Attached files
| file | filename |
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| EX-3.1 - Xinde Technology Co | v197162_ex3-1.htm |
| EX-99.3 - Xinde Technology Co | v197162_ex99-3.htm |
| EX-14.1 - Xinde Technology Co | v197162_ex14-1.htm |
| EX-99.2 - Xinde Technology Co | v197162_ex99-2.htm |
| EX-99.5 - Xinde Technology Co | v197162_ex99-5.htm |
| EX-99.4 - Xinde Technology Co | v197162_ex99-4.htm |
| 8-K - Xinde Technology Co | v197162_8k.htm |
CHARTER
OF THE AUDIT COMMITTEE
OF
XINDE
TECHNOLOGY COMPANY
(Adopted
as of September 16, 2010)
AUTHORITY
AND PURPOSE
The Audit
Committee (the “Committee”) of Xinde
Technology Company, a Nevada corporation (the “Company”) is
appointed by the Company’s Board of Directors (the “Board”) to (i) assist
Board oversight of (1) the integrity of the Company’s financial statements; (2)
the Company’s compliance with regulatory requirements; (3) the Company’s
independent auditor’s qualifications and independence; and (4) the performance
of the Company’s internal audit function and independent auditors; and (ii) to
prepare the disclosure required by Item 407(d)(3)(i) of Regulation
S-K. The Committee shall undertake those specific duties and
responsibilities listed below and such other duties as the Board shall from time
to time prescribe.
POWERS
The
Committee shall have the power to conduct or authorize investigations into any
matters within the Committee’s scope of responsibilities. The
Committee shall be empowered, without the approval of the Board or management,
to engage and compensate independent legal, accounting and other advisors, as it
determines necessary to carry out its duties.
The
Company shall receive appropriate funding, as determined by the Committee, from
the Company for payment of: (i) compensation to any registered public
accounting firm engaged for the purpose of preparing or issuing an audit report
or performing other audit, review or attest services for the Company; (ii)
compensation to any independent advisers retained by the Committee in carrying
out its duties; and (iii) ordinary administrative expenses of the Committee that
are necessary or appropriate in carrying out its duties.
While the
Committee has the responsibilities and powers set forth in this Charter, it is
not the duty of the Committee to plan or conduct audits or to determine that the
Company’s financial statements are complete and accurate and are in accordance
with generally accepted accounting principles. Those tasks are the
responsibility of management and the independent auditor.
The
Committee may form and delegate authority to subcommittees when
appropriate.
All
powers of the Committee are subject to the restrictions designated in the
Company’s Articles of Incorporation, as amended from time to time (the “Articles of
Incorporation”), and by applicable law.
COMMITTEE
MEMBERSHIP
The
Committee members (“Members”) shall be
appointed by the Board and shall serve at the discretion of the
Board. The Committee shall consist of a minimum of three (3)
directors or such number of directors, greater than three (3) as shall be
determined by the Board.
Each
Member shall be an independent director. For purposes hereof, an
“independent director” shall be one:
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1.
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who
accepts no consulting, advisory or other compensatory fee from the Company
other than in his or her capacity as a Member of the Committee, the Board
or any other committee of the Board or is not otherwise an affiliated
person of the Company,
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2.
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who
is free from any relationship that, in the opinion of the Board, would
interfere with the exercise of his or her independent judgment in carrying
out the responsibilities of a
director,
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3.
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who
otherwise satisfies the then current laws applicable to Members and the
listing rules of any securities exchange or securities quotation system on
which any of the Company’s securities are listed, including, without
limitation, the criteria for independence set forth in Rule 10A-3(b)(1)
promulgated under the U.S. Securities and Exchange Act of 1934, as amended
(the “Exchange
Act”), subject to the exemptions provided in Rule 10A-3(c) under
the Exchange Act, applicable rules and regulations (the “Regulations”)
of the U.S. Securities and Exchange Commission, and the applicable rules
of the NASDAQ Stock Market, particularly Rule 5605(a)(2) (subject to the
exception provided in Rule 5605(c)(2)(B) and the cure period provided in
Rule 5605(c)(4)), and
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4.
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who
has not participated in the preparation of the financial statements of the
Company or any current subsidiary of the Company at any time during the
past three (3) years.
