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EXHIBIT 99.1
CATUITY, INC.
AUDIT COMMITTEE CHARTER
Organization
This charter governs the operations of the Audit Committee. The committee shall
review and reassess the charter at least annually and obtain the approval of the
Board of Directors. The committee shall be appointed by the Board of Directors
and shall comprise at least three directors, each of whom are independent of
management and the Company. Members of the committee shall be considered
independent if they have no relationship that may interfere with the exercise of
their independence from management and the Company. All committee members shall
be financially literate, [or shall become financially literate within a
reasonable period of time after appointment to the committee,] and at least one
member shall have accounting or related financial management expertise.
Statement of Policy
The Audit Committee shall provide assistance to the Board of Directors in
fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community, and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls and the annual independent audit of
the Company's financial statements. In so doing, it is the responsibility of the
committee to maintain free and open communication between the committee,
independent auditors and management of the Company. In discharging its oversight
role, the committee is empowered to investigate any matter brought to its
attention with full access to all books, records, facilities, and personnel of
the Company and the power to retain outside counsel, or other experts for this
purpose.
Responsibilities and Processes
The primary responsibility of the Audit Committee is to oversee the Company's
financial reporting process on behalf of the board and report the results of
their activities to the board. The Audit Committee is responsible for the duties
set forth in this charter but is not responsible for either the preparation of
the financial statements or the auditing of the financial statements. Management
has the responsibility for preparing the financial statements and implementing
internal controls and the independent accountants have the responsibility for
auditing the financial statements and monitoring the effectiveness of the
internal controls. The review of the financial statements by the Audit Committee
is not of the same quality as the audit performed by the independent
accountants. The committee in carrying out its responsibilities believes its
policies and procedures should remain flexible, in order to best react to
changing conditions and circumstances. The committee should take the appropriate
actions to set the overall corporate "tone" for quality financial reporting,
sound business risk practices, and ethical behavior.
The following shall be the principal recurring processes of the audit committee
in carrying out its oversight responsibilities. The processes are set forth as a
guide with the understanding that the committee may supplement them as
appropriate.
- The committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the Board and the Audit Committee, as representatives of
the Company's shareholders. The committee shall have the ultimate
authority and responsibility to evaluate and, where appropriate, replace
the independent auditors. The committee shall discuss with the auditors
their independence from management and the Company and the matters
included in the written disclosures required by the Independence
Standards Board. Annually, the committees shall review and recommend to
the board the selection of the Company's independent auditors, subject to
shareholders' approval, if required.
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- The committee shall discuss with the independent auditors the overall
scope and plans for their audit including the adequacy of staffing and
compensation. Also, the committee shall discuss with management and the
independent auditors the adequacy and effectiveness of the accounting and
financial controls, including the Company's system to monitor and manage
business risk, and legal and ethical compliance programs. Further, the
committee shall meet separately with the independent auditors, with and
without management present, to discuss the results of their examinations.
- The committee shall review with management and the independent auditors
the financial statements to be included in the Company's Annual Report on
Form 10-K (or the annual report to shareholders if distributed prior to
be included in the Company's Annual Report on form 10-K (or the annual
report to shareholders if distributed prior to the filing of Form 10-k)
including their judgment about the quality, not just acceptability, of
accounting principles, the reasonableness of significant judgments, and
the clarity of the disclosures in the financial statements. Also, the
committee shall discuss the results of the annual audit and any other
matters required to be communicated to the committee by the independent
auditors under generally accepted auditing standards.
