Audit and Investment Committee Terms of Reference

Members

  • Pete Desai (chair)
  • Sylvie Dillard
  • René Douville
  • Lorne Hepworth

Introduction

Genome Canada’s Audit and Investment Committee is established to assist the Board of Directors in fulfilling its legal and fiduciary obligations with respect to matters involving:

  • the integrity of its accounting, auditing, financial reporting, internal controls and financially related legal compliance functions of Genome Canada; and,
  • the investment management of any funds at the disposal of Genome Canada.

The Audit and Investment Committee is a permanent committee of the Board of Directors, and has been given the authority, responsibility and specific duties as described below.

Authority

The Audit and Investment Committee is constituted pursuant to bylaw 7 and Article 4 of the Funding Agreement signed as of March 31, 2008 between Genome Canada and Industry Canada.

Membership

Membership composition of the Audit and Investment Committee shall consist of a minimum of four members, including the Chair of the Committee. The Chair and members shall be members of the Board of Directors, appointed by the Board of Directors. The composition of the Audit and Investment Committee shall consist of a majority of independent directors. For the purposes of these terms of reference, a member is independent if they are not an employee of the organization and are free of any business or other relationship which could materially interfere with the exercise of their independent judgment, subject to appropriate disclosure, as the case may be.

All members of the Audit and Investment Committee shall be financially literate1; and have broad knowledge or experience in investment matters, and at least one member shall have accounting or related financial management expertise.

The President and Chief Executive Officer, the Vice-President Finance and the Chief Administrative Officer are usually invited to the Audit and Investment Committee meetings.

Terms

Members shall normally be appointed for a term of two (2) years, renewable.

Meetings

The Audit and Investment Committee shall meet (either face-to-face meeting or by conference call) at least four (4) times a year, with additional meetings called at the request of the Chair or a member of the Audit and Investment Committee, an officer of Genome Canada or the Chair of the Board of Directors.

As appropriate, the Audit and Investment Committee will meet in camera without members of management present.

Quorum

Quorum shall be a majority of its members present at the meeting, in person or by telephone.

Mandate

The Audit and Investment Committee is mandated by the Board of Directors to:

  • provide direction, oversight and advice with respect to the accounting, auditing, financial reporting, internal controls, corporate risk assessment, and financially related legal compliance functions of Genome Canada; and
  • provide direction, oversight and advice with respect to matters involving the investment management of any funds at the disposal of Genome Canada, including the formulating of investment policies and implementation strategies with respect to Genome Canada’s investments.

The Audit and Investment Committee shall exercise any other power and function which may be determined from time to time by the Board of Directors.

Roles and Responsibilities

The roles and responsibilities of the Audit and Investment Committee are as follows:

Accounting

  • Assess, in collaboration with the external auditor, the financial management system (including policies and procedures) regarding the adequacy, effectiveness and integrity of internal controls;
  • Ensure the creation of, and monitor procedures for reporting financial fraud and other fraudulent and inappropriate activities;

Risk Management

  • Review annually, and monitor, Genome Canada’s corporate risk profile, including its strategies and practices for assessment, management, prevention and mitigation of significant risks;

Auditing

  • Review and assess the external auditors’ terms of engagement and audit plan;
  • Review audited financial statements, including the review of any significant variances between comparative reporting periods;
  • Review and assess the post-audit or management letter which may include recommendations with respect to proposed changes in accounting practices or policies, any significant financial reporting issues, or the presentation and impact of significant risks and uncertainties and the financial statement impact thereof;
  • Monitor Genome Canada Management’s response and action plans with respect to responding to the external auditor’s recommendations;
  • Meet with the external auditor in camera (without management present), as required, to review issues and matters of concern respecting audits and financial reporting processes;
  • Recommend to the Board of Directors a firm of independent external auditors, including proposed fees;
  • Recommend to the Board of Directors the acceptance and approval of audited financial statements, audit report and management reports received from the external auditor;

Financial Reporting

  • Assess the annual budget of Genome Canada and its related assumptions, including revised budgets and forecasts of year-end results;
  • Review quarterly un-audited financial statements, high level cash flow reports, and the compliance certificate issued quarterly by the Vice-President Finance;

Investment

  • Review annually the Statement of Investment Policy;
  • Review annually the Investment Strategy (defined as the style of investment management, such as active versus passive managers, as well as specific investment instruments that would be used);
  • Monitor the implementation of the Investment Strategy, including assets mix, assessment of risk in respect of investment management, performance against appropriate, aggregate benchmarks, and specific investments outside of the delegated limits;
  • Review and evaluate Management’s procedures for monitoring compliance with the Statement of Investment Policy and Investment Strategy;
  • Monitor compliance by the external investment advisors and portfolio managers who have discretionary authority to invest Genome Canada funds;
  • Recommend to the Board of Directors the engagement of one or more independent, external investment advisors, as well as one or more professional portfolio managers to invest the funds against agreed to performance objectives;

Other Responsibilities

  • Review, as required, compliance with laws and regulations having to do with accounting and financial matters, and investment matters;
  • Retain, as required, independent counsel, accountants or other specialist to advise the Audit and Investment Committee or assist in the conduct of an investigation;
  • Respond to any matter that may be referred to the Audit and Investment Committee by the Board of Directors, and act according to the nature of the referral;
  • On an annual basis, review the Audit and Investment Committee’s mandate and terms of reference.

Reporting

The Chair of the Audit and Investment Committee will report at each meeting of the Board of Directors on all of its proceedings and recommendations since the last meeting of the Board of Directors. Minutes of meetings will be submitted to the Board of Directors for purposes of information.

History

The Terms of Reference of the Audit and Investment Committee were:

  • Adopted by the Board of Directors on September 22, 2011.

[1] Definition of financially literate is to have the ability to read and understand fundamental financial statements (balance sheet, an income statement, a cash flow statement and the notes attached thereto), and the ability to ask probing questions about the organization’s financial risks and accounting (TSX definition)


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