index

• Purpose of the Audit Committee
• Responsibilities of the Committee
• Powers of the Committee
• Composition of the Committee
• Meetings of the Audit Committee

Purpose of the Audit Committee

1. The purpose of the Audit Committee (the “Committee”) of the Board of Directors (the “Board”) is to assist the Board in its oversight of: (i) the integrity of the Company’s financial statements and other relevant public disclosures; (ii) the Company’s compliance with legal and regulatory requirements relating to financial reporting; (iii) the external auditors’ qualifications and independence; and (iv) the performance of the internal and external auditors.

2. The Committee’s function is overseeing. The members of the Committee are not fulltime employees of the Company. The Company’s management is responsible for the preparation of the Company’s financial statements in accordance with applicable accounting standards, and applicable laws and regulations. The Company’s external auditors are responsible for the audit or review, as applicable, of the Company’s financial statements in accordance with applicable audit standards, laws and regulations.

Responsibilities of the Committee

3. The Committee’s responsibilities shall include:

(i) retaining and terminating, and/or making recommendations to the Board of Directors and the shareholders with respect to the retention or termination of, an external auditor firm to conduct the Corporation’s annual audit;

(ii) communicating to the external auditors that they are ultimately accountable to the Board and the Committee as representatives of the shareholders;

(iii) approving, or recommending to the Board of Directors for approval, all audit engagement fees and terms, as well as all non-audit engagements of the external auditors;

(iv) reviewing with the external auditors, the audit plan and scope;

(v) reviewing the annual audited financial statements and “management’s discussion and analysis of financial and operating results” and recommending the financial statements to the Board for approval;

(vi) reviewing with the external auditors, any issues and management’s response, including any restrictions on the scope of the external auditors’ activities or requested information and any significant disagreements with management and resolving any disputes;

(vii) reviewing the quarterly financial statements and “management’s discussion and analysis of financial and operating results”, prior to filing with securities regulatory authorities and delivery to shareholders;

(viii) discussing with management the Company’s earnings press releases, as well as financial information and earnings guidance;

(ix) reviewing such other relevant public disclosures containing financial information as the Committee may consider necessary or appropriate;

(x) reviewing with management and the external auditors, the Company’s critical accounting policies and practices, material alternative accounting treatments and material written communications between the external auditor and management (including management representation letters and any schedule of unadjusted differences);

(xi) enquiring as to the adequacy of the Company’s system of internal controls;

(xii) discussing with management the Company’s internal audit mandate and responsibilities, meeting with the head of internal audit, on a periodic basis;

(xiii) obtaining and reviewing an annual report prepared by the external auditors describing: the firm’s internal quality-control procedures; any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and (to assess the auditor’s independence) all relationships between the external auditors and the Company;

(xiv) meeting separately, periodically with each of management, the internal auditors and the external auditors;

(xv) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls or auditing matters;

(xvi) establishing procedures for the confidential, anonymous submission by Company employees about concerns regarding questionable accounting or audit matters;

(xvii) reporting regularly to the Board;

(xviii) reviewing and assessing its mandate and recommending any proposed changes to the Corporate Governance and Nominating Committee of the Board on an annual basis; and

(xix) evaluating the functioning of the Committee on an annual basis.

Powers of the Committee

4. The Committee shall have the authority, including approval of fees and other retention terms, to obtain advice and assistance from outside legal, accounting or other advisors in its sole discretion, at the expense of the Corporation, which shall provide the Committee with adequate funding for such purposes. The Committee shall have unrestricted access to management, the external and internal auditors, including private meetings, as necessary or appropriate. The Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Committee.

Composition of the Committee

5. The Committee shall be appointed annually by the Board and shall comprise a minimum of two directors, a majority of whom shall be Mexican, Canadian or American nationals. If an appointment of members of the Committee is not made as prescribed, the members shall continue as such until their successors are appointed.

6. All of the Committee members shall be directors whom the Board has determined are independent, taking into account the applicable rules and regulations of securities regulatory authorities and/or stock exchanges.

7. Each Committee member shall be “financially literate” and at least one Committee member shall have “accounting or related financial management expertise”.

Meetings of the Audit Committee

8. The Committee shall hold a minimum of two meetings per year.

9. The time and place of the Committee meetings, the calling of meetings and the procedure for all things at such meetings shall be determined by the Committee Chairman.

10 For purposes of this mandate, “financially literate” means the ability to read and understand a balance sheet, an income statement, a cash flow statement and the related notes, and “accounting or related financial management expertise” means the ability to analyze and interpret a full set of financial statements, including the related notes.