I. Purpose.
The Audit Committee of L&L Energy, Inc. (the "Company") is appointed by the Board of Directors (the "Board") to assist the Board in :
1) monitoring the quality, reliability and integrity of the accounting policies and financial statements of the Company;
2) overseeing the Company's compliance with legal and regulatory requirements;
3) reviewing the independence, qualifications and performance of the Company's internal and external auditors,
4) overseeing the performance of the Company's internal audit function and independent auditors and,
5) preparing an audit committee report as required by the Securities and Exchange Commission (the "SEC") to be included in the
Company's annual proxy statement.
II. Committee Composition.
The Committee shall be comprised of three or more members of the Board. The members of the Committee shall satisfy all applicable
requirements then in effect of the National Association of Securities Dealers Automatic Quotation System. (the "NASDAQ"), or any stock
exchange or national securities association on which the Company's securities are listed or quoted and any other applicable regulatory
requirements, including without limitation requirements relating to director independence, financial literacy, nomination and size of the
Committee. No member of the Committee may serve on the audit committee of more than three public companies, including the Company,
unless the Board (i) determines that such simultaneous service would not impair the ability of such member to effectively serve on the
Committee and (ii) discloses such determination in the annual proxy statement.
All members of the Committee shall have a working familiarity with basic finance and accounting practices (or acquire such familiarity within
a reasonable period after his or her appointment) and at least one member must be an "audit committee financial expert" under the
requirements of the Sarbanes-Oxley Act. Committee members may enhance their familiarity with finance and accounting by participating in
educational programs conducted by the Company or by a third party.
The members of the Committee shall be appointed by the Board upon the recommendation of the Nominating and Corporate Governance
Committee and shall serve until such member's successor is duly elected and qualified or until such member's earlier resignation,
retirement, removal from office or death. The members of the Committee may be removed, with or without cause, by a majority vote of the
Board.
Chairperson must be a non-management (‘independent )member of the Company. The first Chairperson is Ms. Shirley Kiang. Unless a
Chairperson is elected by the full Board, the members of the Committee shall designate a Chairperson by majority vote of the full Board
members. The Chairperson will chair all meetings of the Committee and set the agendas for Committee meetings. The Chairman shall
establish an annual calendar with a proposed agenda of the audit, financial and other related matters to be addressed at each of the
Committee's scheduled meetings during the year. Committee members are expected to make suggestions for agenda items.
III. Delegation of Duties.
In fulfilling its responsibilities, the Committee is entitled to form and delegate any or all of its responsibilities to a subcommittee consisting of
one or more members of the Committee, when appropriate and permitted by applicable legal and regulatory requirements. Where so
permitted, a subcommittee of the Committee may exercise the powers and authority of the Committee and the Board while acting within the
scope of the powers and responsibilities delegated to it.
IV. Meetings.
The Committee shall meet as often as its members deem necessary to fulfill the Committee's responsibilities. A majority of the Committee
members shall constitute a quorum for the transaction of the Committee's business. The Committee shall act upon the vote of a majority of
its members at a duly called meeting at which a quorum is present. Any action of the Committee may be taken by a written instrument
signed by all of the members of the Committee. The Committee shall have the authority to establish other rules and procedures for notice
and conduct of its meetings consistent with the Company's bylaws and the Corporate Governance Practices and Policies.
All non-management directors that are not members of the Committee may attend meetings of the Committee but may not vote.
Additionally, the Committee may invite to its meetings any director, member of management of the Company and such other persons as it
deems appropriate in order to carry out its responsibilities. However, when necessary, the Committee may meet in executive session
without such other persons present.
V. Powers and Duties.
The following functions shall be the recurring activities of the Committee in carrying out its responsibilities outlined in Section I of this
Charter. These functions should serve as a guide with the understanding that the Committee may carry out additional or substitute
functions and adopt additional policies and procedures as may be appropriate in light of changing business, legislative, regulatory, legal
or other conditions. The Committee shall also carry out any other responsibilities and duties delegated to it by the Board from time to time
related to the purposes of the Committee outlined in Section I of this Charter.
