ex10-1.htm


    Exhibit
10.1

    


     

    AuraSource,
Inc.

     

     

    Charter

     

    of
the

    Audit
Committee of the Board of Directors

    


    The Board
of Directors (the “Board”) of AuraSource, Inc. (the “Company”), hereby confirms
the role of the Audit Committee (the “Committee”) to advise the Board with
respect to fulfilling its oversight responsibilities relating to corporate
accounting, financial reporting practices, and the quality and integrity of the
financial reports of the Company.

     

    
      	
              I.  

            	
              PURPOSE

            


    

    


    The
primary function of the Audit Committee is to assist the Board of Directors in
fulfilling its oversight responsibilities relating to corporate accounting,
financial reporting practices, and the quality and integrity of the financial
reports of the Company by:

    


    
      	
              1.  

            	
              reviewing
      the financial reports and other financial and related information provided
      by the Company to the Securities and Exchange Commission or the
      public;

            


    

    


    
      	
              2.  

            	
              reviewing
      the Company’s system of internal controls regarding finance, accounting,
      legal compliance and code of business conduct that management and the
      Board have established;

            


    

    


    
      	
              3.  

            	
              reviewing
      the Company’s auditing, accounting and financial reporting
      processes;

            


    

    


    
      	
              4.  

            	
              reviewing
      and appraising with management the audit efforts of the Company’s
      independent accountants; and

            


    

    


    
      	
              5.  

            	
              providing
      an open avenue of communication among the independent accountants,
      financial and senior management, the internal auditing department and the
      Board of Directors.

            


    

    


    The Audit
Committee will primarily fulfill these responsibilities by carrying out the
activities enumerated in Section IV of the Charter.

    


    
      	
              II.  

            	
              COMPOSITION

            


    

    


    The Audit
Committee shall be comprised of two or more directors as determined by the
Board, one of whom shall be selected by the Board as Chairman.

     

    
      	
              III.  

            	
              MEETINGS

            


    

    


    The Audit
Committee shall meet at least four times annually, or more
frequently  as circumstances dictate.  As part of its job to
foster open communication, the Audit Committee should meet at least annually
with management, the internal auditing department and the independent
accountants separately to discuss any matters that the Audit Committee or each
of these groups believe should be discussed privately.

    


    
      	
              IV.  

            	
              RESPONSIBILITIES
      AND DUTIES

            


    

    


    To
fulfill its responsibilities and duties the Audit Committee shall:

    


    Document/Reports
Review

    


    
      	
              1.  

            	
              Review
      and reassess, at least annually, the adequacy of this
      Charter.  Make recommendations to the Board, as conditions
      dictate, to update this Charter.

            


    

    


    
      	
              2.  

            	
              Review
      with management and independent accountants the Company’s annual financial
      statements included in the Form 10-KSB prior to its filing and prior to
      the release of earnings, including major issues regarding accounting and
      auditing principles and practices as well as the adequacy of the Company’s
      internal controls that could significantly affect the Company’s financial
      statements.  Discuss with the independent accountants the
      matters required to be discussed by Statement of Auditing Standards No.
      61, as amended.

            


    

    


    
      	
              3.  

            	
              Review
      with management and the independent accountants the Company’s quarterly
      financial statements included in the Form 10-QSB prior to its filing and
      prior to the release of earnings.  The Chairperson of the Audit
      Committee may represent the entire Audit Committee for purposes of this
      review.

            


    

    


    
      	
              4.  

            	
              Review
      with the independent accountants the recommendations included in their
      management letter, if any, and their observations regarding the Company’s
      financial and accounting procedures.  On the basis of this
      review make recommendations to the Board for any changes that seem
      appropriate.  Review any changes required in the planned scope
      of the audit and the internal auditing department’s responsibilities,
      budget and staffing.

            


    

    


    Independent
Accountants

    


    
      	
              5.  

            	
              Review
      the performance of the independent accountants and make all determinations
      regarding the appointment or termination of the independent
      accountants.  The Committee has the ultimate authority and
      responsibility to select, evaluate and, where appropriate, replace the
      independent accountants.  The independent accountants are
      ultimately accountable and shall report directly to the Committee for such
      accountant’s review of the financial statements and internal controls for
      the Company.  The fees to be paid to the independent accountants
      for auditing and non-auditing activities shall be reviewed and approved by
      the Committee.  On an annual basis, the Committee shall review
      and discuss with the accountants all significant relationships that the
      accountants have with the Company to determine the accountants’
      independence.

            


    

    


    
      	
              6.  

