ANNEX D
AUDIT COMMITTEE CHARTER
I. COMPOSITION AND TERMS OF OFFICE
A. The Audit Committee (the "Committee") shall be appointed by the
Board of Directors and shall be composed of at least three directors. All
members shall be independent of management and free from any relationship that
would interfere with the exercise of independent judgment. The Chairman of the
Committee shall be appointed by the Board of Directors.
B. Members of the Committee shall serve until the next meeting of the
Board of Directors which coincides with the Annual Meeting of the Shareholders
or until their successors are appointed.
II. MEETINGS
The Committee shall hold at least four (4) regular meetings each year and
such additional meetings as may be deemed necessary by the Committee Chairman.
Minutes of each Committee meeting shall be submitted to the Board of Directors.
At the discretion of the Board of Directors, the Chairman of the Committee will
report verbally to the full Board of Directors on matters discussed or any
action taken at previous Committee meetings.
To assure the Committee's access to the internal auditors of Left Right
Marketing Technology, Inc. (the "Company"), the Company's independent public
accountants and key financial management, the Committee may request, as it
deems appropriate, attendance at its regular meetings of the independent public
accountants, Chief Accounting Officer, Chief Financial Officer, and such other
members of the Company's management as circumstances require. At least
annually, the Committee shall meet separately with the independent public
accountants without members of management present.
Minutes of each meeting shall be taken by the Corporate Secretary or his
or her delegate and circulated for approval at the next succeeding meeting of
the Committee. Approved minutes will then be submitted to the Board of
Directors at its next meeting for ratification of any action reported as having
been taken by the Committee. Copies of all minutes of Committee meetings shall
be provided to the Secretary of the Company for retention with the permanent
records of the Company.
III. GOALS
Management has primary responsibility for the integrity and objectivity
of the Company's financial reporting subject to oversight by the Board of
Directors. The Committee shall, on behalf of the Board of Directors, review
management's actions in this regard to ensure that:
A. A fair presentation of published financial information is made in
accordance with generally accepted accounting principles and in compliance with
all applicable professional and regulatory requirements;
B. A highly developed system of internal controls, policies and
procedures is maintained;
C. The system of internal controls, policies and procedures provides
reasonable assurance that transactions are properly authorized and recorded to
adequately safeguard the Company's assets and permit preparation of the
financial statements in accordance with generally accepted accounting
principles;
D. The system of internal controls, policies and procedures provides
reasonable assurance that the risk of significant criminal misconduct is
minimized and that any such misconduct, should it occur, will be detected; and
E. The quality of internal and external audit efforts is adequate and
that the Company's public accountants are independent.
IV. DUTIES AND RESPONSIBILITIES
In meeting its responsibilities, the Committee is expected to perform the
following:
A. FINANCIAL REPORTING
1. Review the Company's annual financial statements, including
discussion of any unusual or non-recurring items, with the Chief Financial
Officer prior to issuance to the public. Discuss annual audit results and the
auditors' reports with the Company's independent public accountants.
2. Review accounting principles applied in financial reporting
with particular emphasis on any changes from principles followed in prior
years.
3. At least annually, meet with in-house counsel to discuss
legal matters that may have a material impact on the financial statements.
Meet with outside counsel as appropriate.
4. At least annually, meet with appropriate management to review
tax matters affecting the Company.
5. Review reasons for obtaining second opinions on significant
accounting issues and any actions taken by management in reliance on any such
opinion.
6. Annually review Company's compliance with lease and
management contract obligations.
B. RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
1. Annually, confirm management's recommendation as to selection
of the Company's independent public accountants. Recommend appointment of
independent public accountants annually to the Board of Directors for
submission to shareholders for approval.
2. Review annual letter from the Company's independent public
accountants affirming their independence and their free access to the
Committee.
3. Receive annual report from the Company's independent public
accountants on the quality of the services provided by their firm. This will
potentially include a discussion of lawsuits (outstanding and settled in the
past year), SEC enforcement actions against the firm and the firm's clients
arising from accounting/disclosure matters, and the latest peer review report.
4. If requested, representatives of the Company's independent
public accountants shall be present at each meeting of the Committee. Members
of the Committee shall have unrestricted access to such representatives with or
without the presence of management.
C. AUDIT PLANS AND OVERALL CONTROL ENVIRONMENT
1. Annually, review audit plans with the Company's Chief
Financial Officer and its independent public accountants and evaluate adequacy
of proposed audit scope.
2. Review progress of internal audit plan and key findings.
3. Review with independent public accountants and the Company's
Chief Financial Officer the overall adequacy and effectiveness of internal
controls, and policies and procedures.
4. Annually, review the follow up by management of independent
public accountants and internal audit matters covered by the Company's
independent public accountants' letter of recommendations. Review management's
actions regarding prior year recommendations.
D. DIVERSITY
1. Annually, review the diversity of the Company's workforce.
2. Review plan(s) to promote workforce diversity, minority owned
business purchasing, and involvement in minority community activities and
organizations.
3. Review any legal issues regarding workforce diversity.
E. OTHER
1. Institute investigations of suspected improprieties on any
material matter selected by the Committee, using special counsel or outside
experts when necessary. The Internal Audit Department will be available to
provide staff support for the Committee.
2. Annually, disclose amounts received by Committee members from
the Company and its affiliates and any other transactions with the Company or
its affiliates, to which they are a party, other than amounts received for
service as a Director or Board Committee member. Such disclosure shall be
noted in the minutes of the appropriate Committee meeting.
3. Annually, review significant related party transactions or
other significant conflicts of interest between the Company and its officers,
directors, and major shareholders.
4. Annually, review the Company's charitable giving process.
Review recipients for ties to Company operations.
5. Annually, review and propose amendments, as appropriate, on
the Committee's charter to the Board of Directors.
V. OTHER DUTIES AND RESPONSIBILITIES
The Committee is responsible for the duties set forth in this charter but
is not responsible for either the preparation of the financial statements or
the auditing of the financial statements. The Company has the responsibility
for preparing the financial statements and implementing internal controls and
the independent public accountants have the responsibility for auditing the
financial statements and monitoring the effectiveness of the internal controls.
The review of the financial statements by the audit committee is not of the
same quality as the audit performed by the independent public accountants. In
carrying out its responsibilities, the Committee believes its policies and
procedures should remain flexible in order to best react to a changing
environment.