Attached files
Exhibit
14.1
Novume Solutions
Audit Committee Charter
Purpose and Authority
The
purpose of the Audit Committee is: (1) to assist the Board of
Directors in fulfilling its responsibilities for generally
overseeing: (a) the Corporation’s financial reporting
processes and the audit of the Corporation’s financial
statements, including the integrity of the Corporation’s
financial statements, (b) the Corporation’s compliance with
legal and regulatory requirements, (c) the independent registered
public accounting firm’s qualifications and independence, (d)
the performance of the Corporation’s internal audit function
and independent registered public accounting firm, and (e) risk
assessment and risk management; (2) to prepare any report of the
Audit Committee that may be required by the proxy rules of the U.S.
Securities and Exchange Commission (the “SEC”) to be
included in the Corporation’s annual proxy statement; (3) to
oversee the finance and investment functions of the Corporation;
and (4) to perform such other duties and responsibilities as are
enumerated in and consistent with this charter.
Membership
The
Audit Committee shall consist of at least three independent
Directors. To the extent necessary or deemed appropriate by the
Board of Directors, additional independent Directors may be
appointed to the Audit Committee by the Board of Directors. Members
of the Audit Committee shall be independent, as determined by the
Board in accordance with guidelines established by the Governance
Committee from time to time and as required by applicable laws and
regulations and the requirements of any exchange on which the
Corporation maintains a listing for any of its securities. Members
of the Audit Committee shall serve for
a term of one year or until their successor is
elected.
Each
director on the Audit Committee shall meet applicable financial
literacy requirements and listing standards for any exchange on
which the Corporation maintains a listing of its securities and
shall have such additional qualifications as the Board of Directors
determines. At least one director on the Audit Committee will be an
“audit committee financial expert,” as determined by
the Board of Directors in accordance with SEC rules. In addition,
no director on the Audit Committee may have participated in the
preparation of the financial statements of the Corporation’s
or any of the Corporation’s current subsidiaries at any time
during the past three years. A member of the Audit Committee shall
not simultaneously serve on the audit committee of more than two
other companies whose stock is publicly traded without a
determination by the Board of Directors that the member's
simultaneous service would not impair his or her ability to
effectively serve on the Audit Committee. The entire Audit
Committee or any individual director on the Audit Committee may be
removed with or without cause by the affirmative vote of a majority
of the Board of Directors upon the recommendation of the Corporate
Governance Committee.
The Chair of the Audit Committee shall be elected
by the Board of Directors of the Corporation after receiving the
recommendation of the Governance Committee. In the absence of such
designation, the Audit Committee may designate the Chair by
majority vote of the Audit Committee. The Chair may appoint
may designate a person to serve as Secretary of the Audit Committee
who is not required to be a member of the Audit Committee
and may designate another member of
the Audit Committee to serve as Chair at any meeting at which the
Chair is absent. From time to time the Chair may establish such
other rules as are necessary and proper for the conduct of the
business of the Audit Committee. The Chair shall approve each
meeting agenda. A report of the Audit Committee regarding each
meeting, with recommendations for action, when appropriate, shall
be presented orally or in writing at the next regularly scheduled
Board of Directors meeting following each Audit Committee
meeting.
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Procedures
1.
Meetings. The Audit Committee shall establish a schedule for
at least four regular meetings each year. Special meetings may be
called by the Chair of the Audit Committee in such manner as the
Chair shall determine to be appropriate to give the members of the
Audit Committee reasonable opportunity to participate in the
meeting. A majority of the members of the Audit Committee shall
constitute a quorum. A majority vote at a meeting at which a quorum
is present is sufficient for all actions taken by the Audit
Committee and any subcommittee thereof. The Audit Committee and any
such subcommittee may meet in person or telephonically as
frequently as required. However, if unanimous written consent of
the members is obtained, an in person or telephonic meeting shall
not be required in order for the Audit Committee or any such
subcommittee to take any action that the Audit Committee or such
subcommittee is authorized to take.