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The Board
shall use its best efforts to ensure that at least one Member shall be a
“financial expert,” as defined by Section 407 of the Sarbanes-Oxley Act of 2002,
having an understanding of generally accepted accounting principles and
financial statements, experience in the preparation or auditing of financial
statements of companies generally comparable to the Company, experience in the
application of generally accepted accounting principles in connection with the
accounting for estimates, accruals and reserves, experience with internal
controls over financial reporting and an understanding of audit committee
functions.
Each
Member shall be able to read and understand fundamental financial statements,
including a company’s balance sheet, income statement, and cash flow statement,
as required by NASDAQ Stock Market Rule 5605(c)(2).
At least
one Member shall have past employment experience in finance or accounting,
requisite professional certification in accounting or any other comparable
experience or background that results in the individual’s possessing the
requisite financial sophistication, including a current or past position as a
chief executive or financial officer or other senior officer with financial
oversight responsibilities.
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No Member
shall simultaneously serve on the audit committee of more than three (3) other
public companies.
DUTIES
AND RESPONSIBILITIES
The
Committee shall oversee the accounting and financial reporting processes,
internal controls over financial reporting and audits of the financial
statements of the Company. In so doing, the Committee shall endeavor
to maintain free and open means of communication among the directors, the
independent auditors and the financial management of the Company. In
addition, the Committee shall review the policies and procedures adopted by the
Company to fulfill its responsibilities regarding the fair and accurate
presentation of financial statements in accordance with generally accepted
accounting principles and applicable rules and regulations of the U.S.
Securities and Exchange Commission and the rules of the NASDAQ Stock
Market.
The
Committee’s policies and procedures shall remain flexible, in order to best
react to changing conditions and to ensure to the Board and the Company’s
shareholders that the corporate accounting and reporting practices of the
Company are in accordance with all requirements and are of the highest
quality.
In
meeting its responsibilities, the Committee is expected to, among other
things:
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1.
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With
respect to the Company’s independent
auditors:
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a.
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Appoint
the Company’s independent auditors, determine its compensation and oversee
its work (including resolution of any disagreements between management and
the independent auditor regarding financial reporting). The
Committee shall pre-approve all auditing services (including the provision
of comfort letters) and non-audit services provided by the independent
auditors to the Company and consider whether such services are permissible
under applicable law. The Committee may delegate to one or more
designated Members the authority to grant preapprovals required by the
foregoing sentence. The decisions of any Member to whom
authority is delegated hereunder shall be presented to the Committee at
each of its scheduled meetings. The independent auditors shall
be ultimately accountable to the Board and to the Committee as
representatives of the Company’s
shareholders.
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b.
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Review
the independence of the independent auditors, including a review of
management consulting services provided by the independent auditors and
related fees. The Committee shall require the independent
auditors at least annually to provide a formal written statement
delineating all relationships between the independent auditors and the
Company consistent with the rules of the NASDAQ Stock Market and request
information from the independent auditors and management to determine the
presence or absence of a conflict of interest. The Committee
shall actively engage the auditors in a dialogue with respect to any
disclosed relationships or services that may impact the objectivity and
independence of the auditors. The Committee shall take, or
recommend that the full Board take, appropriate action to oversee the
independence of the auditors. The Committee shall also set of
clear hiring policies for employees or former employees of the independent
auditors.
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2.
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Review
with management: (i) the scope and responsibilities of an
internal audit department, (ii) the appointment, replacement, reassignment
or dismissal of an internal audit department manager or director, (iii)
the qualifications and experience of any staff of the internal audit
department at or above the level of manager, (iv) the internal audit
function for performance, sufficiency and effectiveness, (v) the annual
budget and work plan for the internal audit department, (vi) the persons
within the Company’s senior management and the Committee to whom the
internal audit department manager or director shall directly report, (vii)
the nature and frequency of reports from the internal audit department
manager or director to the Company’s senior management and the Committee
and (viii) the internal audit department’s interaction with the
independent auditors in developing and implementing the audit
plan. The Committee shall work with management to reach a
consensus on the foregoing.
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3.
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Review
and discuss with management, before release: (i) the audited
financial statements and the Management’s Discussion and Analysis proposed
to be included in the Company’s Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q and (ii) if deemed appropriate by the Committee, any
other publicly disclosed financial information of the Company, as well as
financial information and earnings guidance provided to analysts and
rating agencies. The Committee shall also make a recommendation
to the Board whether or not the audited financial statements shall be
included in the Company’s Annual Report on Form 10-K. The
Committee shall also discuss policies with respect to the Company’s risk
assessment and risk management.
