Terms of Business

STANDARD TERMS OF BUSINESS FOR ANDERSON & CO.

The following standard terms of business apply to all engagements accepted by Anderson & Co. All work carried out is subject to these terms except where changes are expressly agreed in writing.

1. Professional obligations

1.1         We will observe the Bye-laws, regulations and ethical guidelines of the ICAEW and accept instructions to act for you on the basis that we will act in accordance with those guidelines. Copies of these requirements are available for inspection in our offices.

1.2         Where you give us confidential information we shall at all times keep it confidential except as required by law or as provided for in regulatory, ethical or other professional pronouncements applicable to this engagement.

1.3         We reserve the right to act during this engagement for other clients whose interest may be adverse to yours. We will notify you immediately should we become aware of any conflict of interest to which we are subject in relation to you.

2. Investment Services

2.1      Although we are not authorised by the Financial Services Authority (FSA) to conduct investment business, we are licensed by the ICAEW to provide certain limited investment services where these are complementary to or arise out of the professional services we are providing to you.

2.2        In particular we may:

• advise you on investments generally, but not recommend a particular investment or type of investment;
• refer you to a permitted third party (PTP) (an independent firm authorised by the FSA), assist you and the PTP during the course of any advice given by that party and comment on, or explain the advice received (but not make alternative recommendations). The PTP will issue you with his own terms and conditions letter, will be remunerated separately for his services and will take full responsibility for compliance with the requirements of the Financial Services and Markets Act 2000;
• advise you in connection with the disposal of an investment, other than your rights in a pension policy or scheme;
• advise and assist you in transactions concerning shares or other securities not quoted on the recognized exchange;
• assist you in making arrangements for transactions in investments in certain circumstances; and
• manage investments or act as trustee (or donee of a power of attorney) where decisions to invest are taken on the advice of an authorised person.

2.3        We may also, on the understanding that the shares or other securities of the company are not publicly traded:

• advise the company, existing or prospective shareholders in relation to exercising rights, taking benefits or share options, valuations and methods of such valuations;
• arrange any agreements in connection with the issue, sale or transfer of the company’s shares or other securities;
• arrange for the issue of new shares; and
• act as the addressee to receive confirmation of acceptance of offer documents etc.

2.4        The firm may receive commission from any introduction to a PTP in connection with the above, in which case you will be fully informed of the expected size and nature of such commission at the time of the introduction. Such commission will be held in our client’s account until we receive instructions from you as to how it should be treated. In the event of no such instructions being received, we may use such monies against any fees that have been outstanding for 30 days or more and concerning which you are not in dispute with us.

2.5        We may also request that you allow us to retain such commissions to cover our costs in connection with the above, but permission will be sought separately from you in these circumstances. If you are dissatisfied in any way about our services described in this section, you should follow the procedures set out in the “Help us to give you the right service” section of this letter and, in the unlikely event that we cannot meet our liabilities to you, you may be able to claim compensation under the Chartered Accountants Compensation Scheme.

2.6        To enable us to provide you with a proper service there may be occasions when we will need to contact you without your express permission concerning investment business matters. For example, it may be in your interests to sell a particular investment and we would wish to inform you of this. We may therefore contact you in such circumstances but would only do so in our normal office hours of 9.00am to 5.00pm. We shall of course comply with any restrictions you may wish to impose which you notify to us in writing.

3.  Commissions of other benefits

3.1        Commissions or other benefits may sometimes become payable to us in respect of introductions to other professionals or transactions we arrange for you, in which case you will be notified in writing of the amount, the terms of payment and receipt of any such commissions or benefits. Your consent to such commissions or other benefits being retained by us without our being liable to account to you for any such amounts will not be sought.

4.  Client Monies

4.1        We may, from time to time, hold money on your behalf. Such money will be held in trust in a client bank account which is segregated from the firm’s funds. The account will be operated and all funds dealt with in accordance with the Clients’ Money Regulations of the ICAEW.

4.2        In order to avoid an excessive amount of administration, interest will only be paid to you where the amount of interest that would be earned on the balances held on your behalf in any calendar year exceeds £25. Any such interest would be calculated using the prevailing rate applied by Barclays Bank Plc for small deposits subject to the minimum period of notice for withdrawals. Subject to any tax legislation, interest will be paid gross.

4.3        If the total sum of money held on your behalf exceeds £10,000 for a period of more than 30 days, or such sum is likely to be held for more than 30 days, then the money will be placed in a separate interest-bearing client bank account designated to you. All interest earned on such money will be paid to you. Subject to any tax legislation interest will be paid gross.

5.  Fees

5.1       Our fees are computed on the basis of time spent on your affairs by the principals and our staff and on the levels of skill and responsibility involved.

5.2       If it is necessary to carry out work outside the responsibilities outlined in this letter it will involve additional fees. Accordingly we would like to point out that it is in your interests to ensure that your records etc. are completed to the agreed stage.

5.3       Our terms relating to payment of amounts invoiced and not covered by standing orders, where appropriate, are strictly 14 days net. Interest will be charged on all overdue debts at the rate for the time being applicable under the Late Payment of Commercial Debts (Interest) Act 1998.

6.  Retention of and access to records

6.1        During the course of our work we will collect information from you and others acting on your behalf and will return any original documents to you following the preparation of accounts and or tax or other returns. You should retain these records for at least seven years from the end of the accounting year to which they relate.

6.2        Whilst certain documents may legally belong to you, we intend to destroy correspondence and other papers that we store which are more than seven years old, other than documents which we consider to be of continuing significance. If you require retention of any document you must notify us of that fact in writing.

