Kesa Risk Universe Compliance Risks

POLICY CHANGE MANAGEMENT Amendments made Edition Date Original version 00 09/2003 New original version all pages amended 01 06/2009 Pages 5, 7, 8, 9 amended 02 12/2010

KESA AUDIT COMMITTEE 1. CONSTITUTION The Board has established a Committee of the Board to be known as the Audit Committee. 2. PURPOSE The role and responsibility of the Committee are: 2.1. To monitor the integrity of the financial statements of the Company. 2.2. To review the Company s internal controls and risk management systems. 2.3. To monitor and review the effectiveness of the Company s internal audit function. 2.4. To make recommendations to the Board in relation to the appointment of the external auditor and to approve the remuneration and terms of engagement of the external auditor following appointment by the shareholders in general meeting. 2.5. To monitor and review the external auditor s independence, objectivity and effectiveness. 2.6. To approve the policy on the engagement of the external auditor to supply non-audit services. 3. MEMBERSHIP 3.1 The Committee shall be appointed by the Board. All members of the Committee shall be independent non-executive directors of the Company. The Committee shall consist of not less than three members, at least one of whom shall have recent and relevant financial experience. A quorum shall be two members. 3.2 The Chairman of the Committee shall be appointed by the Board from amongst the independent non-executive directors. 3.3 The Company Secretary shall be the secretary of the Committee. 3.4 The Chairman of the Board shall not be a member of the Committee.

4. ATTENDANCE AT MEETINGS 4.1 The Chief Executive, the Finance Director, other Board Members, the Director of Internal Audit and Risk Management and a representative of the external auditors shall attend meetings at the invitation of the Committee. 4.2 Each of the external auditors and the Director of Internal Audit and Risk Management shall have the right to meet with the Committee without executive directors present. A separate part of each meeting will be set aside for discussions with the external auditors and/or Directors of Internal Audit and Risk Management as required. 5. FREQUENCY OF MEETINGS 5.1 Meetings shall be held not less than three times a year, and where appropriate should coincide with key dates in the Company s financial reporting cycle. 5.2 Notice of each meeting confirming the venue, time and date together with the agenda of items to be discussed shall be forwarded to each member of the Committee in advance of the meeting. 5.3 External auditors or internal auditors may request a meeting if they consider that one is necessary. 6. AUTHORITY The Committee is authorised by the Board to: 6.1 Investigate any activity within its terms of reference. 6.2 Seek any information that it requires from any employee of the Company and all employees are directed to cooperate with any request made by the Committee. 6.3 Direct either the external or internal auditors to undertake investigations on its behalf and to follow up on any suspicions of fraud. 6.4 To commission reports from the subsidiary audit committees. 6.5 Obtain outside legal or independent professional advice and such advisors may attend meetings as necessary.

7. RESPONSIBILITIES The responsibilities of the Committee shall be: 7.1 To consider the appointment of the external auditor and any questions of resignation or dismissal and assess the independence and objectivity of the external auditor, ensuring that key partners are rotated at appropriate intervals. 7.2 To recommend the audit fee to the Board and pre-approve any fees in respect of non audit services provided by the external auditor. 7.3 To ensure that the provision of non audit services does not impair the external auditors independence or objectivity and to keep under review the non-audit fees paid to the external auditors both in relation to their significance to the auditors and in relation to the Group s total expenditure on consultancy. 7.4 To discuss with the external auditor, before the audit commences, the nature and scope of the audit. 7.5 To agree a policy on the employment of former employees of the Company s auditors and monitor compliance. 7.6 To review the proposed audit programme for each operating company with the external auditor and to ensure co-ordination where more than one audit firm is involved. 7.7 To review the auditors quality control procedures and steps taken by the auditor to respond to changes in regulatory and other requirements. To assess annually the auditor s performance and effectiveness. 7.8 To oversee the process for selecting the external auditor and make appropriate recommendations through the Board to the shareholders to consider at the AGM. 7.9 To review the external auditor s management letter and management s response. 7.10 To keep under review the effectiveness of the Company s internal controls and risk management systems. 7.11 To review the internal audit programme including an overview of the subsidiaries approach and ensure that the internal audit function is adequately resourced and has appropriate standing within each company.

7.12 To consider management s response to any major external or internal audit recommendations. 7.13 To approve the appointment or dismissal of the Director of Internal Audit and Risk Management.. 7.14 To be satisfied that the Group s policy on business ethics and compliance is being followed and that the control procedures are satisfactory. 7.15 To review and monitor expenses incurred by Directors 7.16 To review the Company s procedures for handling allegations from whistleblowers. 7.17 To review management s and the internal auditor s reports on the effectiveness of systems for internal financial control, financial reporting and risk management. 7.18 To consider the finds of major internal investigations into control weaknesses, fraud or misconduct and management s response, (in the absence of management where necessary). 7.19 To receive and review reports from the internal audit committees of each operation company. 7.20 To review, and challenge where necessary, the actions and judgements of management, in relation to the interim management accounts and annual financial statements before submission to the Board, paying particular attention to: critical accounting policies and practices, and any changes in them; decisions requiring a major element of judgement; the extent to which the financial statements are affected by any unusual transactions in the year and how they are disclosed; the clarity of disclosures; significant adjustments resulting from the audit; the going concern assumption; compliance with accounting standards; compliance with stock exchange and other similar legal requirements; reviewing the Company s corporate governance statement prior to endorsement by the Board; and

