Audit Committee

BALDWIN TECHNOLOGY COMPANY, INC.

CHARTER OF

THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

 1.   Purpose

The Audit Committee (the "Committee") of the Board of Directors (the "Board") of Baldwin Technology Company, Inc. (the "Company") assists the Board in ensuring that a proper system of accounting, internal controls and reporting practices are maintained by the Company, as well as the quality and integrity of the Company's financial statements.  In performing its duties, the Committee will also assist the Board in ensuring that the Company's financial statements are in compliance with the rules, regulations, policies, and procedures required by the Sarbanes-Oxley Act, any exchange on which shares of the common stock of the Company are traded and the U.S. Securities and Exchange Commission ("SEC"). The Committee will maintain effective working relationships with the Board, the Company's management and the Company's independent public accounting firm ("external auditors"), who will report directly to the Committee, and not to management.
 

2.  Membership

The Committee will consist of at least three members, including a Chairperson, all of whom will be selected by, and who will serve at the pleasure of, the Board.  All members of the Committee must be "independent directors" as defined by rules promulgated by the SEC and any exchange on which shares of the common stock of the Company are traded.

Notwithstanding the foregoing, one director who satisfies the requirements of the SEC rules and is neither a current employee nor an immediate family member of a current employee, but who is not independent as defined by the rules of any exchange on which shares of the common stock of the company are traded, may be appointed to the Committee, if the Board, under exceptional and limited circumstances, determines that membership is required and in the best interests of the Company and its stockholders.  In such case, the Board must disclose in the Company's next annual proxy statement the nature of the relationship and the reasons for the determination.

Each member of the Committee must be able to read and understand fundamental financial statements. In addition, at least one member of the Committee must have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual's financial sophistication.

The Board may designate one or more Directors as alternative members of the Committee, who may replace any absent or disqualified member or members at any meetings of the Committee.  However, no person may be made a member or alternative member of the Committee if his or her service on the Committee would violate any restriction on service imposed by any rule of the SEC or any exchange on which shares of the common stock of the Company are traded.
 

3.   Meetings

The Committee will meet at least four times each year and more frequently if circumstances warrant, including immediately prior to each quarterly and year-end earnings release in order to review such earnings release.  The Committee may ask members of management, the internal auditor, the external auditors or others whose advice and counsel are relevant to the issues then being considered by the Committee, to attend any meetings and to provide such pertinent information as the Committee may request.  The Committee will keep written minutes of its meetings, which minutes will be recorded or filed with the books and records of the Company.  The Committee will submit the minutes of its meetings to, or discuss the matters deliberated at each meeting with, the Board.
 

4.  Suggested Topic Rotation

Meetings will include a discussion of each of the following topics at least once per fiscal year on a schedule determined by the Committee. Generally, the schedule of topics will follow, but not be limited to following the suggested timetable set forth below, and will be fixed for any fiscal year and reviewed for modification each June.

5.   Committee Responsibilities

The Committee will have the following responsibilities:

 a)   Appoint an independent public accounting firm to serve as auditors of the Company, giving consideration to the firm's independence and effectiveness, and approve the associated compensation to be paid to the independent auditors.

 b)   Evaluate periodically the independent public accounting firm serving as auditors of the Company and, where appropriate, replace such independent public accounting firm as auditors of the Company.

 c)   Review significant accounting and reporting issues, including recent professional and regulatory pronouncements, and understand their impact on the financial statements.

d)   Meet with management and the external auditors to review and discuss the scope and results of each annual audit of the financial statements.

e)  Consider and review with management, the internal auditor and the external auditors the adequacy of the Company's internal controls, including, any related significant findings and recommendations of the internal and external auditors and any changes implemented in light of significant control deficiencies or material weaknesses.  The Committee shall also review and discuss with management, the internal auditor and the external auditors (i) the annual report prepared by management with respect to the Company's internal control over financial reporting, and (ii) the attestation report pertaining thereto to be delivered by the external auditors.  The Committee shall also obtain from the external auditors periodic assurances that the external auditors are complying with all provisions of applicable law which require the external auditors, if they detect or become aware of any illegal act, to assure that the Committee is adequately informed and to provide a report if the external auditors have reached specified conclusions with respect to such illegal acts.

