving our turns, resulted in reduced exposure to volatile commodity fluctuations in 2019. Sales Revenue decreased in 2019 due in part to hardwood lumber market turmoil. This was caused by Chinese lumber tariffs imposed on American hardwoods. This factor resulted in a substantial correction in hardwood pricing and a surplus of material availability in North America. Regionally in Canadian Distribution we saw continued softening of demand in the GTA & Southwestern Ontario during Q1 (Dec-Feb) and Q2 (March-May) 2019. Goodfellow's distribution footprint remains intact and fortunately the Company saw several encouraging revenue gains in many parts of the country. Fiscal 2020 first quarter fell shy of budget but lied within our traditional loss in that holiday season period. The Company's performance was negatively affected by decreased demand in the manufacturing sector especially in the hardwood category. Subsequent to February 29, 2020 the COVID-19 outbreak was declared a pandemic by the World Health Organization. The economic climat changed drastically. The situation was dynamic and the ultimate duration and magnitude of the impact on the economy and the financial effect on our business wasn't known at that time. Our result in the second quarter is as a result of unforeseen pandemic circumstances combined with a contrasting, unprecedented surge in seasonal demand. The cocooning effect of people staying home and investing in outdoor upgrades had a positive effect on our business. The negative effects of the pandemic were felt heavily inApril with imposed lockdowns and the closure of job sites. The Company nonetheless was positioned to succeed in many regions of Canada where economic devastation was mitigated by efficient health measures. Third quarter of fiscal 2020 was characterized by the realities of the pandemic having set in and its drastic effects on supply and demand. The Company performed very well and was able to capitalize on surging demand in commodities and seasonal products. This trend continued in the fourth quarter and extended well into late November which is uncharacteristic and unprecedented. The Company used its diverse value-added capabilities to meet the strong demand for custom orders and specialty products. In late September 2020, the Company fell victim to a cyber-attack. Initiatives were quickly executed to protect the Company's interests and restore ongoing service. The financial results of the Company were dampened by this incident. The resourcefulness and understanding of the Compny's sales processes by the employee base mitigated the potential catastrophic or pursuant consequences. ITEM 3 - BUSINESS OF GOODFELLOW INC. 3.1 General Economic Segment and Main Markets Goodfellow sells to over seven thousand customers with only one account representing more than 10% of its annual sales volume. The Corporation operates in one single economic segment as stated in the financial statements. There are 3 main categories of end-use market for Goodfellow's product: new home building, renovations and industrial (manufacturing). These categories are directly affected by the economy, the trends and general demand. Most of the 7000 clients that Goodfellow supplies can be classified within one of the following categories: home centres/lumber dealers and large chains, specialty retailers, government, manufacturers and industrial. Goodfellow has a significant presence throughout Canada. In 2020, approximately 32% of total Corporation sales are in Quebec, 16% in the Atlantic provinces, 28% in Ontario, 11% in Western Provinces and 13% in the U.S. and other export markets. Distribution Methods and Products The Corporation purchases its lumber and lumber products from over 1,200 saw mills and re-manufacturing plants in Canada, the United States and abroad. Goodfellow in turn distributes or re-manufactures the lumber and wood products. Some of these products are re-manufactured and recycled timber, pressure treated lumber, machine coated stained siding, hardwood and softwood panel products, laminated veneer lumber, engineered wood products including laminated timber, rough and dressed imported and domestic hardwoods, hardwood flooring products and various grades, species and sizes of softwood lumber. Over the last few years, the Corporation has added many new products to its product lines such as wire products and building products including foil insulation, house wrap insulation, ceiling products, trus joist, compositie decking and hardware. Goodfellow is one of the largest distributor of hardwood flooring in Canada. In addition to the selling activity, Goodfellow also sells to its client a wide range of services, such as kiln facilities, paint shop for customized products, millwork, pressure treatment facilities and engineering. Goodfellow keeps a broad range and quantity (over 50,000) of items in inventory in order to satisfy its customers' demand in a timely fashion. In addition to this purchased inventory, Goodfellow keeps products on consignment. These products are treated as if they belong to the Corporation, but no disbursement is required until they are sold. Goodfellow also distributes