The HALO Trust
Audit and Remuneration Committee
Established under Article 29 of the Articles of Association
1. Appointment and membership
The Audit Committee (the “Committee”) is appointed by the Board of HALO (“the Board”) from the members of the Board.
A quorum shall be two members for any meeting. In the event of difficulty in achieving a quorum, Board members who are not members of the Committee may be co opted as members for individual meetings, provided the majority of the quorum are full members of the Committee.
Board members who are not members of the Committee may attend meetings where relevant after first liaising with the Committee Chair.
The Chair of the Committee shall be appointed by the Board.
In order to perform his or her role effectively, each Committee member should obtain an understanding of the detailed responsibilities of Committee membership as well as the HALO business, operations and risks.
2. Attendance of non-members at meetings
The Chief Executive Officer, Finance Director and a representative of the external auditor shall attend meetings at the invitation of the Committee. Other members of management may also be invited to attend meetings.
The Committee shall meet with the external auditor at least once a year without the presence of management.
3. Frequency of meetings
Meetings shall be held at least two times a year and, where appropriate, will coincide with key dates in the Trust’s financial reporting cycle.
The external auditor may request a meeting if they consider that one is necessary.
4. Delegated Authority
The Committee is authorised by the Board to investigate any activity within these terms of reference and, within its scope of responsibilities, to seek any information it requires and to ensure the attendance of management representatives at meetings as appropriate.
The Committee has the authority to obtain outside legal or independent professional advice. The advisers may attend meetings as necessary and the cost of the advisers shall be borne by HALO.
5. The Committee’s Responsibilities
The responsibilities of the Committee are set out below:
1) External audit
a. To assess annually the qualification, expertise and resources, and independence of the external auditor, taking account of relevant Ethical Standards and ensuring that key partners are rotated at appropriate intervals;
b. To assess annually the effectiveness of the audit process;
c. To review with management the audit fee and audit engagement letter and to ensure that the provision of non audit services does not impair the external auditor’s independence or objectivity;
d. If necessary, to develop and implement a policy on the supply of non audit services by the external auditor and to agree with management a policy on the employment of former employees of the firm’s external auditor and monitor its implementation;
e. To make appropriate recommendations, if considered necessary, to the Board regarding the continuation of the external auditor, to oversee the selection process for new auditors and, if an auditor resigns, to investigate the issues leading to this and decide whether any action is required;
f. To review the external auditor’s management letter and management’s response.
2) Internal controls
a. To review the effectiveness of the firm’s internal control framework,
b. To consider management’s response to any recommendations made by the external auditor and review with the external auditor any fraudulent or illegal acts, deficiencies in internal control or other similar issue, including reviewing the results of management’s investigation and follow up of any fraudulent acts
3) Annual financial statements
a. To review, and challenge where necessary, the actions and judgements of management in relation to the annual financial statements, paying particular attention to:
i. critical accounting policies and practices, and any changes in them
ii. decisions requiring a major element of judgement
iii. the extent to which the financial statements are affected by any unusual transactions in the year and how they are disclosed
iv. the clarity of disclosures
v. significant adjustments resulting from the audit
vi. the going concern assumption
vii. compliance with accounting standards and related guidance
viii. compliance with other legal requirements.
b. To review management’s statement on internal control systems prior to endorsement by the Board, the effectiveness of the firm’s internal control systems and procedures for compliance and whether management has discharged its duty to have an effective internal control system;
c. To review the content of the Risk Report in the Annual Report;
d. To review the letter of representation prior to management sign off.
Where requested by the Board, to provide advice on whether the Annual Report and financial statements, taken as a whole, is fair, balanced and understandable and provides the information necessary to assess the Trust’s performance, business model and strategy.
4) Report on Compliance
The Company Secretary will produce an annual report on compliance with Governance policies and procedures for endorsement by the Audit Committee.
5) Reporting procedures
The minutes of meetings of the Committee shall be circulated to all members of the Board.
The Committee shall, at least once a year, review its own performance, constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board for approval.
The Committee will be responsible for approving all remuneration terms and conditions for the Chief Executive Officer and the senior management team.
Effective from 31 January 2017