Attached files
Exhibit
99.1
KOKO
LTD.
CHARTER
- AUDIT COMMITTEE
Committee
Role
The
committee's role is to act on behalf of the board of directors and oversee all
material aspects of the company's reporting, control, and audit functions,
except those specifically related to the responsibilities of another standing
committee of the board. The audit committee's role includes a particular focus
on the qualitative aspects of financial reporting to shareholders and on company
processes for the management of business/financial risk and for compliance with
significant applicable legal, ethical, and regulatory requirements.
In
addition, the committee responsible for: (1) selection and oversight
of our independent accountant; (2) establishing procedures for the receipt,
retention and treatment of complaints regarding accounting, internal controls
and auditing matters; (3) establishing procedures for the confidential,
anonymous submission by our employees of concerns regarding accounting and
auditing matters; (4) establishing internal financial controls; (5) engaging
outside advisors; and, (6) funding for the outside auditor and any outside
advisors engagement by the audit committee.
The role
also includes coordination with other board committees and maintenance of
strong, positive working relationships with management, external and internal
auditors, counsel, and other committee advisors.
Committee
Membership
The
committee shall consist of the entire board directors. The committee
shall have access to its own counsel and other advisors at the committee's sole
discretion.
Committee
Operating Principles
The
committee shall fulfill its responsibilities within the context of the following
overriding principles:
(1)
|
Communications
- The chairperson and others on the committee shall, to the extent
appropriate, have contact throughout the year with senior management,
other committee chairpersons, and other key committee advisors, external
and internal auditors, etc., as applicable, to strengthen the committee's
knowledge of relevant current and prospective business
issues.
|
-1-
(2)
|
Committee
Education/Orientation - The committee, with management, shall develop and
participate in a process for review of important financial and operating
topics that present potential significant risk to the company.
Additionally, individual committee members are encouraged to participate
in relevant and appropriate self-study education to assure understanding
of the business and environment in which the company
operates.
|
(3)
|
Annual
Plan - The committee, with input from management and other key committee
advisors, shall develop an annual plan responsive to the "primary
committee responsibilities" detailed herein. The annual plan shall be
reviewed and approved by the full board.
|
(4)
|
Meeting
Agenda - Committee meeting agendas shall be the responsibility of the
committee chairperson, with input from committee members. It is expected
that the chairperson would also ask for management and key committee
advisors, and perhaps others, to participate in this
process.
|
(5)
|
Committee
Expectations and Information Needs - The committee shall communicate
committee expectations and the nature, timing, and extent of committee
information needs to management, internal audit, and external parties,
including external auditors. Written materials. including key performance
indicators and measures related to key business and financial risks, shall
be received from management, auditors, and others at least one week in
advance of meeting dates. Meeting conduct will assume board members have
reviewed written materials in sufficient depth to participate in
committee/board dialogue.
|
(6)
|
External
Resources -The committee shall be authorized to access internal and
external resources, as the committee requires, to carry out its
responsibilities.
|
(7)
|
Committee
Meeting Attendees - The committee shall request members of management,
counsel, internal audit, and external auditors, as applicable, to
participate in committee meetings, as necessary, to carry out the
committee responsibilities. Periodically and at least annually, the
committee shall meet in private session with only the committee members.
It shall be understood that either internal or external auditors, or
counsel, may, at any time, request a meeting with the audit committee or
committee chairperson with or without management attendance. In any case,
the committee shall meet in executive session separately with internal and
external auditors, at least annually.
|
(8)
|
Reporting
to the Board of Directors - The committee, through the committee
chairperson, shall report periodically, as deemed necessary, but at least
semi-annually, to the full board. In addition, summarized minutes from
committee meetings, separately identifying monitoring activities from
approvals, shall be available to each board member at least one week prior
to the subsequent board of directors
meeting.
|
-2-
(9)
|
Committee
Self Assessment - The committee shall review, discuss, and assess its own
performance as well as the committee role and responsibilities, seeking
input from senior management, the full board, and others. Changes in role
and/or responsibilities, if any, shall be recommended to the full board
for approval.
|
Meeting
Frequency
The
committee shall meet at least three times quarterly. Additional
meetings shall be scheduled as considered necessary by the committee or
chairperson.
