NORTHWESTERN MINERAL VENTURES INC.
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
I PURPOSE
The Audit Committee (the "COMMITTEE") is appointed by the Board of Directors
(the "BOARD") of Northwestern Mineral Ventures Inc. (the "CORPORATION") to
assist the Board in fulfilling its oversight responsibilities relating to
financial accounting and reporting process and internal controls for the
Corporation. The Committee's primary duties and responsibilities are to:
o conduct such reviews and discussions with management and the
external auditors relating to the audit and financial
reporting as are deemed appropriate by the Committee;
o assess the integrity of internal controls and financial
reporting procedures of the Corporation and ensure
implementation of such controls and procedures;
o ensure that there is an appropriate standard of corporate
conduct including, if necessary, adopting a corporate code of
ethics for senior financial personnel;
o review the quarterly and annual financial statements and
management's discussion and analysis of the Corporation's
financial position and operating results and report thereon to
the Board for approval of same;
o select and monitor the independence and performance of the
Corporation's external auditors, including attending at
private meetings with the external auditors and reviewing and
approving all renewals or dismissals of the external auditors
and their remuneration; and
o provide oversight to related party transactions entered into
by the Corporation.
The Committee has the authority to conduct any investigation appropriate to its
responsibilities, and it may request the external auditors as well as any
officer of the Corporation, or outside counsel for the Corporation, to attend a
meeting of the Committee or to meet with any members of, or advisors to, the
Committee. The Committee shall have unrestricted access to the books and records
of the Corporation and has the authority to retain, at the expense of the
Corporation, special legal, accounting, or other consultants or experts to
assist in the performance of the Committee's duties.
The Committee shall review and assess the adequacy of this Charter annually and
submit any proposed revisions to the Board for approval.
In fulfilling its responsibilities, the Committee will carry out the specific
duties set out in Part IV of this Charter.
II AUTHORITY OF THE AUDIT COMMITTEE
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The Committee shall have the authority to:
(a) engage independent counsel and other advisors as it determines necessary to
carry out its duties;
(b) set and pay the compensation for advisors employed by the Committee; and
(c) communicate directly with the internal and external auditors.
III COMPOSITION AND MEETINGS
1. The Committee and its membership shall meet all applicable legal,
regulatory and listing requirements, including, without limitation,
those of the Ontario Securities Commission ("OSC"), the TSX Venture
Exchange, the Business Corporations Act (Ontario) and all applicable
securities regulatory authorities.
2. The Committee shall be composed of three or more directors as shall be
designated by the Board from time to time. The members of the Committee
shall appoint from among themselves a member who shall serve as Chair.
3. Each member of the Committee shall be "independent" and shall be
"financially literate" (as each such term is defined in Multilateral
Instrument 52-110).
4. The Committee shall meet at least quarterly, at the discretion of the
Chair or a majority of its members, as circumstances dictate or as may
be required by applicable legal or listing requirements. A minimum of
two and at least 50% of the members of the Committee present either in
person or by telephone shall constitute a quorum.
5. If within one hour of the time appointed for a meeting of the
Committee, a quorum is not present, the meeting shall stand adjourned
to the same hour on the next business day following the date of such
meeting at the same place. If at the adjourned meeting a quorum as
hereinbefore specified is not present within one hour of the time
appointed for such adjourned meeting, such meeting shall stand
adjourned to the same hour on the second business day following the
date of such meeting at the same place. If at the second adjourned
meeting a quorum as hereinbefore specified is not present, the quorum
for the adjourned meeting shall consist of the members then present.
6. If and whenever a vacancy shall exist, the remaining members of the
Committee may exercise all of its powers and responsibilities so long
as a quorum remains in office.
7. The time and place at which meetings of the Committee shall be held,
and procedures at such meetings, shall be determined from time to time
by the Committee. A meeting of the Committee may be called by letter,
telephone, facsimile, email or other communication equipment, by giving
at least 48 hours notice, provided that no notice of a meeting shall be
necessary if all of the members are present either in person or by
means of conference telephone or if those absent have waived notice or
otherwise signified their consent to the holding of such meeting.
