Corporate Governance

AUDIT FUNCTION

Guardian Holdings Limited has a standing Audit Committee comprised of independent members as follows:

- SelbyWilson (Chairman)
- Peter July
- Aleem Mohammed

The Committee is governed by a charter which sets out its responsibilities for the financial statements,

internal controls, internal audit function, external audit and compliance matters.

During the 2004 fiscal year, the Committee held four meetings, which enabled it to discharge its responsibilities.

The Committee is satisfied that the Group Internal Auditor and the Internal Audit staff perform their duties in an objective

and transparent manner. Further, Committee has no reason to believe that the performance of the functions in any way subject to management‘s undue influence.

The chief audit executive (the Group Internal line) reports functionally (direct line) to the GHL Audit Committee, with an administrative (dotted line) reporting

relationship to the Group Chief Executive Officer. The Group Internal Auditor has complete and direct functional and administrative for the Group‘s

internal audit staff.

To preserve the independence of the internal audit function, dotted administrative lines to the subsidiaries‘ Chief Executive Officers (CEOs)

will be restricted to operations in the overseas territories of Jamaica and the Netherlands Antilles and Aruba. The Group Internal Auditor

and the respective overseas subsidiary CEOs will manage any administrative issues in these overseas territories.

During 2004, the interim financial statements were presented to the Committee at its quarterly meetings. The Committee is

satisfied that the audited financial statements are complete, consistent with information known to its members and reflective

of appropriate accounting principles. The Committee discussed the audited financial statements with management, and certain

matters relating to internal controls with the external auditors. The Committee reviewed and approved release for publication

in the local press and filing with the regulators, as the results were considered to be complete and consistent with information

known to the Committee.

The internal audit function is a key element in assessing the adequacy and effectiveness of the Group‘s internal control

systems. During the year under review, any significant weaknesses in internal controls noted by internal auditors

and management‘s risk corrective actions were presented to the Committee in each meeting. The Committee members are satisfied

that the risk corrective actions identified by management for implementation will address any weaknesses in internal controls

that were highlighted in the internal audit reports presented to them.

The Audit Committee is confident that the internal audit department is effectively carrying out its responsibilities as set
 
out in the internal audit charter.

The Audit Committee has reviewed and approved the proposed audit scope and approach of the external auditors

(PricewaterhouseCoopers) for the 2004 financial year. The members are satisfied that PricewaterhouseCoopers planned

the audit to obtain reasonable assurance that the financial statements are free of material misstatement and present

a fair view of the financial position of the Group as at December 31st, 2004 and the results of its operations and its cash

flows for the year then ended in accordance with International Financial Reporting Standards.

COMPLIANCE

During the year under review, GHL continued its review of our institutional and policy framework in order to ensure that

the corporate governance structure promotes transparency, is consistent with the rule of law and clearly articulates the

rights and responsibilities of the different stakeholders in the corporation.

In addition to a strong audit environment exemplified by the roles of the internal and external auditors, the Board of GHL

strengthened its risk management framework by adopting Group Policies on Anti-Money Laundering and Compliance on March 15th,
 
2004 and August 4th, 2004, respectively. In accordance with the Group Compliance Policy, a Group Compliance Unit was

established and a Corporate Compliance Plan 2005 adopted. The Unit reports on a quarterly basis to the Audit Committee of the

GHL Board and its remit is to provide quality assurance to the Board that the GHL Group of Companies complies with all

applicable laws, regulations, internal policies, codes of conduct and standards of good practice in those jurisdictions in

which the Group‘s businesses operate.

GHL, ever cognisant of its role as an exemplary corporate citizen, is committed to the strengthening of its internal framework

and readies itself to embrace the challenges and increased scrutiny presented by both local and international changes in the
 
regulatory environment.