HC-3.2.1

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The board must establish an audit committee of at least three directors of which the majority must be independent including the Chairman. The committee must:

(a) Review the licensee's accounting and financial practices;

(b) Review the integrity of the licensee's financial and internal controls and financial statements (particularly with reference to information passed to the Board — see HC-1.2.10). The information needs of the Board to perform its monitoring responsibilities must be defined in writing, and regularly monitored by the Audit Committee;

(c) Review the licensee's compliance with legal requirements;

(d) Recommend the appointment, compensation and oversight of the licensee's external auditor; and

(e) Recommend the appointment of the internal auditor.

January 2013