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4.
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In
consultation with management, cooperate with, and to the extent deemed
appropriate by the Members, oversee, the members of any internal
disclosure control task force or other group within the Company which is
charged with gathering information for the Company’s public reports and
filings, considering the materiality of such information and determining
disclosure obligations, and consider and respond to any issues and
deficiencies relating to the Company’s disclosure controls and procedures
which are identified by management or such internal
group.
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5.
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The
Committee shall discuss with management, the internal auditors and the
independent auditors management’s process for assessing the effectiveness
of internal control over financial reporting under Section 404 of the
Sarbanes-Oxley Act of 2002, including any significant deficiencies or
material weaknesses identified.
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6.
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Review
and discuss with management the Company’s disclosure in its filings with
the U.S. Securities and Exchange Commission prepared pursuant Section 302
of the Sarbanes-Oxley Act of 2002.
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7.
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In
consultation with the independent auditors, the internal audit department,
if any, and management, consider and review at the completion of the
annual examinations and such other times as the Committee may deem
appropriate:
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a.
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The
Company’s annual financial statements and related
notes.
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b.
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The
independent auditors’ audit of the financial statements and their report
thereon, including the scope of the audit of the Company’s internal
controls over financial reporting and financial
statements.
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c.
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The
independent auditors’ reports regarding critical accounting policies,
alternative treatments of financial information and other material written
communications between the independent auditors and
management.
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d.
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Any
deficiency in, or suggested improvement to, the procedures or practices
employed by the Company as reported by the independent auditors in their
annual management letter.
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8.
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Periodically
and to the extent appropriate under the circumstances, it may be advisable
for the Committee, with the assistance of the independent auditors, the
internal audit department, if any, and/or management, to consider and
review the following:
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a.
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Any
significant changes required in the independent auditors’ audit plan or
auditing and accounting principles.
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b.
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Any
difficulties or disputes with management encountered during the course of
the audit.
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c.
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The
adequacy of the Company’s system of internal controls over financial
reporting.
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d.
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The
effect or potential effect of any regulatory regime, accounting
initiatives or off-balance sheet structures on the Company’s financial
statements.
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e.
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Any
correspondence with regulators or governmental agencies and any employee
complaints or published reports that raise material issues regarding the
Company’s financial statements or accounting
policies.
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f.
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Other
matters related to the conduct of the audit, which are to be communicated
to the Committee under generally accepted auditing
standards.
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9.
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Discuss
with the independent auditors the matters required to be discussed by
Statement on Auditing Standards No. 61, as modified or
supplemented.
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10.
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Obtain
from the independent auditor assurance that it has complied with
Section 10A of the Exchange
Act.
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11.
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Ensure
that the Company has implemented adequate procedures for (a) the receipt,
retention and treatment of complaints received by the Company regarding
accounting, internal accounting controls over financial reporting or
auditing matters, or potential violations of law, and (b) the
confidential, anonymous submission by the Company’s employees of concerns
regarding questionable accounting or auditing matters or potential
violations of law. Such procedures are set forth in the
Company’s Code of
Business Conduct and Ethics. The Committee shall observe
such procedures and any other related procedures which the Committee may
establish from time to time.
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12.
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Cooperate
with the Company in preparing any reports of the Committee it intends to
include in a proxy statement and any other reports required by applicable
securities laws and Regulations.
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13.
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Review,
with the Company’s counsel, any legal matter that could have a significant
impact on the Company’s financial
statements.
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14.
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Report
regularly to the Board, including reporting to the Board following
meetings of the Committee.
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15.
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Maintain
minutes or other records of meetings and activities of the
Committee.
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Review
the rationale for employing audit firms other than the principal
independent auditors; and, where an additional audit firm has been
employed, review the coordination of audit efforts to assure completeness
of coverage, reduction of redundant efforts and the effective use of audit
resources.
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17.
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Meet
quarterly with or interview, in separate sessions, the Chief Financial
Officer, the senior internal auditing executive and the independent audit
firm engagement partner.
