Committee Charters
Audit Committee Charter
AUDIT COMMITTEE CHARTER
This
Audit Committee Charter (“Charter”)
has been adopted by the Board of
Directors (the “Board”) of
Thermodynetics,
Inc. (the “Company”).
The Audit Committee of the Board
(the “Committee”) shall review
and reassess this charter annually and
recommend any proposed changes to the
Board for approval.
Role
and
Independence:
Organization
The
Committee assists the Board in
fulfilling its responsibility for
oversight of the quality and integrity
of the accounting, auditing, internal
control and financial reporting
practices of the Company.
It may also have such other
duties as may from time to time be
assigned to it by the Board.
The membership of the Committee
shall consist of at least three (3)
directors, who are each free of any
relationship that in the opinion of the
Board may interfere with such member’s
individual exercise of independent
judgment. Each
Committee member shall, to the extent
possible, also meet the independence and
financial literacy requirements for
serving on audit committees and at least
one member shall have accounting or
related financial management expertise
all as set forth in the applicable rules
of the NASDAQ. The
Committee shall maintain free and open
communication with the independent
auditors, the internal auditors when
applicable and Company management.
In discharging its oversight role
the Committee is empowered to
investigate any matter relating to the
Company’s accounting, auditing, internal
control or financial reporting practices
brought to its attention with full
access to all Company books, records,
facilities and personnel.
The Committee may retain outside
counsel, auditors or other advisors.
One
member of the Committee shall be
appointed as chairperson (the “Audit-Chair”).
The Audit-Chair shall be
responsible for leadership of the
Committee, including scheduling and
presiding over meetings, preparing
agendas and making, regular reports to
the Board. The
Audit-Chair will also maintain regular
liaison with the CEO, CFO, the lead
independent audit partner and the
director of internal audit, when
appropriate.
The
Committee shall meet at least four (4)
times a year or more frequently as the
Committee considers necessary.
At least once each year the
Committee shall have separate private
meetings with the independent auditors,
management and the internal auditors.
The
Committee’s job is one of oversight.
Management is responsible for the
preparation of the Company’s financial
statements and the independent auditors
are responsible for auditing those
financial statements.
The Committee and the Board
recognize that management (including the
internal audit staff, when applicable)
and the independent auditors have more
resources and time, and more detailed
knowledge and information regarding the
Company accounting, auditing, internal
control and financial reporting
practices than the Committee does;
accordingly the Committee’s oversight
role does not provide any expert or
special assurance as to the financial
statements and other financial
information provided by the Company to
its shareholders and others.
Responsibilities
The
following responsibilities shall be the
general recurring activities of the
Committee in carrying out its oversight
role. These
responsibilities are set forth as a
guide with the understanding that the
Committee may diverge from this guide as
appropriate given the circumstances.
The Committee shall be
responsible for:
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Meeting at least four (4) times
a year or more frequently as the
Committee considers necessary.
At least once each year
the Committee shall have
separate private meetings with
the independent auditors,
management and the internal
auditors.
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Recommending to the Board the
independent auditors to be
retained (or nominated for
shareholder approval) to audit
the financial statements of the
Company, which auditors are
ultimately accountable to the
Board and the Committee, as
representatives of the
shareholders.
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Evaluating, together with the
Board and management, the
performance of the independent
auditors and where appropriate
replacing such auditors.
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Obtaining annually from the
independent auditors a formal
written statement describing all
relationships between the
auditors and the Company,
consistent with Independence
Standards Board Standard Number
1. The
Committee shall actively engage
in a dialogue with the
independent auditors with
respect to any relationships
that may impact the objectivity
and independence of the auditors
and shall take or recommend that
the Board take appropriate
actions to oversee and satisfy
itself as to the auditors’
independence.
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Reviewing the audited financial
statements and discussing them
with management and the
independent auditors.
These discussions shall
include the matters required to
be discussed under Statement of
Auditing Standards No.
61 and consideration of
the quality of the Company’s
accounting principles as applied
in its financial reporting,
including a review of
particularly sensitive
accounting estimates, reserves
and accruals, judgmental areas,
audit adjustments (whether or
not recorded), and other such
inquiries as the Committee or
the independent auditors shall
deem appropriate.
Based on such review the
Committee shall make its
recommendation to the Board as
to the inclusion of the
Company’s audited financial
statements in the Company’s
Annual Report on Form 10-KSB (or
the Annual Report to
Shareholders, if distributed
prior to the filing of the Form
10-KSB).
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Issuing annually a report to be
included in the Company’s proxy
statement as required by the
rules of the U.S. Securities and
Exchange Commission.
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Overseeing the relationship with
the independent auditors,
including discussing with the
auditors the nature and rigor of
the audit process, receiving and
reviewing audit reports and
providing the auditors full
access to the Committee (and the
Board) to report on any and all
appropriate matters.
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Discussing with a representative
of management and the
independent auditors (1) the
interim financial information
contained in the Company’s
Quarterly Report on Form 10-QSB
prior to its filing, (2) the
earnings announcement prior to
its release (if practicable),
and (3) the results of the
review of such information by
the independent auditors.
(These discussions may be
held with the Committee as a
whole or with the Audit-Chair in
person or by telephone.)
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Overseeing internal audit
activities, when applicable,
including,
discussing, with
management and the internal
auditors the internal audit
function’s organization,
objectivity, responsibilities,
plans, results, budget and
staffing.
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Discussing, with management, the
internal auditors and the
independent auditors the quality
and adequacy of and compliance
with the Company’s internal
controls.
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Discussing, with management
and/or the Company’s general
counsel any legal matters
(including the status of pending
litigation) that may have a
material impact on the Company’s
financial statements and any
material reports or inquiries
from regulatory or Governmental
agencies.
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Discussing with the management
and the independent auditors any
possible new accounting or
auditing standards that are
under consideration by FASB or a
governmental agency and the
possible impact on the Company’s
audit process and financial
statements.
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Duties
In
order to meet fully the oversight
responsibilities of the Committee, the
Committee will undertake the following
additional duties:
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Reviewing alleged fraudulent
actions or violations of law
reported by internal compliance
programs or, under the terms of
the Private Securities
Litigation Reform Act of 1995,
by the independent auditors.
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Reviewing the annual management
letter (with the independent
auditors).
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Reviewing compliance with
conflict of interest
transactions and ethical conduct
and the procedures to monitor
such compliance.
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Reviewing the audit committee
charter.
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Reviewing financial press
releases.
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Reviewing the performance of the
chief financial officer, chief
accounting officer and director
of internal audit.
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Reviewing and concurring in the
appointment, replacement,
reassignment, or dismissal of
the chief financial officer,
chief accounting officer or the
director of internal audit.
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Reviewing, confirming, and
assuring the objectivity of
internal audit.
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Reviewing policies and
procedures with respect to
expense accounts of senior
management.
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Reviewing and approving audit
fees.
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Self-assessing audit committee
performance.
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Other appropriate duties as
delegated by the Board of
Directors.
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TDYT Committees
SarOx Act 2004 (Audit
Committee Charter 06-09-0
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