products under its own name. Purchased products are mostly received at one of our 18 locations and then shipped to the client. Goodfellow uses the services of independent transportation companies for its deliveries as well as its own fleet (mostly used for local distribution). But, from time to time, Goodfellow will request that its supplier ship directly to its customer. These direct sales significantly reduce shipping time because the product does not have to transit through our facilities and because, in some cases, the supplier is closer to our client. Sales Goodfellow sales of products or services which accounted for more than 10% of its total consolidated revenue for 2020 are set out below. Approximately 87% of its sales are made in Canada. Premises The following constitutes a complete list of the premises owned or leased by Goodfellow and used in carrying on its business: Municipality or Region Sales office, manufacturing facility and distribution centre Owned 979,664 Quality Control System The Corporation has established a quality control system at its Delson plant in accordance with the ISO 9001 International Quality Standards for which it received certification in 1995. This facility produces specialty treated products such as guard rail posts, treated products for industrial construction and laminated beams. This ISO 9001 quality system is in place to satisfy the requirements of the Quebec government's "Direction de la Qualité" and has enabled the Corporation to be included on an exclusive bidders list for these products. Research and Development The Corporation undertakes research and development activities, due to the nature of its business. The R&D is mainly focused on engineered and treated wood products in order to develop better manufacturing methods. The Corporation conducts is own research and development activities. Competition The Corporation offers a wide range of products to a large number of customers in diverse business sectors. Its competition is varied and includes large integrated forest product companies as well as numerous smaller distributors link with vendors going direct. Cyclical Nature The Corporation business follows a seasonal pattern with merchandise sales traditionally higher in the fiscal second and third quarters than other quarterly periods. As a result, a higher share of the total earnings is typically earned in the second and third quarter. This business seasonality results in performance that can vary from quarter to quarter and is not necessarily indicative of performance for the balance of the year. Employee Relations As at November 30, 2020, the Corporation employed 673 persons of which 384 were located in Quebec. There were 268 classified as management, sales and administration, 25 classified as plant, mill and yard supervisors and 380 classified as skilled workers. The Corporation's employees are not represented by a labour union except for the Delson, Drummondville and Trois-Rivieres sites. The Corporation considers its labour relations to be good. No work stoppage has ever occurred due to labour unrest. The Corporation, in consultation with employee representatives, regularly reviews working conditions, wages and benefits with a view to establishing competitive compensation arrangements acceptable to its employees. 3.2 Risk Factors The business as conducted by the Company involves numerous risks and uncertainties. The main risk factors and uncertainties facing the Company are disclosed in the "Risk and Uncertainties" section of the Company's Annual report for the year ended November 30, 2020 which is incorporated herein by reference, as supplemented in the "Risk and Uncertainties" section of the Company's quarterly reports to shareholders. Theses risks and uncertainties should be considered in conjuction with the other information included in this AIF. ITEM 4 - DIVIDENDS The Corporation declares a dividend depending on annual financial results. On November 8, 2019, the Company declared a dividend of $0.10 per share, totaling $856 thousand to shareholders of record on November 22, 2019, which was paid on December 6, 2019. On February 13, 2020, the Company declared an eligible dividend of $0.10 per share totaling $856 thousand, which was paid on March 13, 2020 to shareholders of record at the close of business on February 28, 2020. On November 16, 2020, the Company declared a dividend of $0.25 per share, totaling $2.1 millions to shareholders of record on November 27, 2020, which was paid on December 4, 2020. The dividend paid within the last 3 financial years was as follow: 2020 2019 2018 ITEM 5 - DESCRIPTION OF CAPITAL STRUCTURE At November 30, 2020, there were 8,562,554 common shares issued (same last year). The Company has authorized an unlimited number of common shares to be issued, without par value. At February 19, 2021, there were 8,562,554 common shares outstanding. On January 15, 2017, the Company granted 56,000 deferred shares to a key executive. Under this program, the executive was eligible to receive shares of the Company if specific non-market performance targets were met. The Company recognized the fair value of the