The Committee shall have the following specific powers and duties:
With respect to the independent auditor:
1. To be directly responsible for the appointment, compensation, retention and oversight of the independent auditor (including resolution
of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing its audit
reports or performing other audit, review or attest services for the Company. The Committee is responsible for reviewing the performance
of the independent auditor and removing the independent auditor if circumstances warrant. The independent auditor shall report directly
to the Committee;
2. To review in advance, and grant any appropriate pre-approvals of (i) all auditing services to be performed by the independent auditor
and (ii) all non-audit services to be provided by the independent auditor as permitted by Section 10A of the Securities Exchange Act of
1934 (the "Exchange Act"), and, in connection therewith, to approve all fees and other terms of such engagement, provided that pre-
approval of de minimus services shall not be required to the extent provided by, and subject to the requirements of, the Exchange Act;
3. On an annual basis, to review and discuss with the independent auditor all relationships the independent auditor has with the Company
and its subsidiaries in order to evaluate the independent auditor's continued independence. The Committee shall:
(a) ensure that the independent auditor submits to the Committee on an annual basis a written statement (consistent with Independence
Standards Board Standards No. 1) delineating all relationships and services that may impair the objectivity and independence of the
independent auditor;
(b) discuss with the independent auditor any disclosed relationship or services that may impact the objectivity and independence of the
independent auditor;
(c) satisfy itself as to the independence of the independent auditor; and
(d) ensure the rotation of the audit engagement team as required by law, including consideration of whether there should be a rotation of
the firm itself;
4. At least annually, to obtain and review a report from the independent auditor describing (i) such firm's internal quality control
procedures, (ii) any material issues raised by the most recent internal quality control review or peer review of the firm, or by any inquiry or
investigation by governmental or professional authorities, within the preceding five years, respecting one or more audits carried out by the
firm, (iii) any steps taken to deal with any such issues and (iv) all relationships between the independent auditor and the Company;
5. In consultation with management, to evaluate the qualifications, performance and independence of the lead audit partner (or the lead
audit partner responsible for reviewing the audit) for the Company's independent audit firm, and to confirm that the lead audit partner has
not performed audit services for the Company for each of the five previous fiscal years;
6. To review, based on the recommendation of the independent auditor and the Company's management, the scope and plan of the work
to be done by the independent auditors with respect to each fiscal year;
With respect to financial statements and audit:
7. To meet with the independent auditor prior to the audit to review the planning and staffing of the audit, and to discuss with the
independent auditor the scope of its examinations of the books and records of the Company and its subsidiaries and the matters required
to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit;
8. To review and discuss with management and the independent auditor the Company's annual audited and quarterly un-audited financial
statements and the Company's disclosures under "Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Company's filings with the SEC and review other relevant reports or financial information submitted by the Company to
any governmental body or the public;
9. To recommend to the Company's Board whether the Company's annual audited financial statements should be included in the annual
report on Form 10-K;
10. To review the integrity of the Company's financing reporting processes, both internal and external, and discuss with management and
the independent auditor (a) major issues regarding accounting principles and financial statement presentation, including any significant
changes in the Company's selection or application of accounting principles, (b) analyses prepared by management and/or the
independent auditor setting forth significant financial reporting issues and judgments made in connection with the preparation of the
financial statements, including analyses of the effects of alternative GAAP methods on the financial statements, and the ramifications of
the use of such alternative methods, (c) other material written communications between the independent auditor and management,
including, but not limited to, the management letter and schedule of unadjusted differences, (d) the effect of regulatory and accounting
initiatives, as well as off-balance sheet structures, on the financial statements of the Company, and (e) the type and presentation of
information to be included in earnings press releases (paying particular attention to any use of "pro forma," or "adjusted" non-GAAP,
information), as well as review any financial information and earnings guidance provided to analysts and rating agencies;
11. To periodically review separately with each of management, the independent auditor and the internal auditors:
(a) any significant disagreement between management and the independent auditor in connection with the preparation of the financial
statements;
(b) any problems or difficulties encountered in the course of the audit, including any restrictions on the scope of activities or access to
