Attached files
| file | filename |
|---|---|
| 8-K - Guanwei Recycling Corp. | v169330_8k.htm |
| EX-2.1 - Guanwei Recycling Corp. | v169330_ex2-1.htm |
| EX-3.1 - Guanwei Recycling Corp. | v169330_ex3-1.htm |
| EX-14.1 - Guanwei Recycling Corp. | v169330_ex14-1.htm |
| EX-99.2 - Guanwei Recycling Corp. | v169330_ex99-2.htm |
| EX-16.1 - Guanwei Recycling Corp. | v169330_ex16-1.htm |
| EX-99.3 - Guanwei Recycling Corp. | v169330_ex99-3.htm |
Exhibit 99.1
CHARTER
FOR THE AUDIT COMMITTEE
OF
THE BOARD OF DIRECTORS
OF
MD
HOLDINGS CORP.
Adopted
December 4, 2009
CHARTER
FOR THE AUDIT COMMITTEE
OF
THE BOARD OF DIRECTORS
OF
MD
HOLDINGS CORP.
I. PURPOSE
The
primary function of the Audit Committee (the “Committee”) is to represent
the Board of Directors (the “Board”) of MD Holdings Corp.
and its subsidiaries (the “Company”), in fulfilling its
oversight responsibilities by:
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1.
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Reviewing
the financial reports and other financial related information released by
the Company to the public, or in certain circumstances, governmental
bodies;
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2.
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Reviewing
the Company’s system of internal controls regarding finance, accounting,
business conduct and ethics and legal compliance that management and the
Board have established;
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3.
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Reviewing
the Company’s accounting and financial reporting
processes;
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4.
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Reviewing
and appraising with management the performance of the Company’s
independent auditors;
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5.
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Providing
an open avenue of communication between the independent auditors and the
Board; and
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6.
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Overseeing
the audits of the financial statements of the
Company.
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II. COMPOSITION
The
Committee shall be comprised of at least three members. Each
Committee member shall be appointed by the majority of the Board, and unless
otherwise agreed upon by a majority of the Board, be independent directors
and free from any relationship that, in the opinion of the Board, would
interfere with the exercise of his or her independent judgment as a member of
the Committee. For purposes hereof, the term “independent” shall be
based on the independence requirements of the NASDAQ Stock Market (for
convenience, selected provisions of the independence requirements are set forth
on Exhibit A
hereto; reference is also made to the complete text of Rules 4200 and 4350 in
the NASDAQ Manual, and the standards set forth in Rule 10A-3(b)(1) of the
Securities Exchange Act of 1934, as amended).
All
members of the Committee shall have a working familiarity with basic finance and
accounting practices, and at least one member of the Committee shall have
financial management expertise as determined by the Board. In
addition, unless otherwise agreed upon by a majority of the Board, at least
one member of the Committee shall be designated an “audit committee financial
expert,” as determined by the Board in accordance with the applicable rules of
the Securities and Exchange Commission.
The
members of the Committee shall be elected or reappointed by the Board annually
for a one year term. A Chairperson shall be appointed by the
Board.
III. MEETINGS
The
Committee will meet at least three times annually and be available to meet more
frequently as circumstances dictate. Scheduled meetings of the
Committee are (a) to review and approve the scope of the annual audit to be
performed by the Company’s independent auditors and (b) to review and discuss
the results of the audit and the Company’s 10-K report, prior to its filing.
Incidental to any of these regularly scheduled meetings, the Committee should
meet, if necessary, with management and the independent auditors in separate
executive sessions to discuss any matters that the Committee and each of these
groups believe should be discussed privately.
IV. RESPONSIBILITIES
AND DUTIES
To
fulfill its responsibilities and duties the Committee shall:
Documents/Reports
Review
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1.
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Review
and reassess the adequacy of this Charter on an annual basis or as
conditions dictate.
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2.
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Review
and approve the Company’s Business Conduct
policies.
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3.
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Discuss
with management and the independent auditors, the annual audited financial
statements and other reports and financial and related information
released to the public, or in certain circumstances governmental bodies,
including any certification, attestation, report, opinion or review
rendered by the independent
auditors.
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4.
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Discuss
with management and the independent auditors, as necessary, the quarterly
financial information. The Chairperson of the Committee may
represent the entire Committee for purposes of this
review.
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5.
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Review
with independent auditors the recommendations included in their management
letter, if any, and their informal observations regarding the adequacy of
overall financial and accounting procedures of the Company, including the
resolution of disagreements between management and the independent auditor
regarding financial reporting. On the basis of this review,
make recommendations to senior management for any changes that seem
appropriate.
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2
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6.
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Prepare
the minutes of each meeting, distribute the minutes to all members of the
Committee and provide periodic summary reports to the
Board. The permanent file of the minutes will be maintained by
the Secretary of the Company.
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Independent
Auditors
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1.