shares at the grant date and the shares were vested at November 30, 2017 as the Company met the non-market performance targets. On April 12, 2019, the Company modified these deferred shares to allow for a cash alternative at the key executive's discretion. The cash alternative allows the key executive to a cash payment equal to the number of deferred shares exercised multiplied by the fair value of the shares calculated using the average closing trading price during the preceding twenty trading days of the exercise. On November 14, 2019, the key executive exercised his right and received 56 000 shares of the Company. All shares under this grant have been issued. The Company had implemented in 2002 a Key Employee Share Option Plan (SOP). Since there are no outstanding options under the SOP and because the Company no longer intends to use it, the SOP was repealed and terminated as of July 4, 2019. ITEM 6 - MARKET FOR SECURITIES OF GOODFELLOW The common shares of Goodfellow are listed on the Toronto Stock Exchange under the symbol "GDL". The following table sets forth the market price range, in Canadian dollars, and trading volumes of the Corporation's Common Shares on the Toronto Stock Exchange for each month of the most recently completed financial year. Trading price and volume : Fiscal Year ended November 30, 2020 Date 2,700 All of the directors and officers of Goodfellow have held senior positions with the Corporation for five years or more except for Alain Côté, and Eric Bisson. Alain Côté was appointed Director on April 13, 2018. Éric Bisson was appointed Vice-President, Quebec on December 30, 2019. On October 15, 2020, the Board announced the appointment of Mr. Douglas Goodfellow as Chairman of the Board, succeeding Mr. Claude Garcia who has been Chairman since 2012. Mr. Garcia continues to serve as Director and Chairman of the Compensation Committee. Also Mr. Alain Côté has taken on the new role of Lead Director. Mr. Douglas Goodfellow has been succeeded in the role of Secretary of the Company by Mr. Charles Brisebois, CFO. ITEM 8 - TRANSFER AGENT AND REGISTRAR Goodfellow's transfer agent and registrar is Computershare Investor Services Inc. The register of transfers of the common shares of Goodfellow maintained by Computershare Investor Services Inc. is located at its offices in Montreal, Quebec. ITEM 9 - AUDIT COMMITTEE General As required since Multilateral Instrument 52-110 in 2004, the Audit Committee is composed of four independent directors (Claude Garcia, Stephen A. Jarislowsky, Normand Morin and Alain Côté). All Audit Committee members have the ability to read and understand financial statements that present a breadth and complexity of the issues that can be reasonably expected to be raised by the Corporation's financial statements. All of the Audit Committee members have in depth experience and knowledge of the preparation and analysis of financial statements, an understanding of the accounting principals and internal controls and procedures used for financial reporting by the Corporation and an understanding of Audit Committee functions. The Audit Committee examines the financial statements quarterly and annual reports including the management discussion and analysis in order to provide assistance to the directors in fulfilling their responsibilities in connection with the supervision of the accounting and reporting practices of the Corporation, and the quality and integrity of the financial reports and public disclosure documents of the Corporation. The Audit Committee has direct and open communication with the directors and the independent auditors. You can find a copy of the Audit committee mandate at Appendix A. The following is a brief summary of the education and experience of each member of the Audit Committee that is relevant to his or her performance or his or her responsibilities as a member of the Audit Committee: Normand Morin Chairman of the Audit Committee Mr. Normand Morin was Executive VP at SNC-Lavalin where he spent 33 years (retired in 2004) working on large domestic and international projects. He is a graduate of M.I.T. (Ph.D) and Harvard (Management) and is a Fellow of the Engineering Institute of Canada. He previously held directorships with Groupe Canam, Ovivo Inc, Trévi Inc and Montreal Port Authority. Claude Garcia Mr. Garcia was appointed President, Canadian operations of The Standard Life Assurance Company in June 1991 and retired in the same capacity in December 2004. Mr. Garcia is a graduate of Laval University in Actuarial Science and a Fellow of the Canadian Institute of actuaries. Mr Garcia has been Chairman of the Board of the Agence des partenariats public-privé du Québec and of the Université du Québec à Montréal (UQAM). During his carrier, he has been a director of many organizations, including, the Standard Life Assurance Company, Montreal Stock Exchange, Cogeco, the Caisse de dépôt et placement du Québec, the Clinical Research Institute of Montreal and the Montreal Chamber of Commerce. Alain Côté Mr. Côté was an audit partner at Deloitte. He has assumed many responsibilities in particular as Quebec Managing Partner and Co-Director of