required information, and management's response thereto;
(c) any changes required in the planned scope of the internal audit; and
(d) the responsibilities, budget and staffing of the Company's internal audit function;
12. To review with management and the independent auditor any correspondence with regulators or governmental agencies and any
employee complaints or published reports which raise material issues regarding the Company's financial statements or accounting policies;
13. To periodically discuss with the independent auditor, without management being present, the audit firm's judgment about the quality,
appropriateness and acceptability of the Company's accounting principles and financial statements and the completeness and accuracy of
the Company's financial statements;
14. To review the Company's earnings press releases, as well as financial information and earnings guidance provided to analysts and
rating agencies;
With respect to internal audit functions, internal controls and related matters:
15. To approve and adopt a Code of Business Ethics (the "Code") for all directors, officers and employees of the Company, and make
such changes to the Code as may be appropriate;
16. To review and discuss with management (i) the Company's major financial risk exposures and the steps management has taken to
monitor and control such exposures (including management's risk assessment and risk management policies) and (ii) the procedures that
management has established to monitor compliance with the Code;
17. To review transactions between the Company and "related persons" (as such term is defined in Item 404(a) of Regulation S-K
promulgated by the SEC) submitted by the Company's General Counsel for the Committee's consideration pursuant to the terms of the
Company's Statement of Policy With Respect to Related Person Transactions (the "Related Persons Policy"). The Committee shall
consider and have the authority to approve, amend, ratify, terminate or rescind such transactions at the next Committee meeting, provided
that, in those instances specified in the Relates Persons Policy, the Chairman shall consider and have the authority to approve such
transactions between Committee meetings. The Committee delegates such authority to the Chairman, and the Chairman shall report to the
Committee at the next Committee meeting any approval under the Related Persons Policy pursuant to the delegated authority;
18. To review and discuss with management all material off-balance sheet transactions, arrangements, obligations (including contingent
obligations) and other relationships of the Company with unconsolidated entities or other persons that may have a material current or
future effect on the financial condition, changes in financial condition, results of operations, liquidity, capital resources or significant
components of revenues or expenses;
19. To periodically review, in consultation with the independent auditor and management, (i) the independent auditor's attestation and
report on management's internal control report, from the time that such reports are prepared, (ii) the adequacy of the Company's internal
controls and any special audit steps adopted in light of material control deficiencies, (iii) procedures and policies of the Company designed
to ensure compliance with applicable laws and regulations and (iv) the responsibilities, budget and staffing needs for the internal audit
function;
20. To review with management and the independent auditor the sufficiency and quality of the internal auditor staff and other financial and
accounting personnel of the Company and its subsidiaries, including advising management and the Board regarding the selection and
removal of the manager of the internal audit function;
21. To establish procedures for (i) the receipt, retention and treatment of complaints received by the Company and its subsidiaries
regarding accounting, internal accounting or auditing matters and (ii) confidential, anonymous submission by employees of the Company
of concerns regarding questionable accounting or auditing matters;
Others:
22. To review, periodically, with the Company's counsel, any legal matter that could have a significant impact on the Company's financial
statements;
23. To establish the policy for the Company's hiring of employees or former employees of the independent auditor who were engaged on
the Company's account;
24. To report regularly to the Board with respect to any issues that arise with respect to the quality or integrity of the Company's financial
statements, the Company's compliance with legal or regulatory requirements, the performance and independence of the Company's
independent auditors or the performance of the internal audit function;
25. To maintain minutes or other records of meetings and activities of the Committee and to report to the Board following meetings of or
actions taken by the Committee;
26. To produce an annual audit committee report and any other Committee reports required to be included in the Company's annual proxy
statement, in accordance with applicable rules and regulations promulgated by the SEC, the NYSE and other regulatory bodies;
27. To conduct or authorize investigations into any matters within the Committee's purpose and powers;
28. To review and reassess the powers of the Committee and the adequacy of this Charter periodically and recommend any proposed
changes to the Board for approval;
29. To conduct an annual performance review and evaluation of the Committee; and
30. To consider such other matters in relation to the financial affairs of the Company, its books and records, and its internal and external
audits as the Committee or the Board may, in its discretion, determine to be advisable.
