#2567922 v2 - CSA STAFF NOTICE 52-318 AUDIT COMMITTEE FOLL…

Canadian Securities Autorités canadiennes Administrators en valeurs mobilières CSA/ACVM Notice 52-318 Audit Committee Follow-Up Compliance Review June 29, 2007 Introduction As announced in CSA Staff Notice 52-312 that was published on January 13, 2006, staff of the securities regulatory authorities in Alberta, Saskatchewan, Manitoba, Ontario and Québec (the participating jurisdictions) conducted a follow-up review of compliance with the provisions of Multilateral Instrument 52-110 Audit Committees (the Instrument). The follow-up review was necessitated by the inadequate level of compliance with the Instrument that was communicated in CSA Staff Notice 52-312. This notice outlines the results of our follow-up review. The Instrument The Instrument came into force on March 30, 2004 in every jurisdiction in Canada except British Columbia and Québec. In Québec, it came into force on June 30, 2005. The Instrument applies to all reporting issuers with limited exceptions. The Instrument prescribes three broad sets of requirements: • all members of the audit committee must be independent and financially literate (venture issuers, as that term is defined in the Instrument, are exempt from these requirements); • an audit committee must have all of the responsibilities prescribed by the Instrument which should be set out in its charter; and • a reporting issuer must include certain disclosure in its AIF, management information circular ...