Audit Committee

Purpose and Authority

The Audit Committee (the “Committee”) is established to assist the Board of Directors (the “Board”) in fulfilling its legal and ethical compliance oversight responsibilities, including oversight of: (i) the integrity of Roust Corporation’s (“Roust”) financial reporting process; (ii) the system of internal controls over financial reporting; (iii) the audit process; and (iv) the process for monitoring compliance with all applicable laws and regulations.

The Committee provides an open avenue of communication between Roust’s financial management, internal auditors, Roust’s independent or external auditors and the Board. The Committee is authorized to: (i) consult directly with Roust’s independent auditors and such other persons as the Committee deems appropriate; (ii) review the preparations for and scope of the audit of Roust’s financial statements and review drafts of such statements; (iii) recommend any action to the Board that the Committee deems appropriate; and (iv) perform such other duties relating to the financial statements and other matters of Roust as set forth below and as the Board may assign from time to time.


The Committee will consist of at least one director appointed by the Board. Each member of the Committee shall be financially literate and at least one member shall have accounting or related financial management expertise. The Committee shall meet at least four times a year, with authority to convene additional meetings as circumstances require. The Committee may invite senior members of Roust management or its subsidiaries, auditors or others to attend meetings and provide pertinent information. The Committee shall hold private meetings with Roust’s internal and independent auditors and executive sessions.


The Committee is authorized to carry out the responsibilities set forth below. In carrying out its responsibilities and duties, the Committee must rely on the knowledge and expertise of management, the internal auditors and the independent auditors. Management and Roust’s internal auditors are ultimately responsible for determining whether Roust’s financial statements are complete, accurate and prepared in accordance with generally accepted accounting principles. The independent auditors are ultimately accountable to the Committee and the entire Board for such auditors’ review of the financial statements and controls of Roust.

  1. Financial
    • Review the annual audited financial statements with management and the independent auditors including: (i) the preparations for and scope of the independent audit of the financial statements; (ii) issues regarding accounting and auditing principles and practices; and (iii) the adequacy of internal controls that could significantly affect Roust’s financial statements.
    • Review critical accounting policies and any major accounting policy changes. The Committee must receive reports on alternative accounting treatments from the independent auditors as may be relevant to Roust’s financial statements. This will include accounting policies in the United States, Russia and in Poland or any other country where Roust conducts its operations.
    • Review with the management and independent auditors any financial statements prepared by or on behalf of Roust, including the results of the independent auditor’s reviews of such financial statements and SAS/71s.
  2. External Audit
    • Take responsibility for the appointment or discharge, compensation and oversight of Roust’s independent auditors.
    • Review the experience and qualifications of the primary partners on the independent audit team and the quality control procedures of the firm.
    • Review and approve the annual budget for audit services together with executive management.
    • Review the independent auditor’s management letter and recommendations, as well as management’s response thereto.
    • Pre-approve all audit and non-audit services performed for Roust by any accounting, auditing or other financial services company which exceed the scope of engagement to be provided to Roust by the external auditor.
    • Take responsibility for the engagement, at Roust’s expense, of outside advisors, including counsel, as the Committee determines necessary to carry out its duties.
    • Oversee the independence of the independent auditors by (i) receiving from the independent accountants, on a periodic basis, a statement delineating all relationships between the independent auditors and Roust consistent with Independence Standards Board Standard 1 and other applicable requirements; (ii) reviewing and discussing with the Board, if necessary, and the independent auditors, on a periodic basis, any disclosed relationships or services between the independent accountants and Roust or any other disclosed relationships or services that may impact the objectivity and independence of the independent auditors; and (ii) recommending, if necessary, that the Board take appropriate action to satisfy itself of the auditors’ independence. Require the independent auditors report to the Committee in writing all of the critical accounting policies to be used and all alternative treatments of financial information with GAAP that have been discussed with Roust’s management.
  3. Internal
    • Establish and maintain procedures for the receipt, retention and handling of complaints received by Roust regarding accounting, internal accounting controls or auditing matters.
    • Establish and maintain procedures allowing employees of Roust to submit any concerns regarding questionable accounting or auditing matters on a confidential, anonymous basis.
    • Periodically review the adequacy and effectiveness of accounting personnel within Roust, the adequacy and effectiveness of internal accounting and financial controls of Roust and elicit any recommendations for the improvement of such internal controls or particular areas where new or more detailed controls or procedures are desirable. Particular emphasis must be given to the adequacy of internal controls to expose any payments, transactions or procedures that might be deemed illegal or otherwise improper.
    • Review and concur with the Board’s appointment or replacement of Roust’s senior financial management, principally the Chief Financial Officer.
    • Approve any transaction between an officer or director and Roust, or any of its subsidiaries or affiliates, to ensure that such “related party” transactions have been approved by an independent body as “arm’s length” transaction(s) that benefit Roust, other than transactions that have otherwise been reviewed and approved by the Governance, Compliance and Nominating Committee.
  4. Compliance
    • Review with management and the independent auditors any correspondence with regulators or governmental agencies and any employee complaint or published reports that raise material issues regarding Roust’s financial statements or accounting policies.
    • Obtain regular updates from management and Roust’s legal counsel regarding legal matters which may have a material impact on the financial statements.
    • Conduct or authorize investigations into any relevant financial matters within the scope of the Committee’s responsibilities and duties under this Charter or as the Board may assign to the Committee from time to time. The Committee is empowered to (i) retain outside counsel, accountants or others to advise or assist the Committee in the conduct of an investigation; (ii) seek any information it requires from external parties or employees, all of whom are directed to cooperate with the Committee’s requests; (iii) meet with the management, independent auditors, or outside counsel as necessary; and (iv) meet with Roust’s financial advisors.
  5. Reporting
    • The Committee’s reporting responsibilities will include reports to the Board about the Committee’s activities, issues and related recommendations, and preparation of the report to be included in Roust’s annual report describing Roust and its activities, as required.
  6. Funding
    • The Committee will be provided with appropriate funding by Roust, as determined by the Committee, for the payment of compensation to Roust’s independent auditors and any advisors employed by the Committee, as well as ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.
  7. The Charter

    • This Charter supersedes all previous versions of the Charter. The Charter was approved by the Roust Board of Directors by unanimous written consent on July 23, 2014.
    • The Committee shall review the adequacy of this charter on an annual basis and recommend any appropriate changes to the Board for consideration.