Attached files
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8-K - UNIVERSAL TRAVEL GROUP | v199810_8k.htm |
EX-14.1 - UNIVERSAL TRAVEL GROUP | v199810_ex14-1.htm |
EX-99.2 - UNIVERSAL TRAVEL GROUP | v199810_ex99-2.htm |
EX-99.1 - UNIVERSAL TRAVEL GROUP | v199810_ex99-1.htm |
UNIVERSAL
TRAVEL GROUP
AUDIT
COMMITTEE CHARTER
Purpose
The
Committee is established by the Board of Directors primarily for the purpose of
overseeing the accounting and financial reporting processes of Universal Travel
Group (the “Company”) and audits of the financial statements of the
Company.
The
Committee is responsible for assisting the Board’s oversight of (1) the quality
and integrity of the Company’s financial statements and related disclosure, (2)
the Company’s compliance with legal and regulatory requirements, (3) the
independent auditor’s qualifications and independence, and (4) the performance
of the Company’s internal audit function and independent auditors and internal
controls.
Composition
1.
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Members. The
Committee shall consist of as many members as the Board shall determine,
but in any event not fewer than three members. The members of
the Committee shall be appointed annually by the
Board.
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2.
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Qualifications.
Each member of the Committee shall meet all applicable independence,
financial literacy and other requirements of law and the New York Stock
Exchange or any other applicable regulatory authority. At least one member
of the Committee must meet the applicable Securities and Exchange
Commission definition of financial expert. A Committee member shall not
simultaneously serve on the audit committees of more than two other public
companies unless the Board determines that such simultaneous service would
not impair the ability of such Committee member to serve effectively on
the Committee.
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3.
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Chair. The
Chair of the Committee shall be appointed by the
Board.
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4.
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Removal and Replacement. The
members of the Committee may be removed or replaced, and any vacancies on
the Committee shall be filled, by the
Board.
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Operations
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1.
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Meetings. The
Chair of the Committee, in consultation with the Committee members, shall
determine the schedule and frequency of the Committee meetings, provided
that the Committee shall meet at least four times per year. The
Committee shall meet separately, periodically, with management, the
Compliance Officer, the external/internal counsel, the internal auditors
and the independent auditor. The Committee shall also meet
separately with the independent auditor at every meeting of the Committee
at which the independent auditor is
present.
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2.
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Agenda. The
Chair of the Committee shall develop and set the Committee’s agenda, in
consultation with other members of the Committee, the Board and
management. The agenda and information concerning the business
to be conducted at each Committee meeting shall, to the extent
practical, be communicated to the members of the Committee sufficiently in
advance of each meeting (at least 3 days before the intended date of
a meeting) to permit meaningful
review.
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3.
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Report to Board. The
Committee shall report regularly to the entire Board on their decisions or
recommendations, and shall submit to the Board the minutes of its
meetings, unless there are legal or regulatory restrictions on its ability
to do so (such as a restriction on disclosure due to regulatory
requirements). Subject to the foregoing, the Committee shall in particular
report to the Board on matters set out below, identifying any matters in
respect of which it considers that action or improvement is needed and
making recommendations as to the steps to be taken. The
Committee shall consider other topics as defined by the
Board.
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4.
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Self-Evaluation; Assessment of Charter. The
Committee shall conduct an annual performance self-evaluation and shall
report to the entire Board the results of the
self-evaluation. The Committee shall assess the adequacy of
this Charter on an annual basis and recommend any changes to the
Board.
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Authority
and Duties
Independent Auditor’s
Qualifications and
Independence
1.
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The
Committee shall be directly responsible for making recommendation to the
Board on the appointment, reappointment, retention, evaluation, oversight
and termination of the work of the independent auditor employed
by the Company (including resolution of disagreements between
management and the independent auditor regarding reporting) for the
purpose of preparing or issuing an audit report or performing other audit,
review or attest services for the Company, and to approve the remuneration
and terms of engagement of that auditor, and any questions of resignation
or dismissal of that auditor. The independent auditor shall
report directly to the Committee, which shall be responsible
for:
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(i)
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signing
the independent auditor’s engagement letter for all services or at least
reviewing and pre-approving it before management signs
it;
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(ii)
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discussing
with the independent auditor the scope of their work, key risks areas, how
the audit plan responds to the risk of financial statement misstatement,
and approving modifications to the annual audit
plan;
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(iii)
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discussing
the use of any other auditing firm in performing work related
to the audit (subsidiaries) and understanding the
rationale behind such
decisions;
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(iv)
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receiving
and reviewing all required communications from the
independent auditor; and
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(v)
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holding
regular private meetings with the independent auditor and
establishing a protocol to ensure it is notified,
directly and on a timely basis, of major
issues.
