The mandate of the Governance and Nominating Committee requires the committee, among other things, to:

The members of the Governance and Nominating Committee, who are all independent and unrelated, are JOHN S. MCCALLUM (Chair), GEOFFREY F. HYLAND, HARRY MCWATTERS, RONALD D. MUNKLEY and ROY P. RIDEOUT.
 

The mandate of the Human Resources Committee requires the committee, among other things, to:

The members of the Human Resources Committee, who are all independent and unrelated, are ROY P. RIDEOUT (Chair), IDA GOODREAU, GEOFFREY F. HYLAND, DAVID G. NORRIS and MICHAEL A. PAVEY.
 

The Audit Committee shall provide assistance to the Board by overseeing the external audit of the Corporation’s annual financial statements and the accounting and financial reporting and disclosure processes and policies of the Corporation.

In this mandate:

“AIF” means the Annual Information Form filed by the Corporation;

“Committee” means the Audit Committee appointed by the Board pursuant to this mandate;

“Board” means the board of directors of the Corporation;

“CICA” means the Canadian Institute of Chartered Accountants or any successor body;

“Corporation” means Fortis Inc.;

“Director” means a member of the Board;

“Financially Literate” means having the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breath and complexity of the issues that can reasonably be expected to be present in the Corporation’s financial statements;

“External Auditor” means the firm of chartered accountants, registered with the Canadian Public Accountability Board or its successor, and appointed by the shareholders of the Corporation to act as External Auditor of the Corporation;

“Independent” means free from any direct or indirect material relationship with the Corporation which, in the view of the Board, could reasonably be expected to interfere with the exercise of a Member’s independent judgment as more particularly described in Multilateral Instrument 52-110;

“Internal Auditor” means the person employed or engaged by the Corporation to perform the internal audit function of the Corporation;

“Management” means the senior officers of the Corporation;

“MD&A” means the Corporation’s management discussion and analysis prepared in accordance with National Instrument 51-102F1 in respect of the Corporation’s annual and interim financial statements; and

“Member” means a Director appointed to the Committee.

Oversight of the External Audit and the Accounting and Financial Reporting and Disclosure Processes and Policies

The primary purpose of the Committee is oversight of the Corporation’s external audit and the accounting and financial reporting and disclosure processes and policies on behalf of the Board. Management of the Corporation is responsible for maintaining appropriate accounting and financial reporting principles, policies, internal controls and procedures that provide for compliance with accounting standards and applicable laws and regulations. Management is responsible for the preparation and integrity of the financial statements of the Corporation.

1. Oversight of the External Audit

The oversight of the external audit pertains to the audit of the Corporation’s annual financial statements.

	1.1.	The Committee is responsible for the evaluation and recommendation of the External Auditor to be proposed by the Board for appointment by the shareholders.
	1.2.	In advance of each audit, the Committee shall review the External Auditor’s audit plan including the general approach, scope and areas subject to risk of material misstatement.
	1.3.	The Committee is responsible for approving the terms of engagement and fees of the External Auditor.
	1.4.	The Committee shall review and discuss the Corporation’s annual audited financial statements, together with the External Auditor’s report thereon, and MD&A with Management and the External Auditor to gain reasonable assurance as to the accuracy, consistency and completeness thereof. The Committee shall meet privately with the External Auditor. The Committee shall oversee the work of the External Auditor and resolve any disagreements between Management and the External Auditor.
	1.5.	The Committee shall use reasonable efforts, including discussion with the External Auditor, to satisfy itself as to the External Auditor’s independence as defined in the CICA Assurance Handbook Section 5751.

2. Oversight of the Accounting and Financial Reporting and Disclosure Processes

	2.1.	The Committee shall recommend the annual audited financial statements together with the MD&A for approval by the Board.
	2.2.	The Committee shall review the interim unaudited financial statements with the External Auditor and Management, together with the External Auditor’s review engagement report thereon.
	2.3.	The Committee shall review and approve publication of the interim unaudited financial statements, together with the interim MD&A and earnings media release on behalf of the Board.
	2.4.	The Committee shall review and recommend approval by the Board of the Corporation’s AIF, Management Information Circular, any prospectus and other financial information or disclosure documents to be issued by the Corporation prior to their public release.
	2.5.	The Committee shall use reasonable efforts to satisfy itself as to the integrity of the Corporation’s financial information systems, internal control over financial reporting and the competence of the Corporation’s accounting personnel and senior financial management responsible for accounting and financial reporting.
	2.6.	The Committee shall be responsible for the oversight of the Internal Auditor.

3. Oversight of the Audit Committee Mandate and Policies

On a periodic basis, the Committee shall review and report to the Board on the Audit Committee Mandate as well as on the following policies:

	3.1.	Reporting Allegations of Suspected Improper Conduct and Wrongdoing Policy;
	3.2.	Derivative Financial Instruments and Hedging Policy;
	3.3.	Pre-Approval of Audit and Non-Audit Services Policy;
	3.4.	Hiring of Employees from Independent Auditing Firms Policy;
	3.5.	The Internal Audit Role and Function Policy; and
	3.6.	any other policies that may be established, from time to time, relating to accounting and financial reporting and disclosure processes; oversight of the external audit of the Corporation’s financial statement; and oversight of the internal audit function.

The Chair of the Committee, or another designated Member, shall report to the Board at each regular meeting on those matters which were dealt with by the Committee since the last regular meeting of the Board.

Other

1. The Committee shall perform such other functions as may, from time to time, be assigned to the Committee by the Board.
    

2. The Committee may approve, in circumstances that it considers appropriate, the engagement by the Committee or any Director of outside advisors or persons having special expertise at the expense of the Corporation.
    

Pre-Approval Policies and Procedures

The Audit Committee has established a policy which requires pre-approval of all audit and non-audit services provided to the Corporation and its subsidiaries by the Corporation’s External Auditor. The Pre-Approval of Audit and Non-Audit Services Policy describes the services which may be contracted from the External Auditor and the limitations and authorization procedures related thereto. This policy defines services such as bookkeeping, valuations, internal audit and management functions which may not be contracted from the External Auditor and establishes an annual limit for permissible non-audit services not greater than the total fee for audit services. Audit Committee pre-approval is required for all audit and non-audit services.
 

Education and Experience

The education and experience of each Audit Committee Member that is relevant to such Member’s responsibilities as a Member of the Audit Committee are set out below. As at December 31, 2009, the Audit Committee was composed of the following persons.