1. Membership

1.1 The Committee shall be appointed from time to time by the Board from amongst its own members.

1.2 The Committee shall be made up of three non-executive directors at least one of whom will have recent and relevant financial experience.

1.3 The quorum shall be any two members, one of whom shall be the Chairman of the Committee.

1.4 The Chairman of the Committee shall be appointed by the Board.

1.5 The Company Secretary or their nominee shall act as secretary to the Committee.

2. Duties

2.1 To consider and make recommendations to the Board regarding the appointment of the external auditor, the audit fee, terms of business for audit and tax engagements and any questions of resignation or dismissal of the external auditor

2.2 To discuss and agree with the external auditor the nature and scope of the audit

2.3 To review and challenge where necessary the half-year and annual financial statements focusing particularly on:

2.3.1 any changes in accounting policies and practices.

2.3.2 major judgemental areas.

2.3.3 significant adjustments and any unadjusted errors resulting from the audit.

2.3.4 the going concern assumption.

2.3.5 compliance with accounting standards.

2.3.6 all material information presented in the annual and interim reports insofar as it relates to the audit and risk management and the clarity of those disclosures in the context in which they are made.

2.4 To discuss problems and reservations arising from the interim and final audits and any matters the external auditors may wish to raise.

2.5 To review the external auditor’s management letter and management’s response.

2.6 To review:

2.6.1 the effectiveness of Group internal controls and risk management systems, including an annual assessment of whether there should be an internal audit function.

2.6.2 the company’s procedure for detecting fraud.

2.6.3 the appropriateness of the company’s whistleblowing policy.

2.7 The annual financial statements of the pension funds where not reviewed by the board as a whole.

2.8 To develop and implement a policy on the supply of non-audit services by the external auditors, taking into account any relevant ethical guidance on the matter.

2.9 To consider other topics as defined by the Board.

2.10 To at least once a year, review its own performance, constitution and terms of reference to ensure it is operating to maximum effectiveness and recommend any changes it considers necessary to the Board for approval.

3. Authority

3.1 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.

3.2 The Committee is authorised to obtain expert advice or to invite any other director, or professional advisor to attend meetings. In the event the Committee decides to incur expenditure in obtaining professional advice, the Chairman and or Chief Executive shall be advised in advance and the Company Secretary shall be consulted and shall assist in preparing instructions and settling the basis for calculating advisors fees.

4. Meetings

4.1 Meetings should be held at least three times a year. The external auditor may request a meeting if they consider that one is necessary.

4.2 The Finance Director and a representative of the external auditors shall normally attend meetings. Other Board members shall also have the right of attendance. However, at least once a year the Committee shall meet with the external auditors without executive Board members being present.

5. Minutes of meetings

5.1 The secretary shall minute the proceedings and resolutions of all Committee meetings, including the name of those present and in attendance.

5.2 Minutes of Committee meetings shall be circulated promptly to all members of the Committee and the Chairman of the Board and, once agreed, to all other members of the Board, unless conflict of interest exists.

6. Reporting responsibilities

6.1 The Committee Chairman shall report formally to the Board on its proceedings after each meeting on all matters within its duties and responsibilities.

6.2 The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed.

6.3 The Committee shall compile a report to shareholders on its activities to be included in the company’s annual report.

6.4 The Committee Chairman should be available to attend the AGM to respond to any shareholder questions relating to the Committee’s activities and to put to the shareholders the external auditors appointment, re-appointment or removal.