1.1 Members of the Committee shall be appointed by the Board of directors of the Company on the recommendation of the Nomination Committee in consultation with the Chairman of the Audit Committee. The Committee shall be made up of at least three members, with at least two members being independent non-executive directors, at least one of whom shall have recent and relevant financial experience. The chairman of the board shall be entitled to be a member of the Committee, provided he or she was considered independent on appointment.
1.2 The board shall appoint the Committee Chairman who shall be an independent non-executive director. In the absence of the Committee Chairman and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting.
1.3 Members of the Committee, the Financial Director, the Financial Controller and typically a representative of the external auditors shall attend meetings. However, other individuals may be invited to attend all or part of any meeting as and when appropriate. For the avoidance of doubt, a meeting solely of the members of the Committee shall be quorate.
1.4 Appointments to the Committee shall be for a period of up to three years, which may be extended for further periods of up to three year periods, provided the director still meets the criteria for membership of the Committee.
1.5 The Committee or its Chairman shall report to the Board of Directors at least twice a year to detail matters arising from the performance of its duties.
2.1 The Financial Controller shall act as the secretary of the Committee.
3.1 The quorum necessary for the transaction of business shall be two members, both of whom must be independent non-executive directors. 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.
4. Frequency of Meetings
4.1 The Committee shall meet prior to board meetings to consider the interim and annual results, and otherwise as required. Any member of the Committee, the external auditors or the Financial Director may request a meeting if they consider that one is necessary. At least once each year, the Committee shall meet with the external auditors without the presence of executive management.
5. Notice of Meetings
5.1 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, in advance of each meeting. Supporting papers shall be sent to Committee members and other attendees as appropriate, at the same time.
6. Minutes of Meetings
6.1 The Financial Controller shall minute the proceedings and resolutions of all meetings of the Committee, including recording the names of those present and in attendance.
6.2 The Financial Controller shall ascertain, at the beginning of each meeting, the existence of any conflicts of interest and minute them accordingly.
6.3 Minutes 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 it would be inappropriate to do so
7. Annual General Meeting
7.1 The Chairman of the Committee shall make every effort to attend the Annual General Meeting and be prepared to respond to any shareholder questions on the Committee’s activities.
8.1 Financial Reporting
8.1.1 The Committee shall monitor the integrity of the financial statements of the company, including its annual and interim reports, preliminary results’ announcements and any other formal announcement relating to its financial performance, reviewing significant financial reporting issues and judgements which they contain. The Committee shall also review summary financial statements, significant financial returns to regulators and any financial information contained in certain other documents, such as announcements of a price sensitive nature.
8.1.2 The Committee shall review and challenge where necessary:
220.127.116.11 the consistency of, and any changes to, accounting policies both on a year on year basis and across the Company/Group;
18.104.22.168 the methods used to account for significant or unusual transactions where different approaches are possible;
22.214.171.124 compliance with accounting standards, the making of appropriate estimates and judgements, taking into account the views of the external auditor;
126.96.36.199 the clarity of disclosure in the company’s financial reports and the context in which statements are made;
188.8.131.52 the financial statements, such as the operating and financial review and the corporate governance statement (insofar as it relates to the audit and risk management); and
184.108.40.206 whether the Company has followed appropriate accounting standards and made appropriate estimates and judgements, taking into account the views of the external auditor; and
8.1.3 The Committee shall review the contents of the Company’s annual report and accounts as a whole and advise the Board whether, in its view, it considers the report to be fair, balanced and understandable and whether it provides the information necessary for shareholders to reasonably assess the Group’s performance, business model and strategy.
8.2 Internal Controls and Risk Management Systems The Committee shall:
8.2.1 review, at least every six months, the effectiveness of the company’s internal controls and risk management systems; and
8.2.2 review and approve the statements to be included in the annual report concerning internal controls and risk management
8.3 Compliance, Whistleblowing and Fraud
8.3.1 the Committee shall review the company’s arrangements for its employees to raise concerns, in confidence, about possible wrongdoing in financial reporting or other matters. The Committee shall ensure that these arrangements allow proportionate and independent investigation of such matters and appropriate follow up action.