Operations of the Assurance and Advisory practice. Having developed an extensive experience in the financial sector, his areas of expertise include audit services, public and private financing, due diligence reviews, and reviews of internal control and risk management systems. Mr. Côté is a graduate of Laval University in Accounting Science and Fellow of the Ordre des Comptables Professionnels Agréés du Québec. He was Chair of the board of the Ordre des Comptables Agréés du Québec (now Ordre des Comptables Professionnels Agréés du Québec), Vice-Chair of the board of the Canadian Institute of the Chartered Accountants and Chair of the board of CPA Canada. He was also a member of the board and the finance and audit committee of the Board of Trade of Metropolitan Montreal. . He is now a member of the board and the Chair of the audit committee of Caisse de dépôt et placement du Québec, Aéroport de Montréal, Chambre de l'assurance de dommages and the Laval University Foundation. Stephen A. Jarislowsky - C.C., G.O.Q., M.A., Ll.D Mr. Jarislowsky is founder and chairman emeritus of Jarislowsky, Fraser Limited, a director of Goodfellow Inc., the Canadian Coalition for Good Governance, Foundation for advancement of shareholders rights as well as a director of L'institut sur la gouvernance d'organisations privées et publiques. Mr. Jarislowsky was also a director of many prominent Canadian organizations. Mr. Jarislowsky received a B.Sc. from Cornell, a Masters of Business Administration from Harvard Graduate School of Business Administration, a M.A. from the University of Chicago and Honourary Law Degrees from Queen's University, University of Montreal, University of Alberta, McMaster University, Laval University, Concordia University, University of Windsor, Simon Fraser University, University of Ottawa, University of Québec, McGill University and Mount St. Vincent in Halifax. He is a Companion of the Order of Canada and a Grand Officier de l'Ordre du Quebec and enrolled in the Canadian Business Hall of Fame. 9.1 Audit fees The aggregate fees billed by the independent auditors to the Corporation and its subsidiaries for audit services and for services normally provided by the independent auditors, such as services in connection with statutory and regulatory filings were $182,000 in fiscal 2020 (same in fiscal 2019). 9.2 Audit related fees The aggregate fees billed by the independent auditors to the Corporation and its subsidiaries for audit related services were $19,000 in fiscal 2020 ($9,750 in fiscal 2019). 9.3 Tax fees The aggregate fees billed by the independent auditors to the Corporation and its subsidiaries for professional services rendered for tax compliance, tax advice, tax planning were $42,150 in fiscal 2020 ($26,250 in fiscal 2019). These services were comprised of consultations related to tax compliance, tax advice and tax planning. ITEM 10 - INTERESTS OF EXPERTS During fiscal 2020, Goodfellow Inc. engaged the services of the following experts to provide services to the Corporation: Auditors: Other:  KPMG LLP, Montreal - Income tax  Mercer Human Resource Consulting, Montréal - Pension plan  IFRS Perspective Inc. (IFRS) ITEM 11 - ADDITIONAL INFORMATION Additional information, including directors' and officers' remuneration and indebtedness, principal holders of Goodfellow securities, options to purchase securities and interests of insiders in material transactions, where applicable, is contained in the Goodfellow 2020 Notice of Annual Meeting and Management Proxy Circular, under the heading "Remuneration of Directors and Executive Officers". Additional financial information, including comparative audited financial statements and management's discussion and analysis, is provided in the Goodfellow 2020 Annual Report to Shareholders. A 2020 Annual Report to Shareholders and additional information concerning the Corporation can be found on SEDAR at www.sedar.com and may also be obtained upon request to the Chief Financial Officer, Goodfellow Inc., 225 Goodfellow Street, Delson, Quebec, J5B 1V5. APPENDIX A 1. Formation. The Board of Directors may appoint annually from its members an Audit Committee consisting of such number of members as the Board of Directors may from time to time determine, but not less than three. The Audit Committee shall determine its own organization and procedure, except as provided in the By-Laws of the Corporation or as may be otherwise determined by the Board of Directors. 2. Tenure and Office. All members of the Audit Committee shall be appointed by the Board of Directors. The Board of Directors may remove from office any member of the Audit Committee, with or without cause. Any vacancy in the membership of the Audit Committee may be filled by the Board of Directors. All members of the Audit Committee shall cease to be in office at the close of each annual meeting of shareholders. 