Terms of Reference of the Audit Committee of Northgate plc
1. Membership
1.1. Members of the Committee shall be appointed by the Board and shall comprise at least 3 members, all of whom shall be independent non-executive Directors and at least one of whom should have recent and relevant financial experience. The Chairman of the Board shall not be a member of the Committee.
1.2. Only members of the Committee have the right to attend Committee meetings. However, other Directors, employees or external advisers may be invited to attend for all or part of any meeting, as and when appropriate.
1.3. The external auditors will be invited to attend meetings on a regular basis.
1.4. Appointments to the Committee shall be for a period of up to three years, which may be extended for two further three-year periods provided that the Director remains independent.
1.5. The Board shall appoint the Committee Chairman. In the absence of the Committee Chairman and/or an appointed deputy, the remaining members present shall elect one of their number to chair the meeting.
1.6. The Company Secretary shall act as the Secretary of the Committee.
2. Proceedings
2.1. The Committee shall meet at least three times a year and at such other times as the Chairman of the Committee shall require or at the request of the external auditors.
2.2. The quorum necessary for the transaction of business shall be 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.
2.3. Reasonable notice of each meeting together with an agenda of items to be discussed and any relevant supporting papers shall be sent to Committee members and to other attendees as appropriate.
2.4. The Secretary shall minute the proceedings and resolutions of all Committee meetings.
2.5. Minutes of Committee meetings shall be circulated to all members of the Committee and, once agreed, to all other members of the Board.
2.6. The Committee Chairman shall report to the Board on its proceedings after each meeting on all matters within its duties and responsibilities.
2.7. The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed.
2.8. The Committee is authorized to seek any information it requires from any employee of the Group in order to perform its duties.
2.9. The Committee is authorized to obtain, at the Company’s expense, outside legal or other professional advice on any matters within its terms of reference.
3. The duties of the Committee shall be:
3.1 Financial Reporting
To monitor the integrity of the financial statements of the Company, including its annual and interim reports, preliminary results announcements and any other formal statements which include financial information or which relate to its financial performance.
3.2 Internal controls and risk management
3.2.1 To monitor the integrity of the Group’s internal controls and risk management systems.
3.2.2 To review arrangements by which the Group’s employees may raise concerns, in confidence, about possible wrongdoing in financial reporting or other matters and to ensure that such matters are independently investigated and follow-up action, if appropriate, is taken.
3.3 Internal Audit
3.3.1 To monitor and review the activities of the internal audit department.
3.3.2 To approve the appointment and removal of the head of the internal audit function.
3.3.3 To ensure that the internal audit function has adequate resources and is sufficiently independent to properly fulfill its role.
3.3.4 To ensure that the head of internal audit has direct access to the Chairman of the Board and to all members of the Committee and is accountable to the Committee.
3.3.5 To meet with the head of internal audit at least once a year without management being present.
3.3.6 To review and monitor management’s responsiveness to the internal auditors findings and recommendations.
3.4 External Audit
3.4.1 To consider and make recommendations to the Board on the appointment, reappointment and removal of the external auditor.
3.4.2 To approve the terms of engagement and the remuneration to be paid to the external auditor.
3.4.3 To assess the qualification, expertise and resources, effectiveness and independence of the external auditor annually.
3.4.4 To agree with the Board, and monitor the application of, a policy for the employment of former employees of the external auditor.
3.4.5 To recommend to the Board, and monitor the implementation of, a policy in relation to the provision of non-audit services by the external auditor so as to ensure that the provision of such services does not impair the external auditors’ independence and objectivity
3.4.6 In connection with the annual audit:
3.4.6.1 To review and approve the audit plan, before the commencement of the audit process.
3.4.6.2 To review the findings of the audit with the external auditor, in the absence of management where necessary.
3.4.6.3 To review the management letter and monitor management’s response to any recommendations made by the external auditor.
3.4.6.4 To review, prior to signature, any letter of representation requested by the external auditor.
3.4.6.5 At the end of the audit, to assess the effectiveness of the audit process.
3.4.7 To review the results of the external auditors’ review of the interim financial statements and any issues arising therefrom.
3.4.8 To meet with the external audit partner at least once a year without management being present.
3.5 To investigate any other matter of a financial or accounting nature delegated by the Board.
4. 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.
5. The Chairman of the Committee (or, if he is unable to be present, another member designated for the purpose) shall attend the Annual General Meeting and be prepared to respond to any shareholder questions on the Committee’s activities.
Terms of Reference of the Nomination Committee of Northgate plc
1. Membership
1.1. Members of the Committee shall be appointed by the Board and shall comprise at least 3 members, the majority of whom should be independent non-executive Directors.
1.2. Only members of the Committee have the right to attend Committee meetings. However, other Directors, employees or external advisers may be invited to attend for all or part of any meeting, as and when appropriate.
1.3. Appointments to the Committee shall be for a period of up to three years, which may be extended for two further three-year periods provided that the majority of the Committee members remain independent.
1.4. The Board shall appoint the Committee Chairman who should be either the Chairman of the Board or 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 their number to chair the meeting. The Chairman of the Board shall not chair the Committee when it is dealing with the matter of succession to the chairmanship.
1.5. The Company Secretary shall act as the Secretary of the Committee.
2. Proceedings
2.1. The Committee shall meet at least once a year and at such other times as the Chairman of the Committee shall require.
2.2. The quorum necessary for the transaction of business shall be 2 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.
2.3. Reasonable notice of each meeting together with an agenda of items to be discussed and any relevant supporting papers shall be sent to Committee members and to other attendees as appropriate.
2.4. The Secretary shall minute the proceedings and resolutions of all Committee meetings.
2.5. Minutes of Committee meetings shall be circulated to all members of the Committee and the Chairman of the Board and, once agreed, to all other members of the Board, unless a conflict of interest exists.