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2.
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The
Committee shall have the sole authority to preapprove any non-audit
services to be provided by the independent auditor. The
Committee shall review with the lead audit partner whether any of the
audit team members receive any discretionary compensation from the audit
firm with respect to non-audit services procured by the independent
auditor. The Committee shall ensure that the provision by an
external auditor of non-audit services does not impair the external
auditor’s independence or objectivity. When assessing the
external auditor’s independence or objectivity in relation to the
provision of non-audit services, the Committee shall
consider:
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(i)
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whether the skills and experience of the audit firm make it a
suitable supplier of the non-audit
services;
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(ii)
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whether
there are safeguards in place to ensure that there is no threat to
objectivity and independence in the conduct of the audit resulting from
the provision of such services by the external
auditor;
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(iii)
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the
nature of the non-audit services, the related fee levels and the fee
levels individually and in aggregate relative to the audit firm;
and
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(iv)
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the criteria which govern the compensation of the individuals
performing the audit.
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For this
purpose, external auditor shall include any entity that is under common control,
ownership or management with the audit firm or any entity that a reasonable and
informed third party having knowledge of all relevant information would
reasonably conclude as part of the audit firm nationally or
internationally.
3.
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The
Committee shall obtain and review with the lead audit partner and a more
senior representative of the independent auditor, annually or more
frequently as the Committee considers appropriate, a report by the
independent auditor describing: the independent auditor’s internal
quality- control procedures; any material issues raised by the most recent
internal quality-control review, or peer review, of the independent
auditor, or by any inquiry, review or investigation by governmental,
professional or other regulatory authorities, within the preceding five
years, respecting independent audits carried out by the independent
auditor, and any steps taken to deal with these issues; and (to assess the
independent auditor’s independence) all relationships between the
independent auditor and the Company. The Committee shall, in addition to
assuring the regular rotation of the lead and concurring audit partners,
consider whether there should be regular rotation of the audit firm or
other members of the independent auditor
team.
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4.
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The
Committee shall review the experience, qualifications and performance of
the senior members of the independent auditor team and to review and
monitor the independent auditor’s independence and objectivity and the
effectiveness of the audit process in accordance with the applicable
standard. The Committee shall discuss with the independent auditor the
nature and scope of the audit and reporting obligations before the annual
audit commences. The Committee shall act as the key representative body
for overseeing the Company’s relation with independent auditor. Without
limiting the foregoing, the Committee shall establish the following
procedure to review and monitor the independence of external
auditors:
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(i)
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consider
all relationships between the Company and the audit firm (including
the provision of non-audit
services);
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(ii)
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seek
from the audit firm, on an annual basis, information about policies and
processes for maintaining independence and monitoring compliance with
relevant requirements, including current requirements regarding rotation
of audit partners and staff; and
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(iii)
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meet with the auditor, at least annually, in the absence of
management, to discuss matters relating to its audit fees, any issues
arising from the audit and any other matters the auditor may wish to
raise.
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5.
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The
Committee shall preapprove the hiring of any employee or former employee
of the independent auditor who was a member of the Company’s audit team
during the preceding three fiscal years. In addition, the Committee shall
preapprove the hiring of any employee or former employee of the
independent auditor (within the preceding three fiscal years) for senior
positions within the Company, regardless of whether that person was a
member of the Company’s audit
team.
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Financial Statements and Related
Disclosure
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6.
