Terms of Reference - Audit Committee

1 Membership and attendance
1.1 The Committee shall comprise at least two members, who shall be independent nonexecutive
directors at least one of whom shall have recent and relevant financial experience. The
Chairman of the Board may also be a member of the Committee if he or she was considered
independent on appointment as Chairman.
1.2 The Board shall appoint the Committee members and the Committee Chairman. In the
absence of the Committee Chairman, the remaining members present shall elect one of
themselves to chair the meeting.
1.3 Only Committee members have the right to attend Committee meetings; the Group Finance
Director and Company Secretary, although not members of the Committee will attend meetings
with the agreement of the Committee Chairman. The Company’s external auditors will normally
attend, although they will not be present at meetings when the Committee discusses their
performance and/or remuneration.
1.4 Other Board directors may be invited to attend all or part of any meeting with the agreement
of the Committee Chairman.
2 Quorum and proceedings of meetings
2.1 The quorum for Committee meetings shall be two members.
2.2 The Committee shall meet at least twice yearly at appropriate times.
2.3 Any Committee member may call meetings outside the normal cycle. The Company’s
external auditors may also request additional meetings.
2.5 The Committee will meet at least once per annum with the external auditors without
Company management being present.
3. Principal duties
3.1 Financial reporting
3.1.1 Review the annual and half year financial results, the Annual Report and any other
published information relating to the Group’s financial performance including the going concern
statement to satisfy itself that they meet statutory and other regulatory requirements including
Financial Reporting Standards and, where applicable, the requirements of the UK Listing
Authority, AIM Rules for Companies and the QCA Corporate Governance Code.
3.1.2 Review the disclosure made by the Chief Executive Officer and Group Finance Director in
relation to the Audit and internal financial controls and fraud.
3.1.3 Review the following matters:
the consistency of, and any changes to, significant accounting policies;
the methods used to account for significant or unusual transactions;
whether the Group has followed appropriate accounting standards and made appropriate
estimates and judgements; 
the clarity and completeness of disclosure in the Group’s externally published financial
reports; and
all significant information presented within the Annual Report and financial statements,
including the strategic review and the corporate governance statements relating to the
audit.
3.2 Internal control
3.2.1 Monitor and review the standards of internal control, including the identification of internal
control risks, the effectiveness of internal control, financial reporting, accounting policies and
procedures, and the Company’s statements on internal controls.
3.2.2 Establishing and reviewing the effectiveness of all processes for dealing with:

•  Any communication received by the Group regarding accounting, internal accountingcontrols or auditing matters; and
•  ‘Whistleblowing’ procedures

3.3 Internal audit
3.3.1 Review the need for internal audit
3.3.2 If it is decided that an internal audit function is appropriate, to agree the plan for internal
audit work and its relationship with the external auditors.
3.4 External audit
3.4.1 Review and make recommendations to the Board, to be put to the shareholders for
approval at the Annual General Meeting, in relation to the appointment, re-appointment and
removal of the Company’s auditors
3.4.2 Manage any process in relation to tendering of the external audit contract.
3.4.3 Review the performance of the external auditors including their independence, the scope of
their audit and fee.
3.4.4 Review, at least annually, the effectiveness of the audit.
3.4.5 Review the nature and extent of non-audit and consultancy services provided by the
external auditors.
3.4.6 Review and approve the audit plan issued at the start of each audit cycle.
3.4.7 Review the scope and results of the external audit and any significant findings reported in
the auditor’s Report to the Audit Committee
3.4.8 Review and discuss any reports from the external auditors on critical accounting policies
and judgemental matters.
3.4.9 Review and make recommendation to the Board on any Letter of Representation required
by the external auditors in relation to the Audit process. 
4. Reporting responsibilities
4.1 After each meeting, the Committee Chairman shall report formally to the Board on its work
and how it has discharged its responsibilities.
4.2 A report to the shareholders on the activities of the Committee in discharging its
responsibilities may be included in the Annual Report.
4.3 The Committee Chairman shall attend the Annual General Meeting to answer shareholder
questions on the Committee’s activities
5. Authority

The Committee has authority to:
5.1 oversee any investigation of activities which are within its terms of reference;
5.2 require provision of any necessary information to fulfill the above;
5.3 obtain, following consultation with the Chairman of the Company, outside legal help and any
professional advice, at the Group’s expense, which is deemed necessary to enable it to fulfill its
duties;
5.4 call any employee, through the Company Secretary, to be questioned at a meeting of the
Committee as and when required; and
6. Other
The terms of reference and the effectiveness of the Committee shall be reviewed annually and
the necessary recommendations made to the Board for its approval.