f)    Review and discuss with management and the internal auditor the scope and nature of the annual internal audit plan.

g)   Consider and review with management and the internal auditor:

     a)  Significant findings and recommendations during the year and management's responses thereto, including the timetable for implementation of the recommendations to correct weaknesses in internal control.

     b)  Any changes to the planned scope of the annual internal audit plan.

     c)  The internal audit department's charter, budget, staffing and qualifications.

h)   Approve the appointment, replacement or reassignment of the internal auditor.

i)    Review and discuss with management and the external auditors (i) the financial statements contained in the annual report to stockholders to be filed with the SEC, (ii) significant accounting policies and changes in accounting principles,  (iii) the results of the external auditor's audit of the financial statements and the report thereon, including matters required to be discussed by Statement of Auditing Standards No. 61, and (iv) compliance with the rules, regulations, policies and procedures of the Sarbanes-Oxley Act, any exchange on which shares of the common stock of the Company are traded and the SEC.

j)   Recommend to the Board, based on its review with management and the external auditors, the inclusion of audited financial statements in the Company's Annual Report on Form 10-K for the last fiscal year for filing with the SEC.

k)   Meet with the external auditors and financial management to review interim financial statements to be filed with the SEC and the results of the interim review by the external auditors.  The Chairman of the Committee, or a member of the Committee designated by the Chairman, may represent the entire Committee for purposes of this review.

l)   Receive the written disclosures and the letter from the external auditors required by Independence Standards Board Standard No. 1 and discuss with the external auditors their independence.

m)   Provide a report for inclusion in the annual proxy statement to stockholders.

n)   Perform such other duties as the Board may assign to the Committee.

The Committee will review this Charter not less often than annually and will recommend to the Board such changes therein as the Committee deems appropriate.

6.       Investigations and Studies

The Committee may conduct or authorize investigations into or studies of matters within the Committee's scope of responsibilities as described above, and shall have the authority to retain, at the expense of the Company, independent counsel or other consultants necessary to assist in any such investigation or study.

7.      Auditing and Accounting Complaints

The Committee shall establish and oversee procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, auditing, or other matters, and the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting, auditing or other matters.

8.      Pre-Approval of Non-Audit Services by External Auditors

The Committee shall pre-approve all auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company (or its subsidiaries) by the external auditors, subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the Committee prior to the completion of the audit. 

9.      CEO/CFO Certifications

The Committee shall understand and consider the methods and procedures undertaken by the Company's Chief Executive Officer and Chief Financial Officer during their certification processes for the Company's periodic reports, including those related to the internal control environment.  These  certification processes include (a) determining annually that the Company's system of internal controls over financial reporting is functioning effectively (annual certification included in the 10-K), (b) determining whether there have been material changes to the Company's system of internal controls over financial reporting for the preceding quarter (quarterly certification included in the 10-Q for all quarters other than the fourth quarter and the 10-K for the fourth quarter), (c) determining that any material weaknesses in the design or operation of internal controls over financial reporting have been disclosed in the financial statements, (d) determining that any significant deficiencies in the design or operation of internal controls over financial reporting have been disclosed to the External Auditors and the Committee; and (e) determining whether there has been any fraud, whether or not material, that involves management or other employees who have a role in the Company's internal controls over financial reporting and that such fraud has been disclosed to the External Auditors and the Committee.

10.   Related Party Transactions

The Committee shall review and provide appropriate oversight with respect to any "related-party" transactions (as defined in SEC regulations) involving the Company and officers, directors or stockholders beneficially owning more than ten (10%) percent of any class of equity security of the Company.

                                                                                                            Revised June 2010