Gresham Technologies : Audit Committee Terms of Reference 2022

GRESHAM TECHNOLOGIES PLC

Audit Committee

Terms of Reference

(as adopted by the board of directors of the Company on 20 December 2022)

Reference to "the Committee" shall mean the Audit Committee.

Reference to "the Company" shall mean Gresham Technologies plc and, where applicable, its subsidiaries Reference to "the Board" shall mean the Board of Directors.

1. Membership

1. Membership of the Committee shall be appointed by the Board on the recommendation of the Nomination Committee in consultation with the Chair of the Committee.
2. The Committee shall be made up of at least two members.
3. All members of the Committee shall be independent Non-Executive Directors, at least one of whom shall have recent and relevant financial experience, be competent in accounting and/or auditing and shall, preferably, hold a professional qualification from one of the professional accountancy bodies.
4. Only members of the Committee have the right to attend Committee meetings. However, other directors and other individuals (including representatives of external advisers) may be invited to attend all or part of any meeting as and when appropriate in the opinion of the Chair of the Committee or the majority of its members.
5. The Chief Financial Officer and external audit lead partner will be invited to attend meetings of the Committee on a regular basis. The Committee may also invite other attendees, including the Chief Executive Officer, as the Committee Chair sees fit.
6. Appointments to the Committee shall be for a period of up to three years (subject to the election and re-election provisions in the Company's constitution and in the UK Corporate Governance Code), which may be extended by two further periods of up to three years each (subject to the other terms in this document).
7. The Board shall appoint the Chair of the Committee. In the absence of the Chair and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting.

1. Secretary

1. The Company Secretary, or their nominee, shall act as the secretary of the Committee and will ensure that the Committee receives information and papers in a timely manner to enable dull and proper consideration to be given to the issues.

1. Quorum

1. The quorum necessary for the transaction of business shall be two members. A duly

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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. Meetings

1. The Committee shall meet at least twice a year at appropriate intervals in the financial reporting and audit cycle, and otherwise as required. Meetings may be held in person, or, provided all members are able to hear and speak to each other throughout the meeting, by telephone or video conference.
2. Outside of the formal meeting programme, the Chair of the Committee, and to a lesser extent the other committee members, shall maintain a dialogue with key individuals involved in the Company's governance, including the Chair of the Board, Chief Executive Officer, Chief Financial Officer and external audit lead partner.
3. Meetings of the Committee shall be convened by the Secretary of the Committee at the request of any of its members or at the request of the external audit lead partner if such person considers it necessary.
4. Only Committee members are entitled to attend Committee meetings. However, the Committee is authorised to invite non-members, including without limit the Chief Executive Officer, Chief Finance Officer, and external advisers, to attend for all or part of any meeting where the Committee Chair considers it necessary or appropriate to do so.
5. Unless otherwise agreed by the Committee, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall normally be forwarded to each member of the Committee, any other person required to attend and all other Non- Executive Directors as appropriate and agreed, no later than five days before the date of the meeting.
6. The Secretary shall ensure that each member of the Committee (and any other attendee as appropriate) receives information and papers (whether in physical or electronic form) in a timely manner to enable proper consideration to be given to issues.
7. The Secretary shall minute the proceedings and decisions of all meetings of the Committee, including recording the names of those present and in attendance.
8. Draft minutes of Committee meetings shall be circulated promptly to all members of the Committee. Once approved, minutes should be circulated to all other members of the Board, other than where, in the opinion of the Chair of the Committee, it would be inappropriate to do so.

1. Engagement with Shareholders

1. The Chair of the Committee should attend the annual general meeting to answer shareholder questions on the Committee's activities, as appropriate.
2. In addition, the Chair of the Committee should seek engagement with shareholders on significant matters related to the Committee's areas of responsibility.

