Hostelworld : Audit Committee - Terms of Reference

DATED 1 December 2021

HOSTELWORLD GROUP PLC

AUDIT COMMITTEE - TERMS OF REFERENCE

HOSTELWORLD GROUP PLC (the "Company")

AUDIT COMMITTEE - TERMS OF REFERENCE

CONSTITUTION

1. The Committee has been established by resolution of the board of directors of the Company (the "Board") and is to be known as the Audit Committee (the "Committee").
2. The Committee shall consist of a minimum of 2 members (or 3 members if the Company is a FTSE 350 company) who are independent non-executive directors of the Company appointed by the Board on the recommendation of the Nomination Committee and in consultation with the Committee Chairman. The Chairman of the Committee, who shall be an independent non-executive director, shall be appointed by the Board on the recommendation of the Nomination Committee which shall determine the period for which he shall hold office. In the absence of the Committee Chairman and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting. The Chairman of the Board shall not be eligible to be appointed to the Committee.
3. Appointments to the Committee shall be for a period for up to three years, which may be extended by no more than two further three year periods, provided the members continue to be independent.
4. The Board shall regularly review the membership of the Committee to ensure that membership is refreshed and undue reliance is not placed on particular individuals.
5. The Company Secretary or his or her nominee shall act as the Secretary of the Committee and will ensure that the Committee receives information and papers in a timely manner to enable full and proper consideration to be given to issues.
6. At least one member of the Committee should have recent and relevant financial experience ideally with a professional qualification from one of the professional accountancy bodies.
7. The Committee as a whole should have competence relevant to the sector in which the Company operates
8. The quorum for decisions of the Committee shall be any 2 members at least one of whom must have recent and relevant financial experience.

ROLE

9. The Committee should carry out the duties below for the Company, major subsidiary undertakings and the Group as a whole, as appropriate.

Financial reporting

9.1 The Committee shall monitor the integrity of the financial statements of the Company including its annual and half-yearly reports, interim management statements (if applicable), preliminary results' announcements (if applicable) and any other formal announcement relating to its financial performance, reviewing

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significant financial reporting issues and judgements which they contain having regard to matters communicated to it by the external auditor.

1. The Committee shall review and challenge where necessary:
2. 1. the consistency of, and any changes to, accounting policies both on a year on year basis and across the Company/Group;
   2. the methods used to account for significant or unusual transactions where different approaches are possible;
   3. whether the Company has followed appropriate accounting standards and made appropriate estimates and judgements, taking into account the views of the external auditor;
   4. the clarity and completeness of disclosure in the Company's financial reports and the context in which statements are made;
   5. significant adjustments resulting from the audit;
   6. the going concern assumption;
   7. compliance with accounting standards;
   8. compliance with stock exchange and other legal requirements; and
   9. all material information presented with the financial statements, such as the operating and financial review and the corporate governance statement (insofar as it relates to the audit and risk management).
3. The Committee shall review the annual financial statements of the pension funds where not reviewed by the Board as a whole.
4. Where the Committee is not satisfied with any aspect of the proposed financial reporting by the Company, it shall report its views to the Board.
5. Whenever practicable, the Committee shall review any other statement containing financial information for which Board approval is required.

Narrative reporting

9.6 Where requested by the Board, the Committee should review the content of the annual report and accounts and advise the Board on whether, taken as a whole, it is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy.

Internal controls and risk management systems

9.7 The Committee shall:

1. maintain a formal risk register for the group, recording financial, operational and business risks across the group, and review this at least twice per annum;

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1. advise the board on the Company's overall risk appetite, tolerance and strategy;
2. monitor progress of the Company in addressing and managing the identified risks;
3. keep under review the adequacy and effectiveness of the Company's internal financial controls and internal control and risk management systems;
4. update the Board as to the FPP risks remaining, notwithstanding control procedures in place;
5. review reports received from the Company's management on the effectiveness of the internal control and risk management systems established and the conclusions of any testing carried out by the internal or external auditors;
6. annually receive and review a report from the Company's management assessing the Company's compliance with the UK Corporate Governance Code;
7. review and approve the statements to be included in the annual report concerning internal controls and risk management;
8. review the challenge where necessary the register of climate relates risks and opportunities maintained by the CFO (and review this register at least twice annually);
9. monitor the achievement of metrics and targets for addressing climate-related issues; and
10. review and approve the content of disclosures related to the recommendations of the Taskforce on Climate-related Financial Disclosures.

Compliance and fraud

9.8 The Committee shall:

1. perform an annual assessment of the Company's compliance with the UK Corporate Governance Code, and confirm to the Board that compliance is complete, or report to the Board any instance of non-compliance;
2. review the Company's procedures for detecting fraud;
3. review the Company's systems and controls for the prevention of bribery and receive and review reports on non-compliance;
4. review the adequacy and effectiveness of the Group's anti-money laundering systems and controls and receive and review regular reports from the money laundering reporting officer; and
5. review the adequacy and effectiveness of the Group's compliance function and

receive and review regular reports from the compliance officer.

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Internal audit

9.9 The Committee shall consider annually whether there is a need for an internal audit function, taking into account whether there are any trends or current factors relevant to the Company's activities, markets or other aspects of its external environment that have increased, or are expected to increase, the risks faced by the Company.

External Audit

9.10 The Committee shall:

1. consider and make recommendations to the Board, to be put to shareholders for approval at the annual general meeting, in relation to the appointment, reappointment and removal of the Company's external auditor. The Committee shall oversee the selection process for a new external auditor and if an external auditor resigns the Committee shall investigate the issues leading to this and decide whether any action is required;
2. ensure that at least once every ten years the audit services contract is put out to tender to enable the Committee to compare the quality and effectiveness of the services provided by the incumbent external auditor with those of other audit firms; and in respect of such tender oversee the selection process and ensure that all tendering firms have such access as is necessary to information and individuals during the duration of the tendering process;
3. oversee the relationship with the external auditor including (but not limited to):
4. 1. approve their remuneration, whether fees for audit or non-audit services and that the level of fees is appropriate to enable an adequate audit to be conducted;
   2. approval of their terms of engagement, including any engagement letter issued at the start of each audit and the scope of the audit;
   3. reviewing and monitoring their independence and objectivity taking into account relevant UK law, professional and regulatory requirements and the relationship with the auditor as a whole, including the provision of any non- audit services;
   4. satisfying itself that there are no relationships (such as family, employment, investment, financial or business) between the auditor and the Company (other than in the ordinary course of business) which could materially adversely affect the auditor's independence and objectivity taking into the relevant Ethical Standards for Auditors;
   5. agreeing with the Board a policy on the employment of former employees of the Company's external auditor, then monitoring the implementation of this policy;

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