Constitution

1. 1.1 The board of directors of Bloomsbury Publishing Plc has resolved to establish a committee of the board to be known as the Audit Committee.

Membership

1. 2.1 The membership of the Committee shall be appointed by the board. All members of the Committee shall be non-executive directors of the Company. The Committee shall consist of a minimum of three members. A quorum shall be two members.
2. 2.2 The duties and responsibilities of a member of the Audit Committee are in addition to those set out for a member of the board of directors.
3. 2.3 The Chairman of the Committee shall be appointed by the board from amongst the independent non-executive directors.

Attendance at meetings

1. 3.1 The Chief Executive, Group Finance Director and representatives of the external auditors shall attend all or part of a meeting at the invitation of the Committee.
2. 3.2 The Committee may instruct any officer or employee of the Company to attend any meeting and provide pertinent information as necessary.
3. 3.3 The company secretary shall be the secretary of the Committee.

Frequency of meetings

1. 4.1 Meetings shall be held not less than twice a year or more frequently as circumstances require. Meetings should coincide with key dates in the Company’s financial reporting cycle.
2. 4.2 The Committee Chairman shall convene a meeting upon request of any Committee member who considers it necessary.
3. 4.3 Whenever possible Committee meetings shall be scheduled to allow for adequate time for Committee business, and so that they can be reported promptly and effectively to the board.

Authority

1. 5.1 The Committee is authorized by the board to investigate any activity it deems appropriate. It is authorized to seek any information from any officer or employee of the Company all of whom are directed to co-operate with any request made by the Committee.
2. 5.2 The Committee is authorized to seek any outside legal or independent professional advice and such advisors may attend meetings as necessary.

Duties

The duties of the Committee shall be as follows:

General

1. 6.1 To ensure that there is an open avenue of communication between the internal auditors, the external auditors and the board of directors.
2. 6.2 Review annually and, if necessary, propose for formal board adoption, amendments to the Committee’s terms of reference.
3. 6.3 To discuss with the external auditor, before audit commences, the nature and scope of the audit and to review the external auditors’ quality control procedures and steps taken by the auditor to respond to changes in regulatory and other requirements.

Financial statements

1. 6.4 Review with management and the external auditor at the completion of examination:
   1. the Company’s interim and annual financial statements and related footnotes;
   2. the external auditors’ audit or review of the financial statements and report thereon;
   3. any significant changes which have been required in the external auditors’ audit plan or review.
   4. any significant difficulties or disputes with management encountered during the course of the audit or review; and
   5. other matters related to the conduct of the audit or review which are to be communicated to the Committee under generally accepted auditing standards.
2. 6.5 To review, and challenge where necessary, the actions and judgements of management, in relation to the interim and annual financial statements before submission to the board, paying particular attention to:
   1. critical accounting policies and practices and any changes in them;
   2. decisions requiring a major element of judgment;
   3. the extent to which the financial statements are affected by any unusual transactions in the year and how they are disclosed;
   4. the clarity of disclosures;
   5. significant adjustments resulting from the audit;
   6. the going concern assumption;
   7. compliance with accounting standards;
   8. compliance with stock exchange and other legal requirements; and
   9. reviewing the company’s statement on internal control systems prior to endorsement by the board and to review the policies and process for identifying and assessing business risks and the management of those risks by the Company.

Internal control

1. 6.6 Enquire of management, the Group Finance Director, internal audit, and the external auditors about significant risks or exposures and evaluate the steps taken to minimise such risk to the Company.
2. 6.7 Consider and review with management significant findings of the Risk Management Committee during the year and management’s responses thereto.
3. 6.8 Consider and review with the external auditor and the Group Finance Director:
   1. the adequacy of the Company’s systems of internal control including computerised information systems controls and security;
   2. any related significant findings and recommendations of the external auditor and management’s responses thereto; and
   3. the contents of the external auditor’s management letter, together with management’s responses thereto.

External audit

1. 6.9 Consider the appointment of the external auditor and assess independence of the external auditor.
2. 6.10 Recommend the audit fee to the board and pre-approve any fees in respect of non audit services provided by the external auditor and to ensure that the provision of non audit services does not impair the external auditors’ independence or objectivity;

Internal audit

1. 6.11 Consider and review with the Chief Executive and the Group Finance Director:
   1. any difficulties encountered in the course of internal audits, and any restrictions placed on internal audit scope of work or access to required information or personnel;
   2. the audit plan of future internal audits to be conducted; and
   3. any changes which have been required to the previously approved internal audit plan.

Reporting

1. 7.1 The Chairman of the Committee shall report on Committee business to the board of directors with such recommendations as the Committee may deem appropriate.
2. 7.2 The Committee’s duties and activities during the year shall be disclosed as required in the annual financial statements.
3. 7.3 The Chairman of the Committee shall attend the AGM and shall answer questions, through the Chairman of the board, on the Audit Committee’s activities and their responsibilities.
4. 7.4 The company secretary shall distribute copies of the minutes of meetings of the Committee to all members of the board of directors, and the minutes shall be an agenda paper of the next following board meeting.