2.
Agenda. The Chair will establish the agenda, with input
from management and other directors on the Audit Committee and the
Board of Directors as appropriate.
3.
Executive and Private
Sessions. The Audit Committee
will meet regularly in separate executive sessions at which only
Audit Committee members are present and in private sessions with
each of: representatives of management, the internal auditors and
the independent registered public accounting
firm.
4. Delegation of
Authority.
a.
The Audit Committee may create a subcommittee of the Audit
Committee consisting of one or more directors on the Audit
Committee and may delegate any of its duties and responsibilities
to such subcommittee, unless otherwise prohibited by applicable
laws or listing standards.
b.
The Audit Committee may delegate any of its duties and
responsibilities to one or more directors on the Audit Committee,
or another independent director, unless otherwise prohibited by
applicable laws or listing standards.
c.
Any subcommittee, director or other person may provide a written or
oral report to the Audit Committee, as appropriate, regarding any
activities undertaken pursuant to such delegation.
d.
The Audit Committee may terminate any such subcommittee and revoke
any such delegation at any time.
5.
Authority to Retain Advisors
and Consultants. In the course
of its duties, the Audit Committee will have sole authority, at the
Corporation’s expense, to select, retain, terminate and
approve the fees and other retention terms of such independent
legal, financial or other advisors as they may deem necessary,
without consulting or obtaining approval of Corporation management
or the Board of Directors in advance.
6.
Charter Review.
The Audit Committee annually will
review and reassess the adequacy of this charter and will submit
any recommended changes to the charter to the Corporate Governance
Committee and the Board of Directors for
approval.
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7.
Performance Review.
The Audit Committee annually will
undertake an evaluation assessing its performance with respect to
its purposes and its duties and tasks set forth in this charter,
and will report the results of such evaluation to the Corporate
Governance Committee and the Board of
Directors.
8.
Reporting to the Board of
Directors. The Audit Committee
shall make prompt written or oral reports of its activities to the
Board of Directors, which shall include appropriate details of any
approvals which are or may be binding on the Corporation. In the
event of any dissenting votes, the report shall contain an
explanation of the reason for the dissenting
vote.
9.
Open Access.
The Audit Committee will be given open
access to the Corporation’s internal auditors, Board of
Directors Chairman, the Corporation’s executives and
independent registered public accounting firm, as well as the
Corporation’s books, records, facilities and other
personnel.
Authority
and Responsibilities
The following responsibilities of the Committee are set forth as a
guide to the Audit Committee with the understanding that the Audit
Committee may alter or supplement them as appropriate under the
circumstances to the extent permitted by applicable laws and
listing standards.
1.
Independent Registered Public
Accounting Firm. The Committee
will appoint, evaluate and establish the basis for compensation of
the independent registered public accounting firm, which will
report directly to the Committee, and oversee the rotation of the
independent registered public accounting firm’s lead audit
and concurring partners at least once every five years and the
rotation of other audit partners, with applicable time-out periods,
in accordance with SEC regulations. The Committee will determine
whether to retain or, if appropriate, terminate the independent
registered public accounting firm.
2.
Audit and Non-Audit Services
and Fees. The Committee will
review and approve in advance the scope of the fiscal year’s
independent audit and the audit fees, establish policies for the
independent registered public accounting firm’s activities
and any fees beyond the core audit, approve in advance all
non-audit services to be performed by the independent registered
public accounting firm that are not otherwise prohibited by law and
associated fees, and monitor the fees paid to the independent
registered public accounting firm. The Committee may delegate to
the Chairman the authority, within agreed limits, to pre-approve
audit-related and non-audit services not prohibited by law to be
performed by the independent registered public accounting firm. The
Chairman will report any decisions to pre-approve such services to
the full Committee.
3.
