In these terms of reference:
"Board" means the board of directors of the Company; and
"Committee" means the audit committee of the Board.
2.1. Members of the Committee shall be appointed by the Board, in consultation with the chairman of the Committee. The Committee shall be made up of at least three members, the majority of whom shall be independent non executive directors.
2.2. Only members of the Committee have the right to attend Committee meetings. However, other individuals may be invited to attend for all or part of any meeting, as and when appropriate.
2.3. The Board shall appoint the chairman of the Committee, who shall or shall not be an independent non executive director. In the absence of the chairman of the Committee and/or an appointed deputy, the remaining members present shall elect one of their number to chair the meeting.
The Company Secretary or his/her nominee shall act as the secretary of the Committee.
The quorum necessary for the transaction of business shall be two. 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.
The Committee shall meet at least once a year and at such other times as the chairman of the Committee shall require.
6. 1. Meetings of the Committee shall be summoned by the secretary of the Committee at the request of any of its members.
6.2. 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 later than three working days before the date of the meeting. Irrespective of the length of notice being given, attendance of a meeting by a member shall be deemed waiver of the requisite length of notice by the member. Notice of any adjourned meeting is not required if the adjournment is less than 5 working days. Supporting papers shall be sent to Committee members and to other attendees, as appropriate, at the same time.
7.1. The secretary of the Committee shall minute the proceedings and resolutions of all Committee meetings, including recording the names of those present and in attendance.
7.2. The secretary of the Committee shall ascertain, at the beginning of each Committee meeting, the existence of any conflicts of interest and minute them accordingly.
7.3. Minutes of Committee meetings shall be circulated promptly within a reasonable time after the meetings to all members of the Committee and, once agreed, to all other members of the Board, unless a conflict of interest exists.
Resolutions of the Committee shall be passed by a majority of votes which can also be passed by way of unanimous written resolutions. Meetings can be held in person, by telephone or by video conference.
The chairman of the Committee shall attend the AGM prepared to respond to any shareholder questions on the Committee's activities.
The Committee shall:
10.1. determine and agree with the Board the framework or broad policy for the remuneration of the Company's chief executive, chairman, the executive directors, the Company secretary and such other members of the executive management as it is designated to consider. The remuneration of non executive directors shall be a matter for the chairman and executive members of the Board. No director or manager shall be involved in any decisions as to his/her own remuneration;
10.2. in determining such policy, take into account all factors which it deems necessary. The objective of such policy shall be to ensure that members of the executive management of the Company are provided with appropriate incentives to encourage enhanced performance and are, in a fair and responsible manner, rewarded for their individual contributions to the success of the Company;
10.3. review the design of all employees' share schemes and other incentive plans for approval by the Board and shareholders. For any such schemes/plans, determine each year whether awards will be made and, if so, the overall amount of such awards, the individual awards to executive directors and other members of the executive management and the performance targets to be used;
10.4. determine the policy for, and scope of, pension arrangements for each executive director and other members of the executive management;
10.5. within the terms of the agreed policy and in consultation with the chairman of the Board and/or chief executive, as appropriate, determine the total individual remuneration package of each executive director and other members of the executive management (including bonuses, incentive payments and share options or other share awards);
10.6. in determining such packages and arrangements, give due regard to any relevant legal requirements and the provisions and recommendations in the Combined Code and associated guidance;
10.7. review and note annually the remuneration trends across the Company;
10.8. oversee any major changes in employee benefits structures throughout the Company;
10.9. agree the policy for authorising claims for expenses from the chief executive and the chairman of the Board;
10.10. ensure that all legal and regulatory provisions regarding disclosure of remuneration (including pensions) are fulfilled; and
10.11. be exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the Committee; and to obtain reliable, up to date information about remuneration in other companies. The Committee shall have full authority to commission any reports or surveys which it deems necessary to help it fulfil its obligations.
11.1. The chairman of the Committee shall report formally to the Board on its proceedings after each meeting on all matters within its duties and responsibilities.
11.2. The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed.
11.3. Where requested to do so by the Board, the Committee shall produce an annual report of the Company's remuneration policy and practices, which will form part of the Company's annual report and accounts, and ensure that, at each AGM, such report is laid before, and voted on by, shareholders.
The Committee shall, 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.
The Committee is authorised by the Board:
13.1. to seek any information it requires from any employee of the Company in order to perform its duties; and
13.2. to obtain, at the Company's expense, outside legal or other professional advice on any matters within its terms of reference.