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Select,
evaluate, and if appropriate, terminate or replace the independent
auditors. The Committee will arrange to receive from the
independent auditors a formal written statement on at least annual basis
delineating all relationships between the independent auditor and the
Company, consistent with Independence Standards Board Standard I (for
convenience, selected portions of which are attached hereto as Exhibit B;
reference is also made to the complete text of Independence Standards
Board Standard I), which shall (a) set forth all relationships between the
independent auditor and its related entities and the Company and its
related entities that in the independent auditor’s professional judgment
may reasonable be thought to bear on independence, and (b) confirm that in
the auditor’s professional judgment, it is independent of the Company
within the meaning of the Securities Exchange Act of 1934, as amended, and
the Securities Act of 1933, as amended. On an annual basis, the Committee
will review and discuss with the auditors all significant relationships,
including non-audit services proposed or performed, the auditors have with
the Company to determine the auditors’ independence, especially in light
of any disclosed relationships or services that may impact the objectivity
and independence of the auditor. The independent auditors are
accountable to the Committee and to the
Board.
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2.
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The
Committee shall approve the audit engagement and fees related thereto and
pre-approve any other services and fees related thereto to be provided by
the independent auditors.
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3.
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Annually
consult with the independent auditors out of the presence of management
about internal controls and the fullness and accuracy of the Company’s
financial statements.
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Financial
Reporting Process
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1.
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In
consultation with the independent auditors, review the integrity of the
Company’s financial reporting process, both internal and
external.
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2.
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Review
and consider the independent auditors’ judgments about the appropriateness
of the Company’s accounting principles as applied in its financial
reporting.
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3.
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Review
and consider major changes to the Company’s accounting principles and
practices as proposed by management or the independent
auditors.
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Process
Improvement
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1.
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Establish
regular reporting to the Committee by management and the independent
auditors regarding any principal/critical risks, emerging or developing
issues and significant judgments made or to be made in management’s
preparation of the financial
statements.
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2.
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Following
completion of the annual audit, review separately with management and the
independent auditors any significant difficulties encountered during the
course of the audit, including any restrictions on the scope of work or
access to required information.
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3.
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Review
any significant disagreement among management and the independent auditors
in connection with the preparation of the financial
statements.
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4.
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Review
with the independent auditors and management the extent to which changes
or improvements in financial or accounting practices, as approved by the
Committee, have been implemented.
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5.
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Take,
or recommend the Board take, appropriate action to oversee the
independence of the independent
auditors.
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Ethical
and Legal Compliance
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1.
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Establish
procedures for the review, treatment, and retention of complaints or
concerns received by the Company regarding accounting, internal accounting
controls, or auditing matters, including enabling employees to submit
concerns regarding questionable accounting or auditing matters
confidentially and anonymously, and review management’s disclosure of any
frauds that involve management or other employees who have a significant
role in internal control.
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2.
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Review
the Company’s operations and determine whether management has established
and maintains effective programs and processes to ensure compliance with
its Business Conduct policies.
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3.
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Review
management’s programs and processes for risk management and protection of
the Company’s assets and business.
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4.
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Review
management’s monitoring of the Company’s compliance with the above
programs to ensure that management has the proper review system in place
to ensure that the Company’s financial statements, reports and other
financial information disseminated to governmental organizations and the
public satisfy legal requirements.
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5.
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Review,
with the Company’s counsel, legal compliance matters, including corporate
securities trading policies.
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6.
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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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7.
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Perform
any other activities consistent with this Charter, the Company’s By-laws
and government law, as the Committee or the Board deems necessary or
appropriate.
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Outside
Advisors
The
Committee shall have the authority to retain such outside counsel, accountants,
auditors, experts and other advisors as it determines appropriate to assist it
in the performance of its functions and shall receive appropriate funding, as
determined by the Committee, from the Company for payment of compensation to any
such outside counsel, accountants, auditors, experts or advisors and for
ordinary administrative expenses of the Committee that are necessary or
appropriate in carrying out its duties.
5
Exhibit
A
Selected Provisions Relating
to Independence Standards for Directors
Rule
4350(d)(2)(A)
(2) Audit
Committee Composition
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(A)
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Each
issuer must have, and certify that it has and will continue to have, an
audit committee of at least three members, each of whom must: (i) be
independent as defined under Rule 4200(a)(15); (ii) meet the criteria for
independence set forth in Rule 10A-3(b)(1) under the Act (subject to the
exemptions provided in Rule 10A-3(c)); (iii) not have 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 years; and
(iv) be able to read and understand fundamental financial statements,
including a company’s balance sheet, income statement, and cash flow
statement. Additionally, each issuer must certify that it has, and will
continue to have, at least one member of the audit committee who has past
employment experience in finance or accounting, requisite professional
certification in accounting, or any other comparable experience or
background which results in the individual’s financial sophistication,
including being or having been a chief executive officer, chief financial
officer or other senior officer with financial oversight
responsibilities.
