It is the policy of MI Developments Inc. ("MID") that all of its officers and employees, including part-time and temporary employees, should report to MID management their concerns about accounting and auditing matters that affect MID. In addition, MID encourages outside third parties to report material and relevant accounting or auditing complaints to the proper persons within MID. This memorandum establishes procedures for such reporting. The audit committee of the Board of Directors of MID (the "Audit Committee") has adopted these procedures in compliance with Canadian and United States securities law requirements relating to:
(i) the receipt, retention and treatment of complaints received by MID regarding accounting, internal accounting controls or auditing matters ("Accounting and Auditing Concerns"); and
(ii) the confidential, anonymous submission by employees of MID of concerns regarding questionable accounting or auditing matters ("Questionable Conduct" and, together with Accounting and Auditing Concerns, "Activities of Concern"). Activities of Concern include, without limitation, the misstatement of financial results, the employment of fraudulent accounting policies, the exercise of improper influence over the external auditors and the failure to disclose material events, liabilities or contingencies.
Note that these procedures should also be used to report violations of MID's Code of Conduct and Ethics.
These procedures promote MID's goal of creating an environment in which officers and employees openly communicate with management regarding Activities of Concern and where outside parties are able to contact the management of MID in order to alert them to potential areas of concern.
No officer or employee of MID will be disciplined, reprimanded, dismissed or otherwise penalized by MID or any officer or employee of MID for taking action consistent with these procedures.
Reporting Activities of Concern
Reporting to the Executive Vice-President and Chief Financial Officer and the Chief Operating Officer
MID encourages all officers, employees and outside parties to report Activities of Concern to the Executive Vice-President and Chief Financial Officer (the "CFO"). In the event that the officer, employee or outside party does not feel comfortable reporting an Activity of Concern to the CFO, that person should report to the Chief Operating Officer (the "COO"). Reports of Activities of Concern may be submitted in person or by telephone (including by collect call), email, facsimile or standard mail.
All reports can be submitted anonymously if so desired and no attempts will be made by MID to identify the sender.
Correspondence should be sent to:
MI Developments Inc.
455 Magna Drive, 2nd Floor
Aurora, Ontario L4G 7A9
T: 905-713-6322
F: 905-713-6332
Don Cameron
Chief Operating Officer
or
MI Developments Inc.
455 Magna Drive, 2nd Floor
Aurora, Ontario L4G 7A9
T: 905-713-6322
F: 905-713-6332
Rocco Liscio
Executive Vice-President and Chief Financial Officer
E: cfo_report@midevelopments.com
Reporting to the Audit Committee
In addition to, or in lieu of, reporting to the General Counsel or CFO, a report of an Activity of Concern may be made directly to the Chair of the Audit Committee by telephone (including by collect call), facsimile or standard mail.
All such reports can be submitted anonymously if so desired and no attempts will be made by MID to identify the sender.
Correspondence should be sent to:
MI Developments Inc.
455 Magna Drive, 2nd Floor
Aurora, Ontario L4G 7A9
T: 905-713-6322
F: 905-713-6332
Attention: Mr. Franz Deutsch, Chair of Audit Committee
Treatment and Handling of Reports of Activities of Concern
Any person to whom an Activity of Concern is reported, if other than the General Counsel, or who becomes aware of an Activity of Concern, must, as soon as practicable and in any event within five business days, contact the General Counsel to provide details of the Activity of Concern. The General Counsel will promptly
(a) advise the Chair of the Audit Committee that a report has been received,
(b) review the report and
(c) if the situation so requires, investigate such reported Activity of Concern. All reports and investigations will be kept confidential to the extent possible, consistent with the need to conduct an adequate investigation. The General Counsel will retain records relating to each reported Activity of Concern, the actions taken to investigate (if any), and any response to such reported Activity of Concern in accordance with MID's document retention policy. In determining the extent of investigation, if any, that is necessary, the General Counsel shall consider all relevant facts and circumstances, including the alleged wrongdoer, the gravity of the alleged wrongdoing and the likelihood of a material effect on MID's financial statements, business operations and reputation.
Each quarter, the General Counsel will provide to the Audit Committee a summary of the reports of Activities of Concern he received during the prior quarter and the results of the investigations (if any) he made. If at any time the General Counsel wishes to seek the immediate counsel of the entire Audit Committee with respect to a reported Activity of Concern, he may request that the Chair of the Audit Committee arrange for a meeting with the full Audit Committee to discuss the report.
If, upon receiving a report of an Activity of Concern, the CFO or the Chair of the Audit Committee believes that it would be inappropriate in the circumstances to refer the matter to the General Counsel, then the CFO or the Chair of the Audit Committee will complete the necessary review, investigation (if any), record keeping and reporting in lieu of the General Counsel.
The Audit Committee will review and take any action it deems appropriate in its judgment with respect to any reported Activity of Concern it is made aware of, including retaining independent expert advisors and meeting with officers/employees of MID. Any review and evaluation of a reported Activity of Concern will include consideration of whether the matter(s) described in the report are improper and whether further review and/or investigation are warranted. Any decision by the Audit Committee, General Counsel, CFO or Chair of the Audit Committee to review or investigate any matter brought to its/his attention as a result of these procedures will not in any way be, or be deemed to be, a determination by that party or MID that any actions or inactions that are the subject of the report of the Activity of Concern have in fact occurred or are improper.
Available Assistance
It is essential that all officers, employees and outside parties understand these procedures. All interested parties are encouraged to raise any questions about these procedures with the General Counsel.
Exceptions to Procedures
The Audit Committee is responsible for approving exceptions to these procedures.