Reporting
to Shareholders
The
committee shall make available to shareholders a summary report on the scope of
its activities. This may be identical to the report that appears in the
company's annual report.
Committee's
Relationship with External and Internal Auditors
(1)
|
The
external auditors, in their capacity as independent public accountants,
shall be responsible to the board of directors and the audit committee as
representatives of the shareholders.
|
(2)
|
As
the external auditors review financial reports, they will be reporting to
the audit committee. They shall report all relevant issues to the
committee responsive to agreed-on committee expectations. In executing its
oversight role, the board or committee should review the work of external
auditors.
|
(3)
|
The
committee shall annually review the performance (effectiveness,
objectivity, and independence) of the external and internal auditors. The
committee shall ensure receipt of a formal written statement from the
external auditors consistent with standards set by the Independent
Standards Board and the Securities and Exchange Commission. Additionally,
the committee shall discuss with the auditor relationships or services
that may affect auditor objectivity or independence. If the committee is
not satisfied with the auditors' assurances of independence, it shall take
or recommend to the full board appropriate action to ensure the
independence of the external auditor.
|
(4)
|
The
internal audit function shall be responsible to the board of directors
through the committee.
|
(5)
|
If
either the internal or the external auditors identify significant issues
relative to the overall board responsibility that have been communicated
to management but, in their judgment, have not been adequately addressed,
they should communicate these issues to the committee
chairperson.
|
(6)
|
Changes
in the directors of internal audit or corporate compliance shall be
subject to committee approval.
|
-3-
Primary
Committee Responsibilities
Monitor
Financial Reporting and Risk Control Related Matters
The
committee should review and assess:
(1)
|
Risk
Management - The company's business risk management process, including the
adequacy of the company's overall control environment and controls in
selected areas representing significant financial and business
risk.
|
(2)
|
Annual
Reports and Other Major Regulatory Filings - All major financial reports
in advance of filings or distribution.
|
(3)
|
Internal
Controls and Regulatory Compliance - The company's system of internal
controls for detecting accounting and reporting financial errors, fraud
and defalcations, legal violations, and noncompliance with the corporate
code of conduct.
|
(4)
|
Internal
Audit Responsibilities - The annual audit plan and the process used to
develop the plan. Status of activities, significant findings,
recommendations, and management's response.
|
(5)
|
Regulatory
Examinations - SEC inquiries and the results of examinations by other
regulatory authorities in terms of important findings, recommendations,
and management's response.
|
(6)
|
External
Audit Responsibilities - Auditor independence and the overall scope and
focus of the annual/interim audit, including the scope and level of
involvement with unaudited quarterly or other interim-period
information.
|
(7)
|
Financial
Reporting and Controls - Key financial statement issues and risks, their
impact or potential effect on reported financial information, the
processes used by management to address such matters, related auditor
views, and the basis for audit conclusions. Important conclusions on
interim and/or year-end audit work in advance of the public release of
financials.
|
(8)
|
Auditor
Recommendations - Important internal and external auditor recommendations
on financial reporting, controls, other matters, and management's
response. The views of management and auditors on the overall quality of
annual and interim financial reporting.
|
The
committee should review, assess, and approve:
|
|
(1)
|
The
code of ethical conduct.
|
(2)
|
Changes
in important accounting principles and the application thereof in both
interim in and annual financial
reports.
|
-4-
(3)
|
Significant
conflicts of interest and related-party transactions.
|
(4)
|
External
auditor performance and changes in external audit firm (subject to
ratification by the full board).
|
(5)
|
Internal
auditor performance and changes in internal audit leadership and/or key
financial management.
|
(6)
|
Procedures
for whistle blowers.
|
(7)
|
Pre-approve
allowable services to be provided by the auditor.
|
(8)
|
Retention
of complaints.
|
-5-