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The
Committee shall review the annual audited financial statements and any
interim or quarterly financial statements or results with management and
the independent auditor, including the Company’s disclosures under
“Management’s Discussion and Analysis of Financial Condition and Results
of Operations,” before the filing of the Company’s reports with the
Securities and Exchange Commission and any other regulatory
authority. The Committee shall also monitor integrity of financial
statements of the Company and the Company’s annual report and accounts,
half-year report, quarterly reports and to review significant
financial reporting judgments contained in them. In
this regard, in reviewing the Company’s annual report and accounts,
half-year report and quarterly reports before submission to the Board, the
Committee should focus particularly
on:
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(i)
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any
changes in accounting policies and
practices;
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(ii)
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the
process management uses to compile and consolidate the financial
statements;
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(iii)
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major
judgmental areas;
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(iv)
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significant
adjustments resulting from audit;
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(v)
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the
going concern assumptions and any
qualifications;
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(vi)
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significant
changes in financial statements from prior years and from budget, and is
provided with sufficient reliable supporting
evidence;
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(vii)
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compliance
with accounting standards; and
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(viii)
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compliance
with applicable listing rules and other legal requirements in relation to
financial reporting.
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In regard
to the above, members of the Committee must liaise with the Company’s Board,
senior management and the person appointed as the Company’s qualified accountant
and the Committee must meet, at least once a year, with the Company’s auditors.
The Committee should also consider any significant or unusual items that are, or
may need to be reflected in such reports and accounts and must give due
consideration to any matters that have been raised by the Company’s qualified
accountant, compliance officer or auditors.
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7.
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The Committee shall review with management earnings press releases
before they are issued. The
Committee shall review generally with management the nature of the
financial information and earnings guidance provided to analysts and
rating agencies.
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8.
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The
Committee shall review with the independent auditor: (a) all critical
accounting policies and practices to be used by the Company in preparing
its financial statements and the auditor’s judgment about the quality of
the Company’s accounting policies; management judgments and accounting
estimates, audit judgments; (b) all alternative treatments of financial
information within U.S. GAAP or any other applicable accounting standards
that have been discussed with management, ramifications of the use of
these alternative disclosures and treatments, and the treatment preferred
by the independent auditor, (c) other material communications between the
independent auditor and management, such as any management letter or
schedule of unadjusted differences, reports on observations and
recommendations on internal control, engagement letters, independence
letters; any disagreements with management; consultation with other
accountants; major issues discussed with management prior to retention;
difficulties encountered in performing the audit; (d) potential effect on
the financial statements of any significant risks and exposures, material
uncertainties, specifically going concern issues; (e) deficiencies in
internal control; fraud and illegal acts; other information in documents
containing audited financial information – the auditor’s responsibility
and any procedures performed and the results. In addition, the Committee
shall review with the independent auditor any audit problems or
difficulties and management’s
response.
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9.
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The
Committee shall review with management, and any outside professionals as
the Committee considers appropriate, the effectiveness of the Company’s
disclosure controls and procedures. The Committee shall
also review the Company’s financial
controls.
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10.
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The
Committee shall review with management, and any outside professionals as
the Committee considers appropriate, important trends and developments in
financial reporting practices and requirements and their effect on the
Company’s financial statements.
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Performance of the Internal
Audit Function and Independent
Auditors
11.
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The
Committee shall review with management, the internal auditor and the
independent auditor the scope, planning and staffing of the proposed audit
for the current year. The Committee shall also review the internal audit
function’s organization, responsibilities, plans, modifications to annual
plan, results, budget and staffing. In addition, management shall consult
with the Committee on the appointment, replacement, reassignment or
dismissal of the principal internal auditor. The Committee shall ensure
co-ordination between the internal and external auditors, and to ensure
that the internal audit function is adequately resourced and has
appropriate standing within the Company, and to review and monitor the
effectiveness of the internal audit function. The Committee shall focus
particularly on:
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(i)
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ensuring
direct access to internal audit and establishing a protocol with the
internal audit to ensure it is notified, directly and on a
timely basis, of major issues
found;
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(ii)
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understanding
and approving of the extent to which the internal audit function is
outsourced;
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(iii)
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holding
regular private meetings with the head of internal audit, and obtaining
their views on management’s involvement in the financial reporting process
and, in particular, the ability of management to override information
processed by the Company’s financial reporting
system;
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(iv)
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receiving
and reviewing periodic update of internal audit’s results and significant
findings.
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Internal Control
12.
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The
Committee shall review with management, the internal auditor and the
independent auditor the quality, adequacy and effectiveness of the
Company’s internal controls and any significant deficiencies or material
weaknesses in the design or operation of internal controls. The Committee
shall discuss with the management the system of internal control and
ensure that management has discharged its duty to have an effective
internal control system. The Committee shall focus particularly
on:
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(i)
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understanding
the current high risk areas and how management addresses those
areas;
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(ii)
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being
informed periodically of the process management follows for the
certifications required under applicable US rules;
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(iii) |
meeting
regularly with internal audit and discussing internal control deficiencies
discovered during the course of its work, its recommendations for
addressing the deficiencies, and management’s response;
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(iv) |
monitoring
the status of management’s corrective action;
and
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(v) |
determining
whether it is satisfied that management has established appropriate
controls and ensuring their ongoing
operations.