Relationships with Independent
Registered Public Accounting Firm. The Committee will review and, where appropriate,
discuss with the independent registered public accounting firm its
annual written statement delineating all relationships or services
between the independent registered public accounting firm and
Novume Solutions, or any other relationships or services that may
impact its objectivity and independence.
4.
Hiring
Polices. The Committee will set
policies for the hiring of employees or former employees of the
independent registered public accounting firm by the Corporation,
and monitor compliance with such policies.
5.
Annual Audited and Quarterly
Financial Statements; Other Matters. The Committee will:
a.
Review and discuss, as appropriate, with management and the
independent registered public accounting firm the
Corporation’s annual audited and quarterly financial
statements, including the Corporation’s disclosures in
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations;” and
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b.
Review with management and the independent registered public
accounting firm:
i.
the results of the independent registered public accounting
firm’s audit and the independent registered public accounting
firm’s opinion on the annual financial
statements;
ii.
analyses prepared by management or the independent registered
public accounting firm setting forth significant financial
reporting issues and judgments made in connection with the
preparation of the financial statements, including analyses of the
effects of alternative GAAP methods on the financial
statements;
iii.
the independent registered public accounting firm’s judgments
on the quality, not just the acceptability, and consistent
application of the Corporation’s accounting principles, the
reasonableness of significant judgments, clarity of disclosures and
underlying estimates in the financial statements;
iv.
major issues regarding accounting principles and financial
statement presentations, including changes in accounting principles
or application thereof, significant judgment areas, and significant
and complex transactions;
v.
the effectiveness and adequacy of the Corporation’s internal
auditing; and
vi.
any disagreements between management and the independent registered
public accounting firm, about matters that individually or in the
aggregate could be significant to the Corporation’s financial
statements or the independent registered public accounting
firm’s report, and any serious difficulties the independent
registered public accounting firm encountered in dealing with
management related to the performance of the audit and
management’s response.
6.
Inclusion of Audited Financial
Statements in 10-K. The
Committee will make recommendations to the Board of Directors as to
whether the audited financial statements should be included in The
Corporation’s Annual Report on Form 10-K.
7.
Regulatory and Accounting
Initiatives and Off-Balance Sheet Structures. The Audit Committee will review the effect of regulatory and
accounting initiatives, as well as off-balance sheet structures, on
the Corporation’s financial statements.
8.
Earnings Press Releases,
Corporate Policies and Earnings Guidance. The Audit Committee will review and, where appropriate,
discuss earnings press releases, as well as corporate policies with
respect to financial information and earnings guidance provided to
analysts and ratings agencies.
9.
Report from Independent
Registered Public Accounting Firm. At least annually, the Audit Committee will obtain from and review a report by
the independent registered public accounting firm describing (a)
the independent registered public accounting firm’s internal
quality control procedures, and (b) any material issues raised by
the most recent internal quality-control review, or peer review, or
by any governmental or professional inquiry or investigation within
the preceding five years regarding any audit performed by the
independent registered public accounting firm, and any steps taken
to deal with any such issues.
10.
Disclosure Controls and
Procedures. The
Audit
Committee will review the adequacy and
effectiveness of the Corporation’s disclosure controls and
procedures.
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11.
Internal Controls.
The Audit Committee will review the adequacy and
effectiveness of the Corporation’s internal controls,
including any significant deficiencies in such controls and
significant changes or material weaknesses in such controls
reported by the independent registered public accounting firm, the
internal auditors or management and any special audit steps adopted
in light of material control deficiencies, and any fraud, whether
or not material, that involves management or other the
Corporation’s employees who have a significant role in such
controls.
12.
Information Security.
The Committee will review the adequacy
and effectiveness of The Corporation’s information security
policies and the internal controls regarding information
security.
13.
Internal Audit.
The Committee will review the overall
scope, qualifications, resources, activities, reports,
organizational structure and effectiveness of the internal audit
function. The Audit Committee will approve the appointment,
replacement, reassignment or dismissal and the compensation of the
Director of Internal Audit.