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6. Duties General

1. The Committee should carry out the duties detailed below for the Company, major subsidiary undertakings and the group as a whole unless required otherwise by regulation, as appropriate. In carrying out these duties, the members of the Committee must comply with their duty under section 172 of the Companies Act 2006 to act in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole, whilst having regard to the interests of employees, stakeholders and other matters as required by section 172.
   Financial Reporting
2. The Committee shall monitor the integrity of the financial statements of the Company, including its annual and half-yearly reports, preliminary announcements and any other formal statements (including announcements) relating to its financial performance, reviewing and reporting to the Board on significant financial reporting issues and judgements which those statements contain, having regard to matters communicated to it by the external auditor.
3. The Committee shall review and challenge where necessary:
4. 1. the application of significant accounting policies and changes to them;
   2. the methods used to account for significant or unusual transactions where different approaches are possible;
   3. whether the Company has adopted appropriate accounting policies and made appropriate estimates and judgements, taking into account the views of the external auditor on the financial statements;
   4. the clarity and completeness of disclosure in the Company's financial reports and the context in which statements are made; and
   5. all material information presented with the financial statements, such as the strategic report and the corporate governance statement (insofar as it relates to the audit and risk management).
5. The Committee shall review any other statements requiring Board approval which contain financial information first, where to carry out a review prior to Board approval would be practicable and consistent with any prompt reporting requirements under any law or regulation including the Listing Rules, Prospectus Rules and Disclosure Guidance and Transparency Rules sourcebook.
6. The Committee shall report its views to the Board if it is not satisfied with any aspect of the proposed financial reporting by the Company.
   Narrative Reporting
7. The Committee shall, if requested by the Board, review the content of the annual report and accounts and advise the Board on whether, taken as a whole, it is fair, balanced and understandable, so as to inform the Board's statement in the annual report on these matters

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as required by the UK Corporate Governance Code; and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

Internal Controls

1. The Committee shall keep under review the Company's internal control and risk management systems in relation to financial risks, and, unless otherwise agreed by the Board, the Company's other internal control and risk management systems.
2. The Committee shall review and approve the statements to be included in the annual report concerning internal control and risk management systems for which the Committee is responsible. The Committee will also review the principal risks and emerging risks statements, and the viability statement.
   Speak-up (Whistleblowing)
3. The Committee shall:
4. 1. review the adequacy and security of the Company's arrangements for its employees and contractors to raise concerns, in confidence, about possible wrongdoing in financial reporting or other matters;
   2. ensure that these arrangements allow proportionate and independent investigation of such matters and appropriate follow up action;
   3. review the Company's procedures for detecting fraud, and the prevention of bribery and corruption.

Internal Audit

1. The Committee shall at least annually review the need (or otherwise) for a separate internal audit function, in the context of the Company's overall risk management system, and shall make a recommendation to the Board accordingly. Where it concludes that there is no need for a separate internal audit function, the reasons for the absence of such a function should be explained in the relevant section of the Company's annual report.
   External Audit
2. The Committee shall:
3. 1. consider and make recommendations to the Board, to be put to shareholders for approval at the annual general meeting, in relation to the appointment, re- appointment and removal of the Company's external auditor;
   2. if an auditor resigns, investigate the issues leading to this and decide whether any action is required;
   3. ensure that the external audit services contract is put out to tender in accordance with applicable regulatory and legislative requirements, to enable the Audit Committee to compare the quality and effectiveness of the services provided by the incumbent auditor with those of other audit firms, and in respect of such tender oversee the selection process and ensure that all tendering firms have the

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necessary access to information and individuals throughout the tendering process;

6.11.4. oversee the relationship with the external auditor including (but not limited to):

1. approving the external auditor's remuneration, including both fees for audit and non-audit services, and ensure that the level of fees is appropriate to enable an effective and high-quality audit to be conducted;
2. approving the external auditor's terms of engagement, including any engagement letter issued at the start of each audit and the scope of the audit;
3. assessing annually the external auditor's independence and objectivity taking into account relevant law, regulation, the Ethical Standard and other professional requirements, and the relationship with the auditor as a whole, including any threats to the auditor's independence and the safeguards applied to mitigate those threats including the provision of any non-audit services;
4. satisfying itself that there are no relationships between the auditor and the Company (other than in the ordinary course of business) which could adversely affect the auditor's independence and objectivity;
5. agreeing with the Board a policy on the employment of former employees of the Company's auditor, taking into account the Ethical Standard and legal requirements, and monitoring the implementation of this policy;
6. monitoring the auditor's processes for maintaining independence, its compliance with relevant law, regulation, other professional requirements and the Ethical Standard, including the guidance on the rotation of audit partner and staff;
7. monitoring the level of fees paid by the Company to the external auditor compared to the overall fee income of the firm, office and partner and assessing these in the context of relevant legal, professional and regulatory requirements, guidance and the Ethical Standard;
8. assessing annually the external auditor's independence, qualifications, expertise and resources and the effectiveness of the external audit process, which shall include a report from the external auditor on their own internal quality procedures;
9. seeking to ensure co-ordination of the external audit with the activities of the internal audit function (if in place); and
10. evaluating the risks to the quality and effectiveness of the financial reporting process in light of the external auditor's communications with the Committee.

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