SUN INTERNATIONAL HOTELS LIMITED
AUDIT COMMITTEE CHARTER
I. PURPOSE
The Audit Committee is a committee of the Board of Directors. The primary
function of the Audit Committee is to assist the Board of Directors in
fulfilling its oversight responsibilities by reviewing the financial information
which will be provided to the stockholders and others, the systems of internal
controls which management and the Board of Directors have established, and the
audit process. The independent auditor is ultimately accountable to the Audit
Committee and the Board of Directors. The Audit Committee and the Board of
Directors have the ultimate authority and responsibility to select, evaluate
and, where appropriate, replace the independent auditor (or to nominate the
independent auditor to be proposed for stockholder approval in any proxy
statement.)
The Audit Committee will fulfill these responsibilities by carrying out the
activities enumerated in Sections III-VI of this Charter.
II. COMPOSITION OF THE AUDIT COMMITTEE
The Audit Committee consists of at least two directors with an increase to three
by June 2001, all of whom have no relationship to the Corporation that may
interfere with the exercise of their independence from management and the
Corporation. Each member of the Audit Committee shall meet the independence
requirements set forth in Rule 303.01 (B)(3) (or qualify for an exemption under
Rule 302(D)) of the New York Stock Exchange Listing Standards, as applicable,
and as may be modified or supplemented. Each member of the Audit Committee shall
be financially literate, as determined by the Corporation's Board of Directors
in its business judgment, or must become financially literate within a
reasonable period of time after his or her appointment to the Audit Committee.
At least one member of the Audit Committee shall have accounting or related
financial management expertise, as determined by the Board of Directors in its
business judgment.
The members of the Audit Committee shall be elected by the Board of Directors.
Unless a Chair is elected by the full Board of Directors, the members of the
Audit Committee may designate a Chair by majority vote of the full Audit
Committee membership. The duties and responsibilities of a member of the Audit
Committee are in addition to those duties of such member as a member of the
Board of Directors.
III. CONTINUOUS ACTIVITIES
The Audit Committee shall:
1. Provide an open avenue of communication between the independent auditor and
the Board of Directors.
2. Meet four times per year or more frequently as circumstances require. The
Audit Committee may ask members of management or others to attend meetings
and provide pertinent information as necessary.
3. Confirm and assure the independence of the independent auditor. With
respect to the independence of the independent auditor, the Audit Committee
must:
(a) Ensure that the independent auditor submits on a periodic basis to the
Audit Committee a formal written statement delineating all relationships
between the independent auditor and the Corporation. This statement must
comply with Independence Standards Board Standard No. 1, as may be modified
or supplemented;
(b) Actively engage in a dialogue with the independent auditor with respect to
any disclosed relationships or services that may impact the objectivity and
independence of the independent auditor; and
(c) Recommend that the Board of Directors take appropriate action in response
to the independent auditor's report to satisfy itself of the independent
auditor's independence.
4. Instruct the independent auditor that the Board of Directors and the Audit
Committee are the independent auditor's clients.
5. Inquire of management and the independent auditor about significant risks
or exposures and assess the steps management has taken to minimize such
risk to the Company.
6. Consider and review with the independent auditor:
(a) The adequacy of the Company's internal controls including computerized
information system controls and security; and
(b) Related findings and recommendations of the independent auditor together
with management's responses.
7. Consider and review with management and the independent auditor:
(a) Significant findings during the year, including the status of previous
audit recommendations;
(b) Any difficulties encountered in the course of audit work including any
restrictions on the scope of activities or access to required information;
8. Periodically assess the performance of the Audit Committee by consulting
with independent auditors, internal auditors and Company counsel on how
Audit Committee best practices relate to current Audit Committee practices,
and institute appropriate change;
9. Set guidelines for Audit Committee education and orientation to assure
understanding of the business and the environment in which the Company
operates and to report periodically to the Board of Directors as a result
of the foregoing.
III. CONTINUOUS ACTIVITIES -SPECIFIC POLICIES
1. Advise financial management and the independent auditor that they are
expected to provide a timely analysis of significant current financial
reporting issues and practices including the following:
(a) Selection of new or changes to accounting policies;
(b) Estimates, judgments, and uncertainties;
(c) Unusual transactions;
(d) Accounting policies relating to significant financial statement items,
including the timing of transactions and the period in which they were
recorded.
2. Ensure that financial management and the independent auditor discuss with
the Audit Committee their qualitative judgments about the appropriateness
of accounting principles and financial disclosure practices used or
proposed to be adopted by management, including compliance with applicable
SEC staff accounting bulletins.
3. Inquire as to the independent auditor's independent qualitative judgments
about the appropriateness of the accounting principles, the consistency of
the Company's accounting policies, and the clarity and completeness of the
Company's financial statements and related disclosure practices used or
proposed to be adopted by management in connection with the independent
auditor's review of interim and audit of annual financial statements prior
to filing its appropriate SEC Forms. Involve, as appropriate, members of
management including the President, CFO and legal counsel in the quarterly
discussions.
4. Determine, with regard to new transactions or events, the independent
auditor's reasoning for the appropriateness of the accounting principles
and disclosure practices adopted by management.
V. SCHEDULED ACTIVITIES
1. Recommend the selection of the independent auditor for approval by the
Board of Directors, approve the compensation of the independent auditor and
review and approve any discharge of the independent auditor.
2. Consider, in consultation with the independent auditor, the audit scope and
plan of the independent auditor.
3. Review with management and the independent auditor the results of annual
audits and related comments in consultation with other committees as deemed
appropriate including:
(a) The Company's audited annual financial statements and related footnotes;
(b) The independent auditor's audit of, and report on the financial statements;
(c) Any significant changes required in the independent auditor's audit plans;
(d) Any difficulties or disputes with management encountered during the course
of the audit; and
(e) Other matters related to the conduct of the audit which are to be
communicated to the Audit Committee under Generally Accepted Auditing
Standards.
4. Review annual filings with the SEC and other published documents containing
the Company's financial statements and consider whether to recommend to the
Board of Directors that the audited financial statements be included in the
Company's Annual Report on Form 20-F filing with the SEC.
5. Review the interim financial reports with management and the independent
auditor before those interim reports are released to the public or filed
with the SEC or other regulators.
6. Arrange for the independent auditor to be available to the full Board of
Directors at least annually to help provide a basis for the Board of
Directors to recommend the appointment of the independent auditor.
7. Set guidelines for review of stock exchange certifications and SEC
disclosure requirements related to the Audit Committee.
8. Review and update the Audit Committee Charter annually.
IX. "WHEN NECESSARY" ACTIVITIES
1. Review periodically with general counsel, legal and regulatory matters that
may have a material impact on the Company's financial statements,
compliance policies and programs.
2. Conduct or authorize investigations into any matters within the Audit
Committee's scope of responsibilities. The Audit Committee shall be
empowered to retain independent counsel and other professionals to assist
in the conduct of any investigation or in discharging its responsibilities.
3. Perform any other activities consistent with this Charter, the Company's
Certificate of Incorporation or Bylaws, and governing law, as the Audit
Committee or the Board of Directors deems necessary or appropriate.
