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 CEDC’s 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 (principally those of the U.S. Securities and Exchange Commission, or “SEC”). The Committee provides an open avenue of communication between financial management, internal auditors, the independent or external auditors and the
Board. The Committee is authorized to: (i) consult directly with the independent auditors and such other persons as the Committee deems appropriate; (ii) review the preparations for and scope of the audit of CEDC’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 CEDC as set forth below and as the Board may assign from time to time.
 

Organization

The Committee will consist of at least three directors appointed by the Board. All of the Committee members shall meet the independence and experience requirements as required by the NASDAQ Marketplace Rules. 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 CEDC management or its subsidiaries, auditors or others to attend meetings and provide pertinent
information. The Committee shall hold private meetings with the internal and independent auditors and executive sessions.
 

Responsibilities

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 CEDC’s internal auditors are ultimately responsible for determining whether CEDC’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 CEDC.
 

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 CEDC’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 CEDC’s financial statements. This will
  include accounting policies in the United States and in Poland or any other country where CEDC conducts its operations.
• Review with the management and independent auditors the quarterly financial statements before filing of CEDC’s reports on Form 10-Q and Form 10-K, including the results of the independent auditor’s reviews of the quarterly financial statements and
  SAS/71s.

2. External Audit
 

• Responsible for the appointment or discharge, compensation and oversight of CEDC’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 CEDC by any accounting, auditing or other financial services company which exceed the scope of engagement to be provided to CEDC by the external auditor.
• Responsible for the engagement, at CEDC’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 CEDC 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 CEDC 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 to 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 CEDC’s management.

3. Internal

• Establish and maintain procedures for the receipt, retention and handling of complaints received by the issuer regarding accounting, internal accounting controls or auditing matters.
• Establish and maintain procedures allowing employees of CEDC 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 CEDC, the adequacy and effectiveness of internal accounting and financial controls of CEDC 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 CEDC’s senior financial management, principally the Chief Financial Officer.
   
• Approve any transaction between an officer or director and CEDC, 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 CEDC.

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 CEDC’s financial statements or accounting policies.
• Obtain regular updates from management and CEDC’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
  CEDC’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 CEDC’s annual proxy statement describing CEDC and its activities, as required by the SEC.

6. Funding

* The Committee will be provided with appropriate funding by CEDC, as determined by the Committee, for the payment of compensation to CEDC’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.
 

The Charter

• This Charter supersedes all previous versions of the Charter. The original Charter was approved by the CEDC Board of Directors at the meeting of November 19, 2002. This charter was approved by the Board of Directors on November 21st, 2005. This charter was subsequently amended by unanimous written consent of the Board of Directors on March 14, 2007.
• The Committee shall review the adequacy of this charter on an annual basis and recommend any appropriate changes to the Board for consideration.