            	
              Oversee
      independence of the accountants by:

            


    

     

    
      	
              ·  

            	
              receiving
      from the accountants, on a periodic basis, a formal written statement
      delineating all relationships between the accountants and the Company
      consistent with Independence Standards Board Standard
  1;

            


    

     

    
      	
              ·  

            	
              reviewing,
      and discussing, with the Board, if necessary, and the accountants, on a
      periodic basis, any disclosed relationships or services between the
      accountants and the Company or any other disclosed relationships or
      services that may impact the objectivity and independence of the
      accountants; and

            


    

     

    
      	
              ·  

            	
              take
      necessary action to satisfy itself of the accountants’
      independence.

            


    

     

    
      	
              7.  

            	
              Pre-approve
      all auditing and non-auditing services to be provided by the accountants
      to the Company.  Non-auditing services need not be pre-approved
      if:

            


    

     

    
      	
              ·  

            	
              amounts
      for all non-audit services aggregate less than five percent of the amounts
      paid for audit services during the fiscal year;
  and

            


    

     

    
      	
              ·  

            	
              the
      non-audit services were not believed to be non-audit services at the time
      of engaging the services; and

            


    

     

    
      	
              ·  

            	
              such
      non-audit services are brought to the attention of the Committee and
      approved by the Committee prior to completion of the audit for the fiscal
      year; and

            


    

     

    Financial Reporting
Process

     

    
      	
              8.  

            	
              In
      consultation with management and the independent accountants review the
      integrity of the Company’s financial reporting processes, both internal
      and external.

            


    

     

    
      	
              9.  

            	
              Establish
      regular systems of reporting to the Audit Committee by management and the
      independent accountants regarding any significant financial reporting
      issues and judgments made in connection with management’s preparation of
      the financial statements and any significant difficulties encountered by
      the independent accountants during the course of its review or audit,
      including any restrictions on the scope of work or access to required
      information.

            


    

     

    
      	
              10.  

            	
              Review
      and resolve any disagreement among management and the independent
      accountants in connection with the preparation of the financial
      statements.

            


    

     

    
      	
              11.  

            	
              Consider
      and approve, if appropriate, major changes to the Company’s auditing and
      accounting principles and practices as suggested by the independent
      accountants or management.  Review with the independent
      accountants and management the extent to which changes or improvements in
      financial or accounting practices, as approved by the Audit Committee,
      have been implemented.

            


    

     

    
      	
              12.  

            	
              Meet
      with the independent accountants prior to the annual audit to review the
      planning and staffing of the audit.

            


    

     

    
      	
              13.  

            	
              Meet
      periodically with management to review the Company’s major financial risk
      exposures and steps management has taken to monitor and control such
      exposures.

            


    

     

    Legal
Compliance/General

     

    
      	
              14.  

            	
              Review,
      at least on an annual basis, with the Company’s counsel any legal matter
      that could have a significant impact on the Company’s financial
      statements, the Company’s compliance policies, and any material reports or
      inquiries received from regulators or governmental
    agencies.

            


    

     

    
      	
              15.  

            	
              Establish
      procedures for the receipt, retention and treatment of complaints received
      by the Company regarding accounting, internal accounting controls, or
      auditing matters, including means for confidential and anonymous
      submission by employees of the Company of concerns regarding questionable
      accounting or auditing matters.

            


    

     

    
      	
              16.  

            	
              Advise
      the Board with respect to the Company’s policies and procedures regarding
      compliance with applicable laws and
regulations.

            


    

     

    
      	
              17.  

            	
              Review
      the appointment and replacement of internal auditing personnel, review
      reports to management prepared by the internal auditing department and
      management’ s responses, and review cooperation of the internal auditing
      department with the independent
auditors.

            


    

     

    
      	
              18.  

            	
              Retain
      independent counsel and other advisers the Committee deems necessary to
      carry out its duties.

            


    

     

    
      	
              19.  

            	
              Report
      through its Chairperson to the Board following meetings of the Audit
      Committee.

            


    

     

    
      	
              20.  

            	
              Maintain
      minutes or other records of meeting and activities of the Audit
      Committee.

            


    

     

    Following
receipt of any reports of the Committee based upon reviews undertaken pursuant
to the provisions hereof and recommendations in connection therewith, the Board
may accept, reject or modify such reports or recommendations.  Nothing
herein contained shall prevent the Board from taking action with respect to the
matters described herein without such matters having first been considered by
the Committee.

     

    While the
Audit Committee has the responsibilities and powers set forth in this Charter,
it is not the duty of the Audit Committee to plan or conduct audits or to
determine that the Company’s financial statements are complete and accurate and
are in accordance with generally accepted accounting principles.  This
is the responsibility of management and the independent
accountants.