8.3.2 the Committee shall review the Company’s procedures for detecting fraud and the Company’s systems and controls for the prevention of bribery.
8.4 Internal Audit
8.4.1 The Committee shall keep under regular review the possible need for an internal audit function.
8.5 External Audit The Committee shall:
8.5.1 consider and make recommendations to the board, to be put to shareholders for approval at the AGM, in relation to the appointment, re-appointment and removal of the company’s external auditor; the Committee shall oversee the selection process for a new auditor and if an auditor resigns the Committee shall investigate the issues leading to this and decide whether any action is required;
8.5.2 oversee the relationship with the external auditor including (but not limited to):
220.127.116.11 consider and agree their remuneration, whether fees for audit or non-audit services and that the level of fees is appropriate to enable an adequate audit to be conducted;
18.104.22.168 approval of their terms of engagement, including any engagement letter issued at the start of each audit and the scope of the audit;
22.214.171.124 assessing annually their independence and objectivity taking into account relevant professional and regulatory requirements and the relationship with the auditor as a whole, including the provision of any non-audit services;
126.96.36.199 satisfying itself that there are no relationships (such as family, employment, investment, financial or business) between the auditor and the company (other than in the ordinary course of business);
188.8.131.52 monitoring the auditor’s compliance with relevant ethical and professional guidance on the rotation of audit partners, the level of fees paid by the company compared to the overall fee income of the firm, office and partner and other related requirements; and
184.108.40.206 assessing annually their qualifications, expertise and resources and the effectiveness of the audit process which shall include a report from the external auditor on their own internal quality procedures;
8.5.3 meet regularly with the external auditor, including once at the planning stage before the audit and once after the audit at the reporting stage. The Committee shall meet the external auditor at least once a year, without management being present, to discuss their remit and any issues arising from the audit;
8.5.4 review and approve the annual audit plan and ensure that it is consistent with the scope of the audit engagement;
8.5.5 review the findings of the audit with the external auditor. This shall include but not be limited to, the following;
220.127.116.11 a discussion of any major issues which arose during the audit,
18.104.22.168 any accounting and audit judgements,
22.214.171.124 levels of errors identified during the audit, and
126.96.36.199 Effectiveness of the audit The Committee shall also:
8.5.6 review any representation letter(s) requested by the external auditor before they are signed by management;
8.5.7 review the management letter and management’s response to the auditor’s findings and recommendations; and
8.5.8 develop and implement a policy on the supply of non-audit services by the external auditor, taking into account any relevant ethical guidance on the matter.
8.6 Reporting Responsibilities
8.6.1 The Committee Chairman shall report and make recommendations formally to the board on its proceedings after each meeting on all matters within its duties and responsibilities.
8.6.2 The Committee shall compile a report to shareholders on its activities to be included in the company’s annual report.
8.7 Other Matters The Committee shall:
8.7.1 have access to sufficient resources in order to carry out its duties, including access to the company secretariat for assistance as required;
8.7.2 be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members;
8.7.3 give due consideration to laws and regulations, the provisions of the Combined Code and the requirements of the UK Listing Authority’s Listing Rules, Prospectus and Disclosure and Transparency Rules and any other applicable Rules as appropriate;
8.7.4 oversee any investigation of activities which are within its terms of reference and act as a court of the last resort; and
8.7.5 at least once a year, review its own performance, constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the board for approval.
9. Authority The Committee is authorised:
9.1 to investigate any activity within its terms of reference; 9.2 to seek any information it requires from any employee of the company in order to perform its duties; 9.3 to obtain, at the company’s expense, outside legal or other professional advice on any matter within its terms of reference; and 9.4 to call any employee to be questioned at a meeting of the Committee as and when required.
Approved 13 June 2017