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8. Any member of the Committee may participate in the meeting of the
Committee by means of conference telephone or other communication
equipment, and the member participating in a meeting pursuant to this
paragraph shall be deemed, for purposes hereof, to be present in person
at the meeting.
9. The Committee shall keep minutes of its meetings which shall be
submitted to the Board. The Committee may, from time to time, appoint
any person who need not be a member, to act as a secretary at any
meeting.
10. The Committee may invite such officers, directors and employees of the
Corporation and its subsidiaries as the Committee may see fit, from
time to time, to attend at meetings of the Committee.
11. Any matters to be determined by the Committee shall be decided by a
majority of votes cast at a meeting of the Committee called for such
purpose. Actions of the Committee may be taken by an instrument or
instruments in writing signed by all of the members of the Committee,
and such actions shall be effective as though they had been decided by
a majority of votes cast at a meeting of the Committee called for such
purpose. All decisions or recommendations of the Committee shall
require the approval of the Board prior to implementation.
The Committee members will be elected annually at the first meeting of the Board
following the annual general meeting of shareholders.
IV RESPONSIBILITIES
A FINANCIAL ACCOUNTING AND REPORTING PROCESS AND INTERNAL CONTROLS
1. The Committee shall review the annual audited financial statements to
satisfy itself that they are presented in accordance with applicable
generally accepted accounting principles ("GAAP") and report thereon to
the Board and recommend to the Board whether or not same should be
approved prior to their being filed with the appropriate regulatory
authorities. The Committee shall also review the interim financial
statements. With respect to the annual audited financial statements,
the Committee shall discuss significant issues regarding accounting
principles, practices, and judgments of management with management and
the external auditors as and when the Committee deems it appropriate to
do so. The Committee shall satisfy itself that the information
contained in the annual audited financial statements is not
significantly erroneous, misleading or incomplete and that the audit
function has been effectively carried out.
2. The Committee shall review any internal control reports prepared by
management and the evaluation of such report by the external auditors,
together with management's response.
3. The Committee shall be satisfied that adequate procedures are in place
for the review of the Corporation's public disclosure of financial
information extracted or derived from the Corporation's financial
statements, management's discussion and analysis and interim earnings
press releases, and periodically assess the adequacy of these
procedures.
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4. The Committee shall review management's discussion and analysis
relating to annual and interim financial statements and any other
public disclosure documents, including interim earnings press releases,
that are required to be reviewed by the Committee under any applicable
laws before the Corporation publicly discloses this information.
5. The Committee shall meet no less frequently than annually with the
external auditors and the Chief Financial Officer or, in the absence of
a Chief Financial Officer, with the officer of the Corporation in
charge of financial matters, to review accounting practices, internal
controls and such other matters as the Committee, Chief Financial
Officer or, in the absence of a Chief Financial Officer, the officer of
the Corporation in charge of financial matters, deem appropriate.
6. The Committee shall inquire of management and the external auditors
about significant risks or exposures, both internal and external, to
which the Corporation may be subject, and assess the steps management
has taken to minimize such risks.
7. The Committee shall review the post-audit or management letter
containing the recommendations of the external auditors and
management's response and subsequent follow-up to any identified
weaknesses.
8. The Committee shall ensure that there is an appropriate standard of
corporate conduct including, if necessary, adopting a corporate code of
ethics for senior financial personnel.
9. The Committee shall establish procedures for:
(a) the receipt, retention and treatment of complaints received by
the Corporation regarding accounting, internal accounting
controls or auditing matters; and
(b) the confidential, anonymous submission by employees of the
Corporation of concerns regarding questionable accounting or
auditing matters.
10. The Committee shall provide oversight to related party transactions
entered into by the Corporation.
B INDEPENDENT AUDITORS
1. The Committee shall recommend to the Board the external auditors to be
nominated, shall set the compensation for the external auditors,
provide oversight of the external auditors and shall ensure that the
external auditors report directly to the Committee.
