28 Caribbean Utilities Company, Ltd.  2011  Annual Report Management’s Discussion and Analysis Management’s Responsibility for Financial Reporting The accompanying Financial Statements of Caribbean Utilities Company, Ltd. and all information in the 2011 Annual Report  have been prepared by management, who are responsible for the integrity of the information presented, including the  amounts that must of necessity be based on estimates and informed judgements. These Financial Statements were prepared in  accordance with accounting principles generally accepted in Canada. Financial information contained elsewhere in the 2011  Annual Report is consistent with that in the Financial Statements. In meeting its responsibility for the reliability and integrity of the Financial Statements, management has developed and  maintains a system of accounting and reporting which provides for the necessary internal controls to ensure transactions are  properly authorised and recorded, assets are safeguarded and liabilities are recognised. The Company focuses on the need  for training of qualified and professional staff, effective communication between management and staff and management  guidelines and policies. The Board of Directors oversees management’s responsibilities for financial reporting through an Audit Committee that is  composed entirely of outside directors. The Audit Committee meets with the external auditors, with and without management  present, to discuss the results of the audit, the adequacy of the internal accounting controls and the quality and integrity  of financial reporting. The Audit Committee reviews the Company’s annual Financial Statements before the statements are  recommended to the Board of Directors for approval. The external auditors have full and free access to the Audit Committee. The Audit Committee has the duty to review the adoption of, and changes in, accounting principles and practices which have a  material effect on the Financial Statements, to review financial reports requiring Board approval prior to submission to securities  commissions or other regulatory authorities, to assess and review management’s judgments material to reported financial  information and to review the external auditors’ fees. The Financial Statements and Management’s Discussion and Analysis contained in the 2011 Annual Report were reviewed by  the Audit Committee and, on their recommendation, were approved by the Board of Directors of the Company. Ernst & Young,  independent auditors appointed by the shareholders of the Company upon recommendation of the Audit Committee, have  performed an audit of the Financial Statements and their report follows. J.F. Richard Hew  President & Chief Executive Officer Letitia T. Lawrence Vice President Finance & Chief Financial Officer Caribbean Utilities Company, Ltd. Caribbean Utilities Company, Ltd.