Terms of Reference – Audit Committee

Membership

The Board appoints the Chairman and the members of the Audit Committee with reference to recommendations made by the Nominations Committee. The Chairman of the Committee will not usually be the Chairman of the Board and shall be appointed by a majority of the Board, giving particular consideration to those Board members with recent and relevant financial experience.

The Committee shall consist of the following independent Directors:

Humphrey van der Klugt (Chairman); Sarah Bates; Dr David Holbrook; Doug McCutcheon

A quorum for meetings and decisions of the Committee shall be two members present. A member of the management company may also be invited to each Audit Committee meeting.

All Directors seek re-election on an annual basis. Members are appointed to this Committee on the same basis.

Meetings and attendance

The Committee shall meet at least twice per year and at such other times as it sees fit.

A representative of the external auditor shall attend not less than one meeting per year, such meeting will include the review of the annual results. The Chairman or another member shall meet the audit partner at least once during the year to discuss audit planning and the auditors remit.

The external auditor may request additional meetings if they consider them necessary.

The Company Secretary will be the Secretary of the Committee.

The Chairman of the Committee shall attend the Annual General Meeting of the Company to respond to any questions that may be raised as matters within the Committee’s area of responsibility.

The Committee shall, at least once a year, evaluate its own performance, constitution and terms and make any necessary recommendations for change to the Board, to ensure the continued maximum effectiveness of the Committee.

Authority

The members of the Committee are authorised by the Board to carry out any investigation relevant to its terms of reference. Members are authorised to seek any information they require from any Company officer and to obtain expert advice from the Company’s external auditor, professional advisers or otherwise, and to take independent professional advice and to request any officer or adviser as they see fit, and at the expense of the Company, to attend meetings of the Committee in order to obtain such information or advice.

Duties

The Committee will at all times comply with the Listing Rules published by the Financial Conduct Authority (“the Listing Rules”), the recommendations of the Combined Code (Principles of Good Governance and Code of Best Practice – revised July 2003, June 2010, September 2012 and September 2014 (also renamed the UK Corporate Governance Code)) and guidance from the Association of Investment Companies contained in the AIC Code and Guide published in February 2006 and revised in May 2007, March 2009, October 2010, February 2013 and February 2015.

In particular, the duties of the Committee are:

  • to monitor the integrity of the financial statements (see 1 below).
  • to review the internal financial controls and risk management systems, including the effectiveness of any internal audit activities (see 2-3 below).
  • To review annually whether an internal audit function is needed.

in relation to the external auditor:

  • to recommend to the Board their appointment, re-appointment or removal;
  • to develop and implement a policy on the engagement of the external auditor;
  • for non-audit services (see 4-9 below);
  • to approve their remuneration and terms of engagement;
  • to review and monitor their independence and objectivity; and
  • to review the effectiveness of the audit process;
  • where the auditor supplies a substantial volume of non-audit services, to keep the nature and extent of such services under review; and
  • to consider other topics, as defined by the Board

1. to review the half year and annual report and accounts before submission to the Board, focusing particularly on:

1.1 any changes in accounting policies and practices;

1.2 major judgmental areas;

1.3 significant adjustments resulting from the audit;

1.4 the going concern assumption adopted in the annual report and accounts;

1.5 compliance with accounting standards;

1.6 statement concerning internal controls and risk management;

1.7 compliance with the Listing Rules and tax and legal requirements, and

1.8 provide advice to the Board on whether the annual report and accounts, taken as a whole, is fair, balanced and  understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy.

2. to analyse the Board’s key procedures adopted to provide effective internal control, to review the effectiveness of such procedures and make recommendations to the Board and to consider whether the Board should express an opinion on the effectiveness of the procedures; 

3. to receive and review information from the Company’s AIFM and Portfolio Manager on internal audit and compliance;

4. to receive and review information from the Company's Depositary including their oversight of the Company's custody arrangements;

5.to discuss and agree with the external auditor, before the audit commences, the nature and scope of the audit;

6. to review annually the qualifications, expertise, resources and effectiveness of the audit process and procedures;

7. to monitor the auditors compliance with relevant ethical and professional guidance on the rotation of audit partners, the level of fees paid by the company to the overall income of the audit firm, office or partner;

8. to discuss problems and reservations arising from the annual audit, the interim technical review where applicable, and any other matters the external auditor may wish to discuss;

9. where the auditors supply a substantial volume of non-audit services, to keep the nature and extent of such services under review; and

10. to review, on an annual basis, the anti bribery and corruption policies put in place by the Company itself and also by its principal service providers.

Reporting procedures

The Secretary of the Committee shall minute the proceedings and resolutions of all meetings and will produce and circulate the minutes to all Committee members, once agreed, the minutes will be circulated to all members of the Board at the next scheduled Board meeting following the Committee meeting. The Chairman of the Committee shall report formally to the Board where it is deemed necessary.

The Committee shall compile a report to shareholders on its activities to be included in the Annual Report.

Terms of Reference – Nominations Committee

Membership

The Board appoints the Chairman and members of the Nominations Committee.

The Chairman of the Committee will usually be the Senior Independent Director with the exception of where a conflict of interest exists. In such a case, a Chairman will be elected by those Directors present at the meeting.

The Committee shall consist of those Directors deemed to be Independent by the Board. A quorum for meetings and decisions of the Committee shall be three members present. A member of the Alternative Investment Fund Manager ('AIFM') may also be invited to each Nominations Committee meeting.

All Directors seek re election on an annual basis. Members are appointed to this Committee on the same basis.

Meetings and attendance

The Committee will meet at least once per year and at such other times as it sees fit.