7. Quality Control

7.1        As part of our ongoing commitment to providing a quality service, our files are periodically subject to an independent regulatory or quality review. Our reviewers are highly experienced and professional people and are, of course, bound by the same requirements of confidentiality as our principals and staff.

8. Help us to give you the right service

8.1         If at any time you would like to discuss with us how our service to you could be improved, or if you are dissatisfied with the service you are receiving, please let us know by telephoning John Anderson.

8.2         We undertake to look into any complaint carefully and promptly and to do all we can to explain the position to you. If you feel that we have given you a less than satisfactory service we will undertake to do everything reasonable to address your concerns. If you are still not satisfied you may of course take up matters with the Institute of Chartered Accountants in England and Wales at the following address:

Professional Conduct Department

ICAEW

Chartered Accountants Hall

Moorgate Place

London

EC2P 2BJ

9.  Applicable Law

9.1        This engagement letter is governed by and construed in accordance with English law. The Courts of England will have exclusive jurisdiction in relation to any claim, dispute or difference concerning this engagement letter and any matter arising from it. Each party irrevocably waives any right it may have to object to any action being brought in those courts, to claim that the action has been brought in an inappropriate forum, or to claim that those courts do not have jurisdiction.

10. Internet Communication

10.1    Internet communications are capable of data corruption and therefore we do not accept any responsibility for changes made to such communications after their dispatch. It may therefore be inappropriate to rely on advice contained in an e.mail without obtaining written confirmation of it. We do not accept responsibility for any errors or problems that may arise through the use of internet communication and all risks connected with sending commercially sensitive information relating to your business are borne by you. If you do not agree to accept this risk you should notify us in writing that e.mail is not an acceptable means of communication.

10.2     It is the responsibility of the recipient to carry out a virus check on any attachments received.

11. Data Protection Act 1998

11.1     We may obtain, use, process and disclose personal data about you in order that we may discharge the services agreed under this engagement letter and for other related purposes including updating and enhancing client records, analysis for management purposes and statutory returns, crime prevention and legal and regulatory compliance. You have a right of access under data protection legislation to the personal data that we hold about you. We confirm that when processing data on your behalf we will comply with the provisions of the Data Protection Act 1998. For the purposes of the Data Protection Act 1998, the Data Controller in relation to personal data supplied about you is John Anderson.

12. Contracts (Rights of Third Parties) Act 1999

12.1    Persons who are not party to this agreement shall have no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this agreement. This clause does not affect any right or remedy of any person which exists or is available otherwise than pursuant to that Act.

12.2    The advice that we give to you is for your sole use and does not constitute advice to any third party to whom you may communicate it. We accept no responsibility to third parties for any aspect of our professional services or work that is made available to them.

13. Money Laundering

13.1   In common with all accountancy and legal practices, the firm is required by the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2007 to:

• Maintain identification procedures for all new clients;
• Maintain records of identification evidence obtained; and
• Report, in accordance with the relevant legislation and regulations.

13.2     We have a duty under s. 330 of the Proceeds of Crime Act 2002 to report to the Serious Organised Crime Agency (SOCA) if we know, or have reasonable cause to suspect that you, or anyone connected with your business, are or have been involved in money laundering. Failure on our part to make a report where we have knowledge or reasonable grounds for suspicion would constitute a criminal offence.

13.3     The offence of money laundering is defined by s. 340 (11) of the Proceeds of Crime Act and included concealing, converting, using or possessing the benefits of any activity that constitutes a criminal offence in the UK. It also includes involvement in any arrangement that facilitates the acquisition, retention, use or control of such a benefit.

This definition is very wide and would include such crimes as:

• deliberate tax evasion;
• deliberate failure to inform the tax authorities of known underpayments or excessive repayments;
• fraudulent claiming of benefits or grants; or
• obtaining a contract through bribery.

13.4     We are obliged by law to report any instances of money laundering to SOCA without your knowledge or consent. In fact, we may commit the criminal offence of tipping off under s. 333 of the Proceeds of Crime Act if we were to inform you that a report had been made. In consequence neither the firm’s principals nor staff may enter into any correspondence or discussions with you regarding such matters.

13.5     We are not required to undertake work for the sole purpose of identifying suspicions of money laundering. We shall fulfill our obligations under the Proceeds of Crime Act 2002 in accordance with the guidance published by the ICAEW.

14. Limitation of liability

14.1    We will provide our professional services with reasonable care and skill. However, we will not be held responsible for any losses arising from the supply by you or others of incorrect or incomplete information or your or others’ failure to supply any appropriate information or your failure to act on our advice or respond promptly to communications from us or other relevant authorities.

14.2    You will not hold us, our principals and staff, responsible, to the fullest extent permitted by law, for any loss suffered by you arising from any misrepresentation (intentional or unintentional) supplied to us orally or in writing in connection with this agreement. You have agreed that you will not bring any claim in connection with services we provide to you against any of our partners or employees personally.

14.3    Our work is not, unless there is a legal or regulatory requirement, to be made available to third parties without our written permission and we will accept no responsibility to third parties for any aspect of our professional services or work that is made available to them.

15. Provision of Service Regulations

15.1     We are registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales. Details of our audit registration can be viewed at www.auditregister.org.uk under reference C008450250.

15.2     Our professional indemnity insurer is Zurich Insurance Plc of 3 Minster Court, Mincing Lane, London, EC3R 7DD. The territorial coverage is worldwide excluding professional business carried out from an office in the United States of America or Canada and excludes any action for a claim brought in any court in the United States of America or Canada.