Zecotek is committed to the highest standards of corporate governance. The Board of Directors and each of its committees continue to refine the Corporation’s governance policies and practices in light of regulatory initiatives in North America that have been adopted to improve corporate governance.
Statement of Corporate Governance | Mandate of The Board | Audit Committee
Statement of Corporate Governance Practices
Mandate Of The Board
Zecotek's Board of Directors assumes responsibility for the stewardship of the Corporation.
- Adopting a strategic planning process, reviewing and approving, at least annually, a strategic business plan that takes into account the opportunities and risks of the business, and monitoring the implementation of the business plan by management.
- Selecting the Chief Executive Officer (CEO), appointing executive management and monitoring their performance.
- Satisfying itself as to the integrity of the CEO and other executive officers and that the CEO and other executive officers create a culture of integrity throughout the organization.
- Together with the CEO, developing and maintaining a clear written position description for the CEO, including delineating management’s responsibilities and approving the corporate goals that the CEO is responsible for meeting.
- Identifying the principal risks of the Corporation’s business and ensuring the implementation of the appropriate systems to manage these risks.
- Overseeing succession planning for the Corporation including appointing and monitoring senior management.
- Adopting a communications policy which deals with how the Corporation interacts with analysts, investors and the public.
- Developing and maintaining clear written position descriptions for the Lead Director and the Chair of each committee of the Board.
- Developing the Corporation’s approach to corporate governance.
On an ongoing basis, as part of regular Board meetings the Directors receive presentations from management personnel and outside consultants to improve their understanding of Zecotek’s business. In addition, meetings of the Board are regularly held in order to assist the Directors in better understanding Zecotek’s operations. The frequency of meetings, as well as the nature of items discussed, depend upon the state of Zecotek’s affairs and the opportunities or risks that Zecotek faces.
INFORMATION CONCERING THE AUDIT COMMITTEE
The Company’s audit committee has various responsibilities as set forth in Multilateral Instrument 52-110 made under securities legislation, among such responsibilities being a requirement that the audit committee establish a written charter that sets out its mandate and responsibilities.
Composition of the Audit Committee
The following are the current members of the Committee:
David Toyoda, Chairman Independent (1) Financially literate (1)
Dr. Jalil Ali, Independent (1) Financially literate (1)
Dr. Faouzi Zerrouk, Non-Independent (1), Financially literate (1)
(1) As defined by Multilateral Instrument 52-110.
Audit Committee Oversight
At no time since the commencement of the Company’s most recently completed financial year was a recommendation of the Committee to nominate or compensate an external auditor not adopted by the Board of Directors.
Reliance on Certain Exemptions
At no time since the commencement of the Company’s most recently completed financial year has the Company relied on the exemption in Section 2.4 of MI 52-110 (de minimis Non-audit Services), or an exemption from MI 52-110, in whole or in part, granted under Part 8 of Multilateral Instrument 52-110.
Pre-Approval Policies and Procedures
The Audit Committee must pre-approve all audit and non-audit services provided by the independent auditor, other than any de minimus non-audit services allowed by applicable law or regulation.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS CHARTER
Purpose of the Committee
The purpose of the Audit Committee (the “Committee?) of the Board of Directors (the “Board?) of the Company is to provide an open avenue of communication between management, the Company’s independent auditors and the Board and to assist the Board in its oversight of:
(a) the integrity, adequacy and timeliness of the Company’s financial reporting and disclosure practices;
(b) the Company’s compliance with legal and regulatory requirements related to financial reporting; and
(c) the independence and performance of the Company’s independent auditors.
The Committee shall also perform any other activities consistent with this Charter, the Company’s Bylaws and governing laws as the Committee or Board deems necessary or appropriate. The Committee shall consist of at least three directors. Members of the Committee shall be appointed by the Board and may be removed by the Board at its discretion. The members of the Committee shall elect a Chairman from among their number. A majority of the members of the Committee must not be officers or employees of the Company or of an affiliate of the Company. The quorum for a meeting of the Committee is a majority of the members who are not officers or employees of the Company or of an affiliate of the Company. With the exception of the foregoing quorum requirement, the Committee may determine its own procedures.
The Committee’s role is one of oversight. Management is responsible for preparing the Company’s financial statements and other financial information and for the fair presentation of the information set forth in the financial statements in accordance with generally accepted accounting principles (“GAAP?). Management is also responsible for establishing internal controls and procedures and for maintaining the appropriate accounting and financial reporting principles and policies designed to assure compliance with accounting standards and all applicable laws and regulations.
The independent auditors’ responsibility is to audit the Company’s financial statements and provide their opinion, based on their audit conducted in accordance with generally accepted auditing standards, that the financial statements present fairly, in all material respects, the financial position, results of operations and cash flows of the Company in accordance with GAAP.
The Committee is responsible for recommending to the Board the independent auditors to be nominated for the purpose of auditing the Company’s financial statements, preparing or issuing an auditor’s report or performing other audit, review or attest services for the Company, and for reviewing and recommending the compensation of the independent auditors. The Committee is also directly responsible for the evaluation of and oversight of the work of the independent auditors. The independent auditors shall report directly to the Committee.
Authority and Responsibilities
In addition to the forgoing, in performing its oversight responsibilities the Committee shall:
- Monitor the adequacy of this Charter and recommend any proposed changes to the Board.
- Review the appointments of the Company’s Chief Financial Officer and any other key financial executives involved in the financial reporting process.
- Review with management and the independent auditors the adequacy and effectiveness of the Company’s accounting and financial controls and the adequacy and timeliness of its financial reporting process.
- Review with management and the independent auditors the annual financial statements and related documents and review with management the unaudited quarterly financial statements and related documents, prior to filing or distribution, including matters required to be reviewed under applicable legal or regulatory requirements.
- Where appropriate and prior to release, review with management any news releases that disclose annual or interim financial results or contain other significant financial information that has not previously been released to the public.
- Review the Company’s financial reporting and accounting standards and principles and significant changes in such standards or principles or in their application, including key accounting decisions affecting the financial statements, alternatives thereto and the rationale for decisions made.
- Review the quality and appropriateness of the accounting policies and the clarity of financial information and disclosure practices adopted by the Company, including consideration of the independent auditors’ judgment about the quality and appropriateness of the Company’s accounting policies. This review may include discussions with the independent auditors without the presence of management.
- Review with management and the independent auditors significant related party transactions and potential conflicts of interest.
- Pre-approve all non-audit services to be provided to the Company by the independent auditors.
- Monitor the independence of the independent auditors by reviewing all relationships between the independent auditors and the Company and all non-audit work performed for the Company by the independent auditors.
- Establish and review the Company’s procedures for the:
a) receipt, retention and treatment of complaints regarding accounting, financial disclosure, internal controls or auditing matters; and
b) confidential, anonymous submission by employees regarding questionable accounting, auditing and financial reporting and disclosure matters.
- Conduct or authorize investigations into any matters that the Committee believes is within the scope of its responsibilities. The Committee has the authority to retain independent counsel, accountants or other advisors to assist it, as it considers necessary, to carry out its duties, and to set and pay the compensation of such advisors at the expense of the Company.
- Perform such other functions and exercise such other powers as are prescribed from time to time for the Audit Committee of a reporting company in Parts 2 and 4 of Multilateral Instrument 52-110 of the Canadian Securities Administrators, the Business Corporations Act (British Columbia) and the Articles of the Company.
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For Additional Information Please Contact:
Zecotek Photonics Inc.
T: (604) 783-8291