egetæpper a/s Audit Committee TERMS OF REFERENCE The Audit Committee is appointed by - and among the Board of Directors. The committee reports to the Board of Directors and cannot make decisions on behalf of the Board of Directors. The committee appoints its chairman. The committee adopts its own rules of procedure, which must also meet the recommendations of the Committee on Corporate Governance. The purpose of the Committee is: A: Auditing according to the Public Accountants Act § 31 1. to notify the overall supreme governing body (the Board of Directors) of the outcome of the statutory audit, 2. to monitor the financial reporting process, 3. to monitor the effective operation of the company’s control- and risk management systems, 4. to monitor the statutory audit of the annual report and quality control of the auditor, 5. to monitor and control the auditor’s independence, including the approval of delivery of non-audit services from the auditor and 6. to be responsible for the process of selection and appointment of the auditor for election. B: Conditions for nomination 1. to describe the qualifications and the time required to hold a vacant post on the Board, taking into account the skills, knowledge and experience that already exist within the Board of Directors and the Executive Management, 2. correspondingly to describe the qualifications required for a possible vacant post as Executive Manager, 3. to consider candidate proposals for vacancies on the Board of Directors and Executive Management, submitted by relevant persons including shareholders and members of the Board of Directors and Executive Management and 4. to recommend candidates to the Board of Directors for vacancies in the Board of Directors and the Executive Management. C: Remuneration conditions 1. to recommend the remuneration policy regarding the Board of Directors and the Executive Management to the approval of the Board of Directors and 2. to submit proposals to the Board of Directors regarding remuneration for members of the Board of Directors and the Executive Management and to ensure that the remuneration is consistent with the company remuneration policy.
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