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13.
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The
Committee shall review the Company’s policies with respect to risk
assessment and risk management and the group’s financial and accounting
policies and practices.
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14.
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The
Committee shall consider any findings of major investigations of internal
control matters as delegated by the Board or on its own initiative and
management’s response;
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15.
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The
Committee shall review the external auditor’s management letter, any
material queries raised by the auditor to management in respect of the
accounting records, financial accounts or systems of control and
management’s response and to ensure that the Board will provide a timely
response to the issues raised in the external auditor’s management
letter.
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Compliance with Legal and
Regulatory Requirements
16.
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The Committee shall review with management, and any internal or
external counsel as the Committee considers appropriate, any legal matters
(including the status of pending litigation) that may have a material
impact on the Company and any material reports or inquiries from
regulatory or governmental
agencies.
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17.
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The
Committee shall review with the internal or external counsel as the
Committee considers appropriate, the adequacy and effectiveness of the
Company’s procedures to ensure compliance with its legal and regulatory
responsibilities.The Committee shall also review the legal and compliance
function’s organization, responsibilities, plans, results, budget and
staffing.
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18.
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The
Committee shall review arrangements by which employees of the Company may,
in confidence, raise concerns about possible improprieties in financial
reporting, internal control or other matters. The Committee shall ensure
that proper arrangements are in place for the fair and independent
investigation of such matters and for appropriate follow-up
action.
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19.
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The
Committee shall obtain reports from management, the internal auditor and
the independent auditor regarding compliance with all applicable legal and
regulatory requirements, including the Foreign Corrupt Practices Act. The
Committee shall focus particularly
on:
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(i)
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understanding
and periodically updating its understanding of the major legal and
compliance risks facing the Company, and how management addresses those
risks;
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(ii)
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receiving
and reviewing reports summarizing major findings of
regulatory reviews, and considering the impact the findings
have on the financial
statements;
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(iii)
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meeting
periodically with the Compliance Officer, any internal or external counsel
as the Committee considers appropriate, to discuss the results of any
regulatory reviews; and
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(iv)
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discussing
with management, internal auditors and external auditors the nature and
significance of any fraud involving senior management, any fraud causing a
material misstatement of the financial statements, and any fraud that
involves management or other employees who have a significant role in
internal controls. The foregoing list of duties is not exhaustive, and the
Committee may, in addition, perform such other functions as may be
necessary or appropriate for the performance of its oversight function.
The Committee shall have the power to delegate its authority and duties to
subcommittees or individual members of the Committee as it deems
appropriate. In discharging its oversight role, the Committee shall have
full access to all Company books, records, facilities and personnel. The
Committee may retain counsel, auditors or other advisors, in its sole
discretion.
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Regulation
S-K
20.
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The
Committee shall be responsible for preparing the disclosure required by
Item 407(d)(3)(i) of Regulation
S-K.
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Complaints
21.
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The
Committee must establish procedures
for:
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(i)
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The
receipt, retention and treatment of complaints received by the Company
regarding accounting, internal accounting controls, or auditing matters;
and
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(ii)
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The
confidential, anonymous submission by employees of the Company of concerns
regarding questionable accounting or auditing
matters.
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Funding
22.
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The
Company must provide for appropriate funding, as determined by the
Committee, in its capacity as a committee of the board of directors, for
payment of:
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(i)
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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 listing
issuer;
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(ii)
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Compensation
to any advisers employed by the Committee as it deems necessary to carry
out its duties.
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Clarification
of Audit Committee’s Role
The
Committee’s responsibility is one of oversight. It is the responsibility of the
Company’s management to prepare consolidated financial statements in accordance
with applicable law and regulations and of the Company’s independent auditor to
audit those financial statements. Therefore, each member of the Committee shall
be entitled to rely, to the fullest extent permitted by law, on the integrity of
those persons and organizations within and outside the Company from whom he or
she receives information, and the accuracy of the financial and other
information provided to the Committee by such persons or
organizations.