The Company Secretary shall be the Secretary of the Committee when requested by the Chairman, otherwise a nominated Director shall act as Secretary to the Committee.

The Chairman of the Committee shall attend the Annual General Meeting of the Company to respond to any questions that may be raised as matters within the Committee’s area of responsibility.

The Committee shall, at least once a year, evaluate its own performance, constitution and terms and make any necessary recommendations for change to the Board, to ensure the continued maximum effectiveness of the Committee.

Authority

The members of the Committee are authorised by the Board to carry out any action or investigation relevant to its terms of reference. Members are authorised to seek any information they require from any Company officer and to obtain expert advice from the Company’s external auditor, professional advisers or otherwise, and to take independent professional advice and to request any officer or adviser as they see fit, and at the expense of the Company, to attend meetings of the Committee in order to obtain such information or advice.

Duties

The Committee will at all times comply with the Listing Rules published by the Financial Conduct Authority (“the Listing Rules”), the recommendations of the Combined Code (Principles of Good Governance and Code of Best Practice – revised July 2003, June 2010, September 2012 and September 2014 (also renamed the UK Code of Corporate Governance)) and guidance from the Association of Investment Companies contained in the AIC Code and Guide published in February 2006 and revised in May 2007, March 2009, October 2010, February 2013 and February 2015.

In particular, the duties of the Committee are:

  • to regularly review the structure, size and composition of the Board and its commitments in relation to the current position and make any recommendations for change to the Board.
  • to evaluate the balance of skills, knowledge and experience on the Board and, in light of this evaluation, prepare a description of the role and capabilities for a particular appointment.
  • to lead the process for Board appointments and make recommendations to the Board.
  • to give full consideration to succession planning in the course of the Committee’s work.
  • to review annually the time required from a non-executive Director.
  • to keep under review the leadership needs of the organisation with a view to ensuring the continued ability of the organisation to compete effectively in the market place.
  • regarding the appointment of a Chairman, prepare a job specification, including an assessment of the time commitment expected, recognising the need for availability in the event of crises.
  • to ensure that on appointment to the Board non-executive Directors receive a formal letter of appointment setting out clearly what is expected of them in terms of time commitment, committee service and involvement in outside Board meetings.

 

Reporting procedures

The Secretary of the Committee shall minute the proceedings and resolutions of all meetings and will produce and circulate the minutes to all Committee members, once agreed, the minutes will be circulated to all members of the Board, unless a conflict of interests exists, at the next scheduled Board meeting following the Committee meeting. The Chairman of the Committee shall report formally to the Board where it is deemed necessary.

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

Terms of Reference – Management Engagement & Remuneration Committee

Membership

The Committee shall consist of those Directors considered to be independent by the Board and a quorum for meetings and decisions of the Committee shall be three members present. A member of the Alternative Investment Fund Manager ('AIFM') may also be invited to each Management Engagement & Remuneration Committee meeting.

All Directors seek re-election on an annual basis. Members are appointed to this Committee on the same basis.

Meetings and attendance

The Committee will meet at least once per year and at such other times as it sees fit.

The Company Secretary shall be the Secretary of the Committee when requested by the Chairman, otherwise a nominated Director shall act as Secretary to the Committee.

The Chairman of the Committee shall attend the Annual General Meeting of the Company to respond to any questions that may be raised as matters within the Committee’s area of responsibility.

The Committee shall, at least once a year, evaluate its own performance, constitution and terms and make any necessary recommendations for change to the Board, to ensure the continued maximum effectiveness of the Committee.

Authority

The members of the Committee are authorised by the Board to carry out any investigation relevant to its terms of reference. Members are authorised to seek any information they require from any Company officer and to obtain expert advice from the Company’s external auditors, professional advisers or otherwise, and to take independent professional advice and to request any officer or adviser as they see fit, and at the expense of the Company, to attend meetings of the Committee in order to obtain such information or advice.

Duties

The Committee will at all times comply with the Listing Rules published by the Financial Conduct Authority (“the Listing Rules”), the recommendations of the Combined Code (Principles of Good Governance and Code of Best Practice – revised July 2003, June 2010, September 2012 and September 2014 (also renamed the UK Code of Corporate Governance)) and guidance from the Association of Investment Companies contained in the AIC Code and Guide published in February 2006 and revised in May 2007, March 2009, October 2010, February 2013 and February 2015.

Remuneration

  • to agree with the Board a framework and broad policy for determining the remuneration of the non-executive Directors.
  • to recommend to the Board remuneration of chairman and Board members.
  • to determine any performance-related pay schemes operated by the Company.
  • to carefully consider what compensation commitments the Directors’ terms of appointment would entail in the event of early termination.
  • to 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.
  • to be exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the committee.
  • to ensure that provisions regarding disclosure of remuneration as set out in the Companies Act and the revised Code are fulfilled.

Management Engagement

  • to regularly review the performance and the terms of engagement of the AIFM and Portfolio Manager and to make any recommendations for change;
  • to review the level of fees payable to the AIFM and Portfolio Manager and to make recommendations to the Board;
  • to keep under review the contract notice period of the AIFM and Portfolio Management Agreements; 
  • to regularly review the performance and the terms of engagement of the Company's other principal service providers; and
  • to review the additional marketing, company secretarial and other sundry services provided by the AIFM.

Reporting procedures

The Secretary of the Committee shall minute the proceedings and resolutions of all meetings and will produce and circulate the minutes to all Committee members, once agreed, the minutes will be circulated to all members of the Board, unless a conflict of interest exists, at the next scheduled Board meeting following the Committee meeting. The Chairman of the Committee shall report formally to the Board where it is deemed necessary.