1.1 The Committee shall be appointed by the Board from amongst the Non-Executive Directors of the Company and shall consist of not less than two members for so long as there are two or more Non-Executive Directors. At least one member of the Audit Committee shall have recent relevant financial knowledge. A quorum shall be two members for so long as there are two or more Non-Executive Directors. The Board will determine which Directors are independent Non-Executive Directors.
1.2 A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.
1.3 The Chair of the Committee shall be an independent Non-Executive Director and shall be appointed by the Board. The Chair of the Audit Committee cannot be the Chairman of the Board.
1.4 At least once a year the Committee shall meet with the external auditors without executive Board members present.
1.5 The Committee may invite such other Directors to attend its meetings (except for the meeting referred to in paragraph 1.4 above) as it considers necessary for its effective operation - but the invitees have no right of attendance.
1.6 The Company Secretary or their nominee will act as the Secretary of the Audit Committee subject to exclusion from the meeting referred to at paragraph 1.4 above, if also an Executive Director of the Company.
2. Frequency of Meetings
2.1 A meeting shall be held at least twice a year in conjunction with the Company's external auditors at the planning stage prior to the annual audit and post audit at the reporting stages and at any other time.
3. Notice of Meetings
3.1 Meetings of the Committee shall be summoned by the Secretary of the Committee at the request of any member thereof or at the request of the Company's auditors.
3.2 Unless otherwise agreed, Notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the Committee, any other person required to attend and all other Non-Executive Directors, no fewer than 5 working days prior to the date of the meeting.
4. Minutes of Meetings
4.1 The Secretary shall minute the proceedings and resolutions of all meetings of the Committee, including recording the names of those present and in attendance.
4.2 The Secretary should ascertain, at the beginning of each meeting, the existence of any conflicts of interest and Minute them accordingly.
4.3 Minutes of Committee meetings shall be circulated promptly to all members of the Committee Board.
5. Annual General Meeting
5.1 The Chair of the Committee shall attend the Annual General Meeting prepared to respond to any shareholder questions on the Committee's activities.
6.1 The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee.
6.2 The Committee is authorised by the Board to obtain outside legal or other independent professional advice at the Company's expense and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary.
The duties of the Audit Committee are:
7.1 To keep under review the effectiveness of the Company's financial reporting and internal control policies and procedures for the identification, assessment and reporting of risks.
7.2 To consider the requirement for an internal audit function annually and establish the terms of reference of such a function.
7.3 To keep under review the scope and results of the audit and its cost effectiveness and the independence and objectivity of the auditors.
7.4 To keep the nature and extent of substantial volumes of non-audit services provided (if any) under review, seeking to balance the maintenance of objectivity and value for money.
7.5 To consider the appointment and re-appointment of the external auditor, the audit fee, and any issues involving the resignation or dismissal of the auditor.
7.6 To discuss with the external auditor the nature and scope of the audit before the audit commences.
7.7 To keep under review the consistency of accounting policies both on a year-to-year basis and across the Company/Group.
7.8 To review the annual financial statements, and discuss with the Board its findings and make known whether it recommends to the Board the inclusion of the financial statements in the Annual Report, and to give independent endorsement to all statements and forecasts made in a prospectus at the time of a rights issue, an acquisition or a bid defence document.
7.9 To discuss problems and reservations arising from the annual audits as well as any matters the auditor may wish to raise (in the absence of executive management where necessary).
7.10 To review the external auditor's management letter and management's response to it, and discuss any concerns the external auditors may have.
7.11 To review the Company's statement on internal control systems prior to endorsement by the Board.
7.12 To meet formally with the Board of Directors once a year to discuss such matters as the Annual Report and the relationship with the external auditors.
7.13 To make whatever recommendations to the Board it deems appropriate and to compile a report to shareholders to be included in the Company's Annual Report and Accounts.
7.14 To give due consideration to the requirements of the UK Listing Authority's Listing Rules.
7.15 To oversee any investigation of activities that are within its terms of reference and act as a court of the last resort.
7.16 To review, on a regular basis, its own performance, constitution and terms of reference to ensure it is operating at maximum effectiveness.
7.17 To consider other topics, as requested by the Board.
Guidelines When Seeking Independent Professional Advice
1. A Director shall give prior notice to the Chairman and the Company Secretary of his intention to seek independent professional advice under this procedure and shall provide the name(s) of any professional advisers he proposes to instruct, together with a brief summary of the subject matter.
2. The Company Secretary shall provide a written acknowledgement of receipt of the notification which shall state whether the fees for the professional advice sought are payable by the Company under these procedures. A Director shall obtain the prior approval of the Chairman where the fees of independent professional advisers are likely to exceed £1,000.
3. "Independent professional advice" for the purpose of these guidelines shall include legal advice and advice of accountants and other professional financial advisors.
4. Any advice received shall be made available to other members of the Board, if the Board so requests.