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Additional
Duties & Responsibilities
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Unless
the Board shall designate another committee to handle such matters, on at
least a quarterly basis, the Chief Executive Officer or Chief Financial
Officer of the Company shall report to the Committee any reports or
complaints they have received regarding: (i) actual or
potential violations of the Code of
Business Conduct and Ethics, (ii) matters related to accounting,
internal controls over financial reporting or audits, (iii) corporate
fraud, (iv) violations of law (even if deemed to be immaterial), (v) any
compliance issues regarding the Code of
Business Conduct and Ethics and (vi) confidential, anonymous
submissions by employees of the Company regarding questionable accounting
or auditing matters. The Committee shall evaluate each such
matter in consultation with management and determine appropriate actions,
if any, to take, in accordance with the Code of
Business Conduct and Ethics.
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19.
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The
Committee shall review and discuss accounting pronouncements, initiatives
and proposed rule changes relevant to the
Company.
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20.
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The
Committee shall review on an annual basis any policies adopted by the
Committee, including its policy, if any, regarding the pre-approval of
audit and non-audit services.
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21.
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Review
and approve all transactions with related persons in accordance with the
Company’s Related
Person Transaction Policy, unless a Member is involved in the
related party transaction in which case the transaction shall be reviewed
by the disinterested independent directors as provided in such
procedures.
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22.
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Meet
quarterly with management to review the adequacy and effectiveness of the
Code
of Business Conduct and
Ethics.
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PERFORMANCE
EVALUATION
The
Committee shall annually review and assess the adequacy of this Charter and
recommend any proposed changes to the Board for approval. The
Committee shall also perform an annual evaluation of its own performance, which
shall compare the performance of the Committee with the requirements of this
Charter. Such performance evaluation shall be conducted in such
manner as the Committee deems appropriate. The report to the Board
may take the form of an oral report by the Chairman of the Committee (the “Committee Chair”) or
any other Member of the Committee designated by the Committee to make this
report.
STRUCTURE
AND MEETINGS
The
Committee shall conduct its business and meetings in accordance with this
Charter, the Company’s Bylaws, the Articles of Incorporation and any direction
set forth by the Board. The Committee Chair shall be designated by
the Board or, in the absence of such a designation, by a majority of the
Members. The designated Committee Chair shall preside at each meeting
of the Committee and, in consultation with the other Members, shall set the
frequency and length of each meeting and the agenda of items to be addressed at
each meeting. In the absence of the designated Committee Chair at any
meeting of the Committee, the Members present at such meeting shall designate a
Committee Chair pro tem
to serve in that capacity for the purposes of such meeting (not to include any
adjournment thereof) by majority vote. The Committee Chair (other
than a Committee Chair designated pro tem) shall ensure that
the agenda for each meeting is distributed to each Member in advance of the
applicable meeting.
The
Committee shall meet at least four (4) times each year, at a time and place
determined by the Committee Chair, with further meetings to occur, or actions to
be taken by unanimous written consent, when deemed necessary or desirable by the
Committee or the Committee Chair. The Committee may establish its own
schedule, provided that it shall provide such schedule to the Board in
advance. Special meetings of the Committee may be called by or at the
request of any Member of the Committee, any of the Company’s executive officers,
the head of the Company’s internal audit department, or the independent auditor,
in each case on at least twenty-four hours notice to each Member unless such
notice period is waived by the Members of the Committee.
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A
majority of the appointed Members, but not less than two (2) Members, shall
constitute a quorum for the transaction of business. Members may
participate in a meeting through use of conference telephone or similar
communications equipment, so long as all Members participating in such meeting
can hear one another, and such participation shall constitute presence in person
at such meeting.
Appropriate
officers and internal audit and financial personnel of the Company may attend
any meeting of the Committee, except for portions of such meetings where the
presence of such officers or personnel would be inappropriate, as determined by
the Committee. The Committee may request any officer or employee of
the Company or the Company’s outside counsel, internal audit provider or
independent auditor to attend a meeting of the Committee or to meet with any
Members of, or consultants to, the Committee. The Committee may hold
separate executive sessions with management, the independent auditor and/or the
Company’s internal audit provider, as appropriate.
Unless
the Committee by resolution determines otherwise, any action required or
permitted to be taken by the Committee may be taken without a meeting if all
Members consent thereto in writing and the writing or writings are filed with
the minutes of the proceedings of the Committee.
MINUTES
The
Committee shall maintain written minutes of its meetings, which minutes shall be
filed with the minutes of the meetings of the Board.
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