VI. Committee Resources.
The Committee, in discharging its oversight role, is empowered to study or investigate any matter of interest or concern that the
Committee deems appropriate. The Committee shall have the authority to retain special legal, accounting or other advisers to advise the
Committee, including without limitation the sole authority to determine the fees payable and other terms of retention of the independent
auditor for the purpose of rendering or issuing the annual audit reports and any independent legal, accounting or other advisers retained
to advise the Committee. The Company shall provide for appropriate funding for (i) compensation to the Company's independent auditors
for the purpose of preparing or issuing audit reports or performing other work, (ii) compensation to any independent legal, accounting or
other advisers employed by the Committee and (iii) ordinary administrative expenses of the Committee that are necessary or appropriate
in carrying out its duties.
VII. Understanding as to the Committee's Role.
Management of the Company is responsible for the day-to-day operation of the Company's business. In addition, the independent
auditors and management have the fundamental responsibility for the Company's financial statements and disclosures. As a result, the
Company's officers and employees and other persons who may be engaged by the Committee may have more time, knowledge and
detailed information about the Company than do the Committee members. The Committee will review information, opinions, reports or
statements presented to the Committee by the Company's officers or employees or other persons as to matters the Committee members
reasonably believe are within such other person's professional or expert competence and who has been selected with reasonable care by
or on behalf of the Company. While the Committee has the responsibilities and powers set forth in this charter, each member of the
Committee, in the performance of his or her duties, will be entitled to rely in good faith upon reports presented to the Committee by these
experts. The Committee is not responsible for certifying the Company's financial statements or the auditor's report. Accordingly, the
Committee's role does not provide any special assurances with regard to matters that are outside the Committee's area of expertise or
that are the traditional responsibility of management and the auditors.
Approved as of July 10, 2008
The Audit Committee of L&L Energy, Inc. (the "Company") is appointed by the Board of Directors (the "Board") to assist the Board in :
1) monitoring the quality, reliability and integrity of the accounting policies and financial statements of the Company;
2) overseeing the Company's compliance with legal and regulatory requirements;
3) reviewing the independence, qualifications and performance of the Company's internal and external auditors,
4) overseeing the performance of the Company's internal audit function and independent auditors and,
5) preparing an audit committee report as required by the Securities and Exchange Commission (the "SEC") to be included in the
Company's annual proxy statement.
II. Committee Composition.
The Committee shall be comprised of three or more members of the Board. The members of the Committee shall satisfy all applicable
requirements then in effect of the National Association of Securities Dealers Automatic Quotation System. (the "NASDAQ"), or any stock
exchange or national securities association on which the Company's securities are listed or quoted and any other applicable regulatory
requirements, including without limitation requirements relating to director independence, financial literacy, nomination and size of the
Committee. No member of the Committee may serve on the audit committee of more than three public companies, including the Company,
unless the Board (i) determines that such simultaneous service would not impair the ability of such member to effectively serve on the
Committee and (ii) discloses such determination in the annual proxy statement.
All members of the Committee shall have a working familiarity with basic finance and accounting practices (or acquire such familiarity within
a reasonable period after his or her appointment) and at least one member must be an "audit committee financial expert" under the
requirements of the Sarbanes-Oxley Act. Committee members may enhance their familiarity with finance and accounting by participating in
educational programs conducted by the Company or by a third party.
The members of the Committee shall be appointed by the Board upon the recommendation of the Nominating and Corporate Governance
Committee and shall serve until such member's successor is duly elected and qualified or until such member's earlier resignation,
retirement, removal from office or death. The members of the Committee may be removed, with or without cause, by a majority vote of the
Board.
