SPT Energy : Terms of Reference for the Audit Committee 2017-08-24

(the "Company")

Constitution

1. The board of directors (the "Board") of the Company hereby resolves to establish a committee of the Board to be known as the Audit Committee (the "Committee").

   Membership

2. The Committee shall be appointed by the Board from amongst the non-executive directors of the Company and shall consist of not less than three members, a majority of whom should be independent non-executive directors of the Company.

   Chairman

3. The chairman of the Committee (the "Chairman") shall be appointed by the Board and should be an independent non-executive director.

4. The Chairman shall chair the meetings of the Committee.

5. In the absence of the Chairman, the remaining members present shall elect one of themselves to chair the meetings of the Committee.

6. The Chairman shall attend the annual general meeting of the Company and be prepared to respond to any question from the shareholders on the Committee's activities.

   Secretary

7. The Company secretary shall be the secretary of the Committee (the "Secretary").

8. The Secretary or his/her delegate shall attend meetings of the Committee to take minutes.

9. In the absence of the Secretary, the members present at the meeting shall elect another person as the Secretary.

   Authority

10. The Committee is authorized by the Board to investigate any activity within its terms of reference. It is authorized to review, and to seek any information it requires from any employee, auditors (external and internal) and/or external advisers, who are directed to co-operate with any request made by the Committee.

11. The Committee is authorised by the Board to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary.

    Duties

12. The duties of the Committee shall be:

13. to be primarily responsible for making recommendation to the Board on the appointment, reappointment and removal of the external auditor, and to approve the remuneration and terms of engagement of the external auditor, and any questions of its resignation or dismissal;

14. to review and monitor the external auditor's independence and objectivity and the effectiveness of the audit process in accordance with applicable standard. The Committee should discuss with the auditor the nature and scope of the audit and reporting obligations before the audit commences;

15. to develop and implement policy on engaging an external auditor to supply non-audit services. For this purpose, "external auditor" includes any entity that is under common control, ownership or management with the audit firm or any entity that a reasonable and informed third party knowing all relevant information would reasonably conclude to be part of the audit firm nationally or internationally. The Committee should report to the Board, identifying and making recommendations on any matters where action or improvement is needed;

16. to monitor integrity of the Company's financial statements and annual report and accounts, half-year report and, if prepared for publication, quarterly reports, and to review significant financial reporting judgments contained in them. In reviewing these reports before submission to the Board, the Committee should focus particularly on:-

17. any changes in accounting policies and practices;

18. major judgmental areas;

19. significant adjustments resulting from audit;

20. the going concern assumptions and any qualifications;

21. compliance with accounting standards; and

22. compliance with the Listing Rules and legal requirements in relation to financial reporting;

23. regarding (d) above:-

24. members of the Committee should liaise with the Board and senior management and the Committee must meet, at least twice a year, with the Company's auditors; and

25. the Committee should consider any significant or unusual items that are, or may need to be, reflected in the report and accounts, it should give due consideration to any matters that have been raised by the Company's staff responsible for the accounting and financial reporting function, compliance officer or auditors;

26. to review the Company's financial controls, risk management and internal control systems at least annually;

27. to discuss the risk management and internal control system with management and to ensure that management has performed its duties in establishing and maintaining effective systems. This discussion should include the adequacy of resources, staff qualifications and experience, training programs and budget of the Company's accounting, internal audit and financial reporting function;

28. to consider major investigation findings on risk management and internal control matters as delegated by the Board or on its own initiative and management's response to these findings;

29. where an internal audit function exists, to ensure co-ordination between the internal and external auditors, and to ensure that the internal audit function is adequately resourced and has appropriate standing within the Company, and to review and monitor its effectiveness;

30. to review the group's financial and accounting policies and practices;

31. to review the external auditor's management letter, any material queries raised by the auditor to management about the accounting records, financial accounts or systems of control and management's response;

32. to ensure that the Board will provide a timely response to the issues raised in the external auditor's management letter;

33. to review arrangements employees of the Company can use, in confidence, to raise concerns about possible improprieties in financial reporting, internal control or other matters, and to ensure that proper arrangements are in place for fair and independent investigation of these matters and for appropriate follow-up action;

34. to act as the key representative body for overseeing the issuer's relations with the external auditor;

35. to develop and review the Company's policies and practices on corporate governance and make recommendations to the Board;

36. to review and monitor the training and continuous professional development of directors and senior management;

37. to review and monitor the Company's policies and practices on compliance with legal and regulatory requirements;

38. to develop, review and monitor the code of conduct and compliance manual (if any) applicable to employees and directors;

39. to review the Company's compliance with the code and disclosure in the Corporate Governance Report;

40. to report to the Board on the matters in these terms of reference; and

41. to consider other topics, as defined by the Board. Quorum

42. A quorum necessary for the transactions of business shall be two members.

43. The Secretary shall ascertain, at the beginning of each meeting, the existence of any conflict of interest and minute them accordingly. The relevant member of the Committee shall not be counted towards the quorum and he/she must abstain from voting on any resolution of the Committee in which he/she and/or his/her associates have a material interest.

44. A duly 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.

    Frequency of meetings

45. Meetings shall be held not less than twice a year. The Committee must hold one meeting prior to each of the meetings of the Board at which the annual financial report and interim financial report of the Company will be considered and if thought fit, approved, respectively.

46. The external auditors may request a meeting if they consider that one is necessary.