3. Powers. The Audit Committee shall advise and assist the Board of Directors on financial matters, including without limiting the generality of the foregoing, the following: - Review the recommendations of the officers of the Corporation as to the appointment of independent auditors, verify the independence of the independent auditors and make recommendations to the Board of Directors with respect to the nomination and remuneration of independent auditors to be appointed at each annual meeting of shareholders; - Oversee the work of the independent auditors engaged for the purpose of preparing or issuing an auditor's report or performing other audit review or attest services for the Corporation, including the resolution of disagreements between management and the independent auditors regarding financial reporting; review with the independent auditors the scope and timing of their audit services and any other services they are asked to perform, their report on the Corporation's accounts following completion of the audit and the Corporation's policies and procedures with respect to internal accounting and financial controls, discussion of quality and depths of staffing in the accounting and financial departments, discussion of implementation of new accounting systems (e.g. computers), discussion of recent prospective releases of CPA Canada and their impact on the Corporation's financial statements, discussion of the need to extend the audit examination into areas beyond those required under a normal statutory audit; - Pre-approve all non-audit services in excess of 5% of the audit fees to be provided to the Corporation or its subsidiary entities by the Corporation's independent auditors; - Review the audited annual financial statements, the unaudited interim quarterly financial statements, the annual and interim management's discussion and analysis and the annual and interim earnings press releases of the Corporation and report thereon to the Board of Directors of the Corporation before approval thereof by the Board of Directors and prior to disclosure thereof to securities authorities, shareholders and the public; - See, to its satisfaction, that adequate procedures are in place for the review of the Corporation's public disclosure of financial information extracted or derived from its financial statements and periodically assess the adequacy of those procedures; - Review the internal control procedures of the Corporation and advise the directors on auditing practices and procedures as part of the responsibility of directors to meet their moral and legal responsibilities to the Corporation; - Review and approve the Corporation's hiring policies regarding partners, employees and former partners and employees of the present and former independent auditors of the Corporation; - Establish procedures for (i) the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters and (ii) the confidential and anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters; - Review the accuracy and reliability of data to be disclosed to interested parties; - Review the relationship among independent auditors, internal auditors, if any, and employees; - Review management plans regarding any requirement for revised accounting practices; - Review the independent auditors recommendation for improvements in the Corporation's operation and internal controls generally, and in particular, computer information and controls; - Determine, based on its review and discussion, whether to recommend the approval by the Board of such financial statements and MD&A. The financial disclosure in any prospectus or other similar document and the Annual Information Return. 4. Accountability of Independent Auditors. The independent auditors are ultimately accountable to the Board of Directors and the Audit Committee as representatives of shareholders. 5. Signed Resolution. A resolution in writing signed by all members of the Audit committee entitled to vote on that resolution at a meeting of the Audit Committee is as valid as if its had been passed at a meeting of the Audit Committee. A copy of every resolutions referred to in this paragraph shall be kept with the minutes of the meetings of the Audit Committee. 6. Chairman, Quorum and Procedure. The Audit Committee shall have the power to appoint a Chairman and a Vice-Chairman, to fix its quorum, which quorum shall consist of not less than a majority of its members, and to determine its procedure. 7. Meetings. Meetings of the Audit Committee may be held at the registered office of the Corporation or at such other places within or without Canada as the Audit Committee may from time to time determine. Meetings of the Audit Committee may be called by the order of the President of the Corporation, the Chairman of the Audit Committee, or any two (2) members thereof. Attachments

Predict your next investment

The CB Insights tech market intelligence platform analyzes millions of data points on venture capital, startups, patents , partnerships and news mentions to help you see tomorrow's opportunities, today.

CB Insights uses Cookies

CBI websites generally use certain cookies to enable better interactions with our sites and services. Use of these cookies, which may be stored on your device, permits us to improve and customize your experience. You can read more about your cookie choices at our privacy policy here. By continuing to use this site you are consenting to these choices.