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Rule
4200(a)(14)-(15)
(14)
“Family Member”
means a person’s spouse, parents, children and siblings, whether by blood,
marriage or adoption, or anyone residing in such person’s home.
(15)
“Independent
director” means a person other than an executive officer or employee of
the company or any other individual having a relationship which, in the opinion
of the issuer’s board of directors, would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director. The
following persons shall not be considered independent:
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(A)
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a
director who is, or at any time during the past three years was, employed
by the company;
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(B)
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a
director who accepted or who has a Family Member who accepted any
compensation from the company in excess of $100,000 during any period of
twelve consecutive months within the three years preceding the
determination of independence, other than the
following:
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(i)
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compensation
for board or board committee
service;
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(ii)
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compensation
paid to a Family Member who is an employee (other than an executive
officer) of the company; or
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(iii)
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benefits
under a tax-qualified retirement plan, or non-discretionary
compensation.
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Provided,
however, that in addition to the requirements contained in this paragraph
(B), audit committee members are also subject to additional, more
stringent requirements under Rule
4350(d).
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(C)
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a
director who is a Family Member of an individual who is, or at any time
during the past three years was, employed by the company as an executive
officer;
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(D)
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a
director who is, or has a Family Member who is, a partner in, or a
controlling shareholder or an executive officer of, any organization to
which the company made, or from which the company received, payments for
property or services in the current or any of the past three fiscal years
that exceed 5% of the recipient’s consolidated gross revenues for that
year, or $200,000, whichever is more, other than the
following:
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(i)
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payments
arising solely from investments in the company’s securities;
or
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(ii)
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payments
under non-discretionary charitable contribution matching
programs.
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(E)
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a
director of the issuer who is, or has a Family Member who is, employed as
an executive officer of another entity where at any time during the past
three years any of the executive officers of the issuer serve on the
compensation committee of such other entity;
or
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(F)
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a
director who is, or has a Family Member who is, a current partner of the
company’s outside auditor, or was a partner or employee of the company’s
outside auditor who worked on the company’s audit at any time during any
of the past three years.
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(G)
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in
the case of an investment company, in lieu of paragraphs (A)–(F), a
director who is an “interested person” of the company as defined in
Section 2(a)(19) of the Investment Company Act of 1940, other than in his
or her capacity as a member of the board of directors or any board
committee.
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Rule
10A-3(b)(1)
b. Required
standards.
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Independence.
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i.
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Each
member of the audit committee must be a member of the board of directors
of the listed issuer, and must otherwise be independent; provided that,
where a listed issuer is one of two dual holding companies, those
companies may designate one audit committee for both companies so long as
each member of the audit committee is a member of the board of directors
of at least one of such dual holding
companies.
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ii.
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Independence requirements for
non-investment company issuers. In order to be considered to be
independent for purposes of this paragraph (b)(1), a member of an audit
committee of a listed issuer that is not an investment company may not,
other than in his or her capacity as a member of the audit committee, the
board of directors, or any other board
committee:
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Accept
directly or indirectly any consulting, advisory, or other compensatory fee
from the issuer or any subsidiary thereof, provided that, unless the rules
of the national securities exchange or national securities association
provide otherwise, compensatory fees do not include the receipt of fixed
amounts of compensation under a retirement plan (including deferred
compensation) for prior service with the listed issuer (provided that such
compensation is not contingent in any way on continued service);
or
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Be
an affiliated person of the issuer or any subsidiary
thereof.
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8
Exhibit
B
Selected Provisions of
Independence Standards Board Standard I
From the
Independence Standards Board (ISB). Independence Standards Board Standard No.1,
Independence Discussions with Audit Committees.
Executive
Summary
What are
the independence issues to be considered in discussions between audit committees
and outside auditors? A past standard from the former Independence Standards
Board states that auditors should:
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Inform
the committee in writing of any relationships that might have a bearing on
independence.
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Confirm
that they are independent of the company based on existing securities
laws.
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Discuss
the issue of independence with the audit
committee.
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The
standard also describes comments received when the standard was in proposal form
and the board’s resulting deliberations.
Independence
Standards Board Standard No. 1, Independence Discussions with Audit
Committees
Standard
1. This
standard applies to any auditor intending to be considered an independent
accountant with respect to a specific entity within the meaning of the
Securities Acts (“the Acts”) administered by the Securities and Exchange
Commission. At least annually, such an auditor shall:
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·
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disclose
to the audit committee of the company (or the board of directors if there
is no audit committee), in writing, all relationships between the auditor
and its related entities and the company and its related entities that in
the auditor’s professional judgment may reasonably be thought to bear on
independence;
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·
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confirm
in the letter that, in its professional judgment, it is independent of the
company within the meaning of the
Acts;
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and
discuss the auditor’s independence with the audit
committee.
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