Chairperson must be a non-management (‘independent )member of the Company. The first Chairperson is Ms. Shirley Kiang. Unless a
Chairperson is elected by the full Board, the members of the Committee shall designate a Chairperson by majority vote of the full Board
members. The Chairperson will chair all meetings of the Committee and set the agendas for Committee meetings. The Chairman shall
establish an annual calendar with a proposed agenda of the audit, financial and other related matters to be addressed at each of the
Committee's scheduled meetings during the year. Committee members are expected to make suggestions for agenda items.
III. Delegation of Duties.
In fulfilling its responsibilities, the Committee is entitled to form and delegate any or all of its responsibilities to a subcommittee consisting of
one or more members of the Committee, when appropriate and permitted by applicable legal and regulatory requirements. Where so
permitted, a subcommittee of the Committee may exercise the powers and authority of the Committee and the Board while acting within the
scope of the powers and responsibilities delegated to it.
IV. Meetings.
The Committee shall meet as often as its members deem necessary to fulfill the Committee's responsibilities. A majority of the Committee
members shall constitute a quorum for the transaction of the Committee's business. The Committee shall act upon the vote of a majority of
its members at a duly called meeting at which a quorum is present. Any action of the Committee may be taken by a written instrument
signed by all of the members of the Committee. The Committee shall have the authority to establish other rules and procedures for notice
and conduct of its meetings consistent with the Company's bylaws and the Corporate Governance Practices and Policies.
All non-management directors that are not members of the Committee may attend meetings of the Committee but may not vote.
Additionally, the Committee may invite to its meetings any director, member of management of the Company and such other persons as it
deems appropriate in order to carry out its responsibilities. However, when necessary, the Committee may meet in executive session
without such other persons present.
V. Powers and Duties.
The following functions shall be the recurring activities of the Committee in carrying out its responsibilities outlined in Section I of this
Charter. These functions should serve as a guide with the understanding that the Committee may carry out additional or substitute
functions and adopt additional policies and procedures as may be appropriate in light of changing business, legislative, regulatory, legal
or other conditions. The Committee shall also carry out any other responsibilities and duties delegated to it by the Board from time to time
related to the purposes of the Committee outlined in Section I of this Charter.
The Committee shall have the following specific powers and duties:
With respect to the independent auditor:
1. To be directly responsible for the appointment, compensation, retention and oversight of the independent auditor (including resolution
of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing its audit
reports or performing other audit, review or attest services for the Company. The Committee is responsible for reviewing the performance
of the independent auditor and removing the independent auditor if circumstances warrant. The independent auditor shall report directly
to the Committee;
2. To review in advance, and grant any appropriate pre-approvals of (i) all auditing services to be performed by the independent auditor
and (ii) all non-audit services to be provided by the independent auditor as permitted by Section 10A of the Securities Exchange Act of
1934 (the "Exchange Act"), and, in connection therewith, to approve all fees and other terms of such engagement, provided that pre-
approval of de minimus services shall not be required to the extent provided by, and subject to the requirements of, the Exchange Act;
3. On an annual basis, to review and discuss with the independent auditor all relationships the independent auditor has with the Company
and its subsidiaries in order to evaluate the independent auditor's continued independence. The Committee shall:
(a) ensure that the independent auditor submits to the Committee on an annual basis a written statement (consistent with Independence
Standards Board Standards No. 1) delineating all relationships and services that may impair the objectivity and independence of the
independent auditor;
(b) discuss with the independent auditor any disclosed relationship or services that may impact the objectivity and independence of the
independent auditor;
(c) satisfy itself as to the independence of the independent auditor; and
(d) ensure the rotation of the audit engagement team as required by law, including consideration of whether there should be a rotation of
the firm itself;
4. At least annually, to obtain and review a report from the independent auditor describing (i) such firm's internal quality control
procedures, (ii) any material issues raised by the most recent internal quality control review or peer review of the firm, or by any inquiry or
investigation by governmental or professional authorities, within the preceding five years, respecting one or more audits carried out by the
firm, (iii) any steps taken to deal with any such issues and (iv) all relationships between the independent auditor and the Company;
5. In consultation with management, to evaluate the qualifications, performance and independence of the lead audit partner (or the lead