2.6. The Committee Chairman shall report to the Board on its proceedings after each meeting on all matters within its duties and responsibilities.
2.7. The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed.
2.8. The Committee is authorized to seek any information it requires from any employee of the Group in order to perform its duties.
2.9. The Committee is authorized to obtain, at the Company’s expense, outside legal or other professional advice on any matters within its terms of reference.
3. Duties
3.1. The Committee shall:
3.1.1. periodically review the structure, size and composition (including the skills, knowledge and experience) required of the Board compared to its current position and make recommendations to the Board with regard to any changes;
3.1.2. give full consideration to succession planning for Directors and other senior executives in the course of its work, taking into account the challenges and opportunities facing the company, and what skills and expertise are therefore needed on the Board in the future;
3.1.3. be responsible for identifying and nominating for the approval of the Board, candidates to fill board vacancies as and when they arise;
3.1.4. before appointment is made by the Board, evaluate the balance of skills, knowledge and experience on the Board, and, in the light of this evaluation prepare a description of the role and capabilities required for a particular appointment. In identifying suitable candidates the Committee shall normally use open advertising or the services of external advisers to facilitate the search;
3.1.5. periodically review the time required from non-executive Directors in order to properly fulfil their duties; and
3.1.6. ensure that on appointment to the Board, non-executive Directors receive a formal letter of appointment setting out what is expected of them in terms of time commitment, committee service and involvement outside Board meetings.
3.2. the Committee shall also make recommendations to the Board concerning:
3.2.1. formulating plans for succession for both executive and non-executive Directors and in particular for the key roles of Chairman and Chief Executive (but see 3.2.5 below);
3.2.2. suitable candidates for the role of senior independent Director;
3.2.3. the re-election by shareholders of any Director who has reached the age of 70;
3.2.4. any matters relating to the continuation in office of any Director at any time including the suspension or termination of service of an executive Director as an employee of the company subject to the provisions of the law and their service contract; and
3.2.5. the appointment of any Director to executive or other office other than to the positions of Chairman and Chief Executive, recommendations for which should be considered at a meeting of the full Board.
3.3. The Chairman of the Committee (or if he is unable to be present, another member designated for the purpose) shall attend the Annual General Meeting and be prepared to respond to any shareholder questions on the Committee’s activities.
Terms of Reference of the Remuneration Committee of Northgate plc
1. Membership
1.1. Members of the Committee shall be appointed by the Board and comprise at least 3 members, all of whom shall be independent non-executive Directors.
1.2. Only members of the Committee have the right to attend Committee meetings. However, other Directors, employees or external advisers may be invited to attend or all or part of any meeting, as and when appropriate.
1.3. Appointments to the Committee shall be for a period of up to three years, which may be extended for two further three-year periods provided that the Director remains independent.
1.4. The Board shall appoint the Committee Chairman. In the absence of the Committee Chairman and/or an appointed deputy, the emaining members present shall elect one of their number to chair the meeting. The Chairman of the Board shall not be Chairman of the Committee.
1.5. The Company Secretary shall act as the Secretary of the Committee.
2. Proceedings
2.1. The Committee shall meet at least twice a year and at such other times as the Chairman of the Committee shall require.
2.2. The quorum necessary for the transaction of business shall be 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.
2.3. Reasonable notice of each meeting together with an agenda of items to be discussed and any relevant supporting papers shall be sent to Committee members and to other attendees as appropriate.
2.4.The Secretary shall minute the proceedings and resolutions of all Committee meetings.
2.5. Minutes of Committee meetings shall be circulated to all members of the Committee and, once agreed, to all other members of the Board, unless a conflict of interest exists.
2.6. The Committee Chairman shall report to the Board on its proceedings after each meeting on all matters within its duties and responsibilities.
2.7. The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed.
2.8. The Committee is authorized to seek any information it requires from any employee of the Group in order to perform its duties.
2.9. The Committee is authorized to obtain, at the Company’s expense, outside legal or other professional advice on any matters within its terms of reference.
3. Duties
The Committee shall:
3.1. 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 the executive members of the Board. No Director or manager shall be involved in any decisions as to their own remuneration;
3.2. 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;
3.3. Within the terms of the agreed policy and in consultation with the Chairman and/or Chief Executive as appropriate, determine the total individual remuneration package for the Chairman and each executive Director and other senior executives including bonuses, incentive payments, share options or other share awards, pension arrangements and termination payments;
3.4. Ensure that contractual terms on termination, and any payments made, are fair to the individual and the Company, that failure is not rewarded and that the duty to mitigate loss is fully recognised;
3.5. In determining such packages and arrangements, give due regard to any relevant legal requirements, the provisions and recommendations in the Combined Code and the UK Listing Authority’s Listing Rules and associated guidance;
3.6. Determine and periodically review the framework for remuneration policy and employee benefit structures throughout the Group;
3.7. Approve the design of, and determine targets for, any performance related pay schemes operated by the Group for executive directors and the company secretary and approve the total annual payments made under such schemes;
3.8. Review the design of all share incentive plans for approval by the Board and shareholders. For any such 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 senior executives and the performance targets to be used;
3.9. Determine the policy for, and scope of, Group pension arrangements generally;
3.10. Ensure that all provisions regarding disclosure of remuneration including pensions, as set out in the Directors’ Remuneration Report Regulations 2002 and the Combined Code are fulfilled;
3.11. Be 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 fulfill its obligations; and
3.12. The Chairman of the Committee (or if he is unable to be present, another member designated for the purpose) shall attend the Annual General Meeting and be prepared to respond to any shareholder questions on the Committee’s activities.