7.21 To review and approve all statements to be included in the annual report or other publications, including the Company s website concerning the Committee s activities, internal controls and risk management and corporate governance issues generally. 7.22 To consider other topics, as defined by the Board. 8. REPORTING PROCEDURES 8.1 The Secretary shall circulate the minutes of meetings of the Committee to all members of the Board, the external auditors and such other attendees of the meetings as the Chairman of the Committee shall direct or as the Secretary shall think fit and the Chairman of the Committee or, as a minimum, another member of the Committee, shall attend the Board meeting at which the accounts are approved. 8.2 The Committee shall report to the Board on the following matters for which it has delegated responsibility: the monitoring and review of the application of policy relating to the audit of all companies within the Group; the monitoring and review of the consistency of compliance with and application of the accounting principles, policies and standards to be used by the Group in maintaining and producing their statutory accounts and financial reports; the appointment of the external auditors, the audit fee, and any questions of their resignation or dismissal; the review of the effectiveness of the internal control system to give assurance to the Board that effective control is being maintained; and the review of the Company s corporate governance statement. 8.3 The Committee members shall conduct an annual review of their work and these terms of reference and make recommendations to the Board. 8.4 The Committee s duties and activities during the year shall be disclosed in the annual financial statements. 8.5 The Chairman shall attend the AGM and shall answer questions, through the Chairman of the Board, on the Audit Committee s activities and their responsibilities. 8.6 The Director of Internal Audit and Risk Management for the company shall have direct access to the Chairman of the Committee to ensure the independence of the position.

KESA NOMINATION COMMITTEE 1. OBJECTIVES To comply with The Stock Exchange Listing Rules regarding the consideration and appointment of new directors. 2. MEMBERSHIP (i) (ii) (iii) The Nomination Committee shall be appointed by the Board from time to time and shall comprise the Chairman, the Chief Executive and at least two other directors. The Chairman shall be the Chairman of the Company The quorum shall be two members one of whom shall be an executive director and one a non-executive director. 3. ATTENDANCE The Secretary of the Nomination Committee shall be the Company Secretary. 4. FREQUENCY The Nomination Committee shall meet on an ad hoc basis as necessary to fulfil its responsibilities and meet its objectives. 5. RESPONSIBILITIES Reviewing the suitability of suggested new directors and recommending to the Board the preferred candidates. 6. POWERS The Nomination Committee shall have the power to employ the services of such advisers as it deems necessary to fulfil its responsibilities.

KESA REMUNERATION COMMITTEE 1. OBJECTIVES The Remuneration Committee shall make recommendations to the Board on the Company s framework of Executive Remuneration and its costs and perform, on behalf of the Board, the determination and application of policy relating to remuneration and benefits of executive directors and certain senior executives, taking account of best practice including reporting to shareholders, as more particularly described below. 2. MEMBERSHIP (i) (ii) The Remuneration Committee shall be appointed by the Board from time to time and shall comprise of a minimum of 3 non-executive directors. (ii) A quorum shall be any two members. 3. ATTENDANCE (i) (ii) The Chief Executive will normally attend meetings, except when his own remuneration or benefits are being considered. (ii) The Secretary of the Remuneration Committee shall be the Company Secretary. 4. FREQUENCY The Remuneration Committee shall meet at least twice a year. 5. RESPONSIBILITY AND POWERS The Remuneration Committee s specific responsibilities and powers shall, having regard to the Stock Exchange Listing Rules, include the following: (i) The determination from time to time, in respect of executive directors (and certain other senior executives as may be decided between the Remuneration Committee and the Group Chief Executive), all matters relating to: a) remuneration, including bonuses and long term incentives; b) pension benefits; c) grants of share options or awards; d) terms and conditions of employment including the directors car policy; and e) payments on termination of employment.

(ii) The exercise of the powers of the Board in relation to: a) Any employee share arrangements: 1) to amend and vary such arrangements in accordance with such provisions as the Remuneration Committee may deem appropriate; 2) to approve new share arrangements; and 3) to grant entitlements and options b) Any long term incentive arrangements: 1) to amend and vary such arrangements however the Remuneration Committee may deem appropriate; 2) to approve new arrangements; and 3) to grant entitlements and if appropriate to include the granting or purchase of shares as part of such arrangements. c) Pension arrangements and other similar employee benefits of the Company and its subsidiaries whether currently in force or to be adopted including the approval of any changes to the rules of such arrangements. d) The review, authorisation, approval and execution of all documents (including service contracts), deeds, acts and things as the Remuneration Committee may consider necessary or desirable in connection with or in relation to or to effect any of the matters detailed in 5. (ii)a), (ii)b) and (ii)c) above. (iii) Receive from time to time by way of information, details of senior management remuneration, pension benefits, share options and terms of conditions of employment.