Audit Committee

Purpose

The Audit Committee (hereinafter referred to as "the Committee") is established by the Board of Directors (hereinafter referred to as "the Board") of Vertotech Aerospace Ltd. (hereinafter referred to as "the Company") to assist the Board in fulfilling its oversight responsibilities. The Committee's primary duties and responsibilities are to:

  • Oversee the integrity of the Company’s financial statements.
  • Monitor the effectiveness of the Company’s internal control system.
  • Oversee the performance of the internal and external auditors.
  • Ensure compliance with legal and regulatory requirements.

Composition

  • The Committee shall consist of at least three (3) members of the Board, all of whom shall be Independent Directors.
  • All members of the Committee shall be financially literate, and at least one member shall have accounting or related financial management expertise.
  • The Chairman of the Committee shall be an Independent Director, appointed by the Board.

Meetings

  • The Committee shall meet at least four (4) times a year, with authority to convene additional meetings as circumstances require.
  • The quorum for meetings shall be two (2) members.
  • The Committee may invite members of management, internal auditors, external auditors, or others to attend meetings and provide pertinent information, as necessary.
  • Minutes of each meeting shall be prepared and circulated to the Committee members and the Board.

Roles and Responsibilities

Financial Reporting

  • Review and discuss with management and the external auditors the annual audited financial statements, quarterly financial statements, and any other significant financial disclosures before submission to the Board for approval.
  • Ensure that the financial statements are accurate, complete, and prepared in accordance with applicable accounting standards.

Internal Controls

  • Monitor the effectiveness of the Company’s internal control systems, including IT security and control processes.
  • Review reports on significant findings of internal audits and management's response to them.
  • Assess the adequacy of internal controls over financial reporting and the safeguarding of assets.

Internal Audit

  • Review and approve the internal audit plan, scope, and budget.
  • Oversee the performance and effectiveness of the internal audit function.
  • Review reports from internal auditors on significant risk exposures and control issues.

External Audit

  • Recommend to the Board the appointment, reappointment, or replacement of the external auditor, including terms of engagement and audit fees.
  • Oversee the external audit process, including the scope of the audit, audit plan, and results.
  • Review and discuss with the external auditor any audit problems or difficulties and management’s response to such issues.
  • Evaluate the independence, objectivity, and performance of the external auditor.

Compliance

  • Ensure compliance with legal and regulatory requirements, including corporate governance standards and the Company’s Code of Conduct.
  • Review any related party transactions and potential conflicts of interest that may affect the Company.
  • Establish procedures for the receipt, retention, and treatment of complaints regarding accounting, internal controls, or auditing matters.

Risk Management

  • Oversee the Company’s risk management processes, including the identification, assessment, and mitigation of significant risks.
  • Review and evaluate the Company’s risk management framework, including the effectiveness of risk management policies and procedures.

Reporting Responsibilities

  • Report regularly to the Board on the Committee's activities, findings, and recommendations.
  • Review and approve the disclosures included in the Company’s annual report concerning the Committee’s activities.

Authority

  • The Committee is authorized to seek any information it requires from employees, management, and external parties.
  • The Committee may engage independent counsel, accountants, or other advisors to assist in fulfilling its duties.
  • The Committee shall have access to sufficient resources to carry out its responsibilities, including access to the Company’s records and information.

Evaluation and Review

  • The Committee shall annually review its performance and the adequacy of this charter, recommending any necessary changes to the Board for approval.
  • The Committee shall ensure that the charter is publicly available and periodically reviewed to reflect best practices and legal requirements.

Date of Adoption: [Insert Date]

Approved by: Board of Directors, Vertotech Aerospace Ltd.