2. The Committee shall be directly responsible for overseeing the work of
the external auditors, including the resolution of disagreements
between management and the external auditors regarding financial
reporting.
3. The Committee shall pre-approve all audit and non-audit services not
prohibited by law to be provided by the external auditors in
accordance with this Charter.
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4. The Committee shall monitor and assess the relationship between
management and the external auditors and monitor, support and assure
the independence and objectivity of the external auditors.
5. The Committee shall review the external auditors' audit plan,
including the scope, procedures and timing of the audit.
6. The Committee shall review the results of the annual audit with the
external auditors, including matters related to the conduct of the
audit.
7. The Committee shall obtain timely reports from the external auditors
describing critical accounting policies and practices, alternative
treatments of information within GAAP that were discussed with
management, their ramifications, and the external auditors' preferred
treatment and material written communications between the Corporation
and the external auditors.
8. The Committee shall review fees paid by the Corporation to the
external auditors and other professionals in respect of audit and
non-audit services on an annual basis.
9. The Committee shall review and approve the Corporation's hiring
policies regarding partners, employees and former partners and
employees of the present and former auditors of the Corporation.
10. The Committee shall monitor and assess the relationship between
management and the external auditors and monitor and support the
independence and objectivity of the external auditors.
C OTHER RESPONSIBILITIES
The Committee shall perform any other activities consistent with this Charter
and governing law, as the Committee or the Board deems necessary or appropriate.
NORTHWESTERN MINERAL VENTURES INC.
PROCEDURES FOR RECEIPT OF COMPLAINTS AND SUBMISSIONS
RELATING TO ACCOUNTING MATTERS
1. The Corporation shall inform employees on the Corporation's intranet,
if there is one, or via a newsletter or e-mail that is disseminated to
all employees at least annually, of the officer (the "COMPLAINTS
OFFICER") designated from time to time by the Committee to whom
complaints and submissions can be made regarding accounting, internal
accounting controls or auditing matters or issues of concern regarding
questionable accounting or auditing matters.
2. The Complaints Officer shall be informed that any complaints or
submissions so received must be kept confidential and that the identity
of employees making complaints or submissions shall be kept
confidential and shall only be communicated to the Committee or the
Chair of the Committee.
3. The Complaints Officer shall be informed that he or she must report to
the Committee as frequently as such Complaints Officer deems
appropriate, but in any event no less frequently than on a quarterly
basis prior to the quarterly meeting of the Committee called to approve
interim and annual financial statements of the Corporation.
4. Upon receipt of a report from the Complaints Officer, the Committee
shall discuss the report and take such steps as the Committee may deem
appropriate.
5. The Complaints Officer shall retain a record of a complaint or
submission received for a period of six years following resolution of
the complaint or submission.
NORTHWESTERN MINERAL VENTURES INC.
PROCEDURES FOR APPROVAL OF NON-AUDIT SERVICES
1. The Corporation's external auditors shall be prohibited from performing
for the Corporation the following categories of non-audit services:
(a) bookkeeping or other services related to the Corporation's
accounting records or financial statements;
(b) financial information systems design and implementation;
(c) appraisal or valuation services, fairness opinion or
contributions-in-kind reports;
(d) actuarial services;
(e) internal audit outsourcing services;
(f) management functions;
(g) human resources;
(h) broker or dealer, investment adviser or investment banking
services;
(i) legal services;
(j) expert services unrelated to the audit; and (k) any other service
that the Canadian Public Accountability Board determines is
impermissible.
2. In the event that the Corporation wishes to retain the services of the
Corporation's external auditors for tax compliance, tax advice or tax
planning, the Chief Financial Officer of the Corporation shall consult
with the Chair of the Committee, who shall have the authority to
approve or disapprove on behalf of the Committee, such non-audit
services. All other non-audit services shall be approved or disapproved
by the Committee as a whole.
3. The Chief Financial Officer of the Corporation shall maintain a record
of non-audit services approved by the Chair of the Committee or the
Committee for each fiscal year and provide a report to the Committee no
less frequently than on a quarterly basis.
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