audit partner responsible for reviewing the audit) for the Company's independent audit firm, and to confirm that the lead audit partner has
not performed audit services for the Company for each of the five previous fiscal years;
6. To review, based on the recommendation of the independent auditor and the Company's management, the scope and plan of the work
to be done by the independent auditors with respect to each fiscal year;
With respect to financial statements and audit:
7. To meet with the independent auditor prior to the audit to review the planning and staffing of the audit, and to discuss with the
independent auditor the scope of its examinations of the books and records of the Company and its subsidiaries and the matters required
to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit;
8. To review and discuss with management and the independent auditor the Company's annual audited and quarterly un-audited financial
statements and the Company's disclosures under "Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Company's filings with the SEC and review other relevant reports or financial information submitted by the Company to
any governmental body or the public;
9. To recommend to the Company's Board whether the Company's annual audited financial statements should be included in the annual
report on Form 10-K;
10. To review the integrity of the Company's financing reporting processes, both internal and external, and discuss with management and
the independent auditor (a) major issues regarding accounting principles and financial statement presentation, including any significant
changes in the Company's selection or application of accounting principles, (b) analyses prepared by management and/or the
independent auditor setting forth significant financial reporting issues and judgments made in connection with the preparation of the
financial statements, including analyses of the effects of alternative GAAP methods on the financial statements, and the ramifications of
the use of such alternative methods, (c) other material written communications between the independent auditor and management,
including, but not limited to, the management letter and schedule of unadjusted differences, (d) the effect of regulatory and accounting
initiatives, as well as off-balance sheet structures, on the financial statements of the Company, and (e) the type and presentation of
information to be included in earnings press releases (paying particular attention to any use of "pro forma," or "adjusted" non-GAAP,
information), as well as review any financial information and earnings guidance provided to analysts and rating agencies;
11. To periodically review separately with each of management, the independent auditor and the internal auditors:
(a) any significant disagreement between management and the independent auditor in connection with the preparation of the financial
statements;
(b) any problems or difficulties encountered in the course of the audit, including any restrictions on the scope of activities or access to
required information, and management's response thereto;
(c) any changes required in the planned scope of the internal audit; and
(d) the responsibilities, budget and staffing of the Company's internal audit function;
12. To review with management and the independent auditor any correspondence with regulators or governmental agencies and any
employee complaints or published reports which raise material issues regarding the Company's financial statements or accounting policies;
13. To periodically discuss with the independent auditor, without management being present, the audit firm's judgment about the quality,
appropriateness and acceptability of the Company's accounting principles and financial statements and the completeness and accuracy of
the Company's financial statements;
14. To review the Company's earnings press releases, as well as financial information and earnings guidance provided to analysts and
rating agencies;
With respect to internal audit functions, internal controls and related matters:
15. To approve and adopt a Code of Business Ethics (the "Code") for all directors, officers and employees of the Company, and make
such changes to the Code as may be appropriate;
16. To review and discuss with management (i) the Company's major financial risk exposures and the steps management has taken to
monitor and control such exposures (including management's risk assessment and risk management policies) and (ii) the procedures that
management has established to monitor compliance with the Code;
17. To review transactions between the Company and "related persons" (as such term is defined in Item 404(a) of Regulation S-K
promulgated by the SEC) submitted by the Company's General Counsel for the Committee's consideration pursuant to the terms of the
Company's Statement of Policy With Respect to Related Person Transactions (the "Related Persons Policy"). The Committee shall
consider and have the authority to approve, amend, ratify, terminate or rescind such transactions at the next Committee meeting, provided
that, in those instances specified in the Relates Persons Policy, the Chairman shall consider and have the authority to approve such
transactions between Committee meetings. The Committee delegates such authority to the Chairman, and the Chairman shall report to the
Committee at the next Committee meeting any approval under the Related Persons Policy pursuant to the delegated authority;
18. To review and discuss with management all material off-balance sheet transactions, arrangements, obligations (including contingent
obligations) and other relationships of the Company with unconsolidated entities or other persons that may have a material current or