15.
Compliance. Subject to the overall supervisory responsibility
of the Governance Committee, the Audit Committee will oversee the Corporation’s
compliance programs with respect to legal and regulatory
requirements concerning financial reporting and disclosure, and
review with management and any persons designated with supervisory
responsibility over internal audit or compliance matters, as
appropriate, the results of their review of compliance with
applicable laws, regulations and listing standards, the
Corporation’s Code of Conduct and internal audit
reports.
16.
Complaints and
Submissions. The
Audit
Committee will oversee procedures
established for the receipt, retention and treatment of complaints
on accounting, internal accounting controls or auditing matters, as
well as for confidential, anonymous submissions by the
Corporation’s employees of concerns regarding questionable
accounting or auditing matters and compliance with The
Corporation’s code of Conduct and Whistleblower
Policies.
17.
Attorneys’
Reports. The Committee will
receive and, if appropriate, respond to attorneys’ reports of
evidence of material violations of securities laws and breaches of
fiduciary duty and similar violations of U.S. or state
law.
18.
Risks. The Audit Committee will review and assess risks facing the
Corporation’s and management’s approach to addressing
these risks, including significant risks or exposures relating to
litigation and other proceedings and regulatory matters that may
have a significant impact on the Corporation’s financial
statements.
19.
Regulatory
Investigations. The
Audit
Committee will review the results of
significant investigations, examinations or reviews performed by
regulatory authorities and management’s
response.
20.
Related Party
Transactions. The
Audit
Committee will monitor compliance with
the Board of Director’s review and approval of “related
party transactions,” as defined in applicable SEC
rules.
21.
Investigations.
The Audit Committee will conduct or authorize investigations
into any matters within the Committee’s scope of
responsibilities.
22.
Treasury Matters.
The Audit Committee will review or oversee significant
treasury matters such as capital structure, derivative policy,
global liquidity, fixed income investments, borrowings, currency
exposure, dividend policy, share issuance and repurchase, capital
spending, and risk management identification and
coverage.
23.
Loans and Obligations.
The Audit Committee will oversee The Corporation’s
loans, loan guarantees of third party debt and obligations and
outsourcings.
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24.
Coordination with the
Compensation Committee. The Audit Committee will coordinate, as appropriate, with
the Compensation Committee regarding the cost, finding and
financial impact of equity compensation and
benefits.
25.
Other. The
Audit Committee may perform such other reviews and assessments and
make such other recommendations as it deems appropriate to carry
out its duties and discharge its
responsibilities.
Limitation of Audit Committee’s Role
While the Audit Committee has the responsibilities and powers set
forth in this Charter, the Audit Committee does not have
responsibility to plan or conduct audits or determine that the
Corporation’s financial statements are complete, accurate and
in accordance with generally accepted accounting principles and
applicable rules and regulations. Management is responsible for the
financial reporting process, including the system of internal
controls over financial reporting, and for the preparation of
consolidated financial statements in accordance with generally
accepted accounting principles. The Corporation’s independent
auditor is responsible for auditing those financial statements and
expressing an opinion as to their conformity with generally
accepted accounting principles. The Audit Committee’s
responsibility is to oversee and review these processes, but not to
professionally engage in the practice of accounting or auditing or
provide any expert or other special assurance as to such financial
statements concerning compliance with laws, regulations or
generally accepted accounting principles or as to auditor
independence. The members of the Committee may rely, without
independent verification, on the information provided to the
Committee and on the representations made by management and the
independent auditors.
Self-Assessments and Charter Review
The
Audit Committee shall annually conduct a confidential review of its
own performance. No report of its annual assessment shall be
required. The Audit Committee shall also periodically review and
reassess the adequacy of this Charter and recommend any proposed
changes to the Board of Directors for approval.
As Approved by the Board of Directors on August 23,
2017
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