(1) Subject to the other provisions of this section, the directors of each public-interest entity shall establish an audit committee for the entity.
(2) The majority of the members of the audit committee shall be non executive directors of the public-interest entity, that is to say, directors -
(a) the terms of appointment of whom indicate or state that they are being appointed in a non-executive capacity, and
(b) who otherwise possess the requisite degree of independence (particularly with regard to each of them satisfying the condition in subsection (3)) so as to be able to contribute effectively to the committee's functions.
(3) The condition referred to in subsection (2)(b) is that the director does not have, and at no time during the period of 3 years preceding his or her appointment to the committee did have -
(a) a material business relationship with the public-interest entity, either directly, or as a partner, shareholder, director (other than as a non-executive director) or se
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