future effect on the financial condition, changes in financial condition, results of operations, liquidity, capital resources or significant
components of revenues or expenses;
19. To periodically review, in consultation with the independent auditor and management, (i) the independent auditor's attestation and
report on management's internal control report, from the time that such reports are prepared, (ii) the adequacy of the Company's internal
controls and any special audit steps adopted in light of material control deficiencies, (iii) procedures and policies of the Company designed
to ensure compliance with applicable laws and regulations and (iv) the responsibilities, budget and staffing needs for the internal audit
function;
20. To review with management and the independent auditor the sufficiency and quality of the internal auditor staff and other financial and
accounting personnel of the Company and its subsidiaries, including advising management and the Board regarding the selection and
removal of the manager of the internal audit function;
21. To establish procedures for (i) the receipt, retention and treatment of complaints received by the Company and its subsidiaries
regarding accounting, internal accounting or auditing matters and (ii) confidential, anonymous submission by employees of the Company
of concerns regarding questionable accounting or auditing matters;
Others:
22. To review, periodically, with the Company's counsel, any legal matter that could have a significant impact on the Company's financial
statements;
23. To establish the policy for the Company's hiring of employees or former employees of the independent auditor who were engaged on
the Company's account;
24. To report regularly to the Board with respect to any issues that arise with respect to the quality or integrity of the Company's financial
statements, the Company's compliance with legal or regulatory requirements, the performance and independence of the Company's
independent auditors or the performance of the internal audit function;
25. To maintain minutes or other records of meetings and activities of the Committee and to report to the Board following meetings of or
actions taken by the Committee;
26. To produce an annual audit committee report and any other Committee reports required to be included in the Company's annual proxy
statement, in accordance with applicable rules and regulations promulgated by the SEC, the NYSE and other regulatory bodies;
27. To conduct or authorize investigations into any matters within the Committee's purpose and powers;
28. To review and reassess the powers of the Committee and the adequacy of this Charter periodically and recommend any proposed
changes to the Board for approval;
29. To conduct an annual performance review and evaluation of the Committee; and
30. To consider such other matters in relation to the financial affairs of the Company, its books and records, and its internal and external
audits as the Committee or the Board may, in its discretion, determine to be advisable.
VI. Committee Resources.
The Committee, in discharging its oversight role, is empowered to study or investigate any matter of interest or concern that the
Committee deems appropriate. The Committee shall have the authority to retain special legal, accounting or other advisers to advise the
Committee, including without limitation the sole authority to determine the fees payable and other terms of retention of the independent
auditor for the purpose of rendering or issuing the annual audit reports and any independent legal, accounting or other advisers retained
to advise the Committee. The Company shall provide for appropriate funding for (i) compensation to the Company's independent auditors
for the purpose of preparing or issuing audit reports or performing other work, (ii) compensation to any independent legal, accounting or
other advisers employed by the Committee and (iii) ordinary administrative expenses of the Committee that are necessary or appropriate
in carrying out its duties.
VII. Understanding as to the Committee's Role.
Management of the Company is responsible for the day-to-day operation of the Company's business. In addition, the independent
auditors and management have the fundamental responsibility for the Company's financial statements and disclosures. As a result, the
Company's officers and employees and other persons who may be engaged by the Committee may have more time, knowledge and
detailed information about the Company than do the Committee members. The Committee will review information, opinions, reports or
statements presented to the Committee by the Company's officers or employees or other persons as to matters the Committee members
reasonably believe are within such other person's professional or expert competence and who has been selected with reasonable care by
or on behalf of the Company. While the Committee has the responsibilities and powers set forth in this charter, each member of the
Committee, in the performance of his or her duties, will be entitled to rely in good faith upon reports presented to the Committee by these
experts. The Committee is not responsible for certifying the Company's financial statements or the auditor's report. Accordingly, the
Committee's role does not provide any special assurances with regard to matters that are outside the Committee's area of expertise or
that are the traditional responsibility of management and the auditors.
Approved as of July 10, 2008
Charter-Audit Committee
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| L&L ENERGY, INC. |