COMPANY’S ORGANIZATIONAL STRUCTURE
4.4 Board committees
To assist the board of directors in conducting its roles more effectively, the board formed number of specialized committees whether in accordance with the requirements of the Companies Law, the Capital Market Authority Bylaws and its Regulations or in light of business needs in the company as follows:
4.4.1 Audit committee
The board of directors has established an audit committee in accordance with Article 38 of the Company’s Articles of Association and Clause 1 of the regulations on the Audit Committee of the company. Therefore, the audit committee shall comprise of three (3) members who are not members of the Executive Directors whether shareholders or others. The Ordinary General Assembly held on 22/12/1442H (corresponding to 01/08/2021G), appointed the members of the Audit committee based on the Board resolution issued on 22/10/1442H (corresponding to 03/06/2021G) for a new session ending at the end of the current session of the Board on 19/11/1445H (corresponding to 27/05/2024G). The Audit Committee shall comprise of the following members:
Table NO. (13): Members of audit committee
Name Position Status Membership Date
Rashid bin Suleiman Al-Rasheed Chairman of the Audit Committee Independent board member 22/12/1442H (corresponding to 01/08/2021G) Saad Al-Tayyar Member of the audit committee From outside the board 22/12/1442H (corresponding to 01/08/2021G) Firas Al-Harbi Member of the audit committee From outside the board 22/12/1442H (corresponding to 01/08/2021G) Source: The Company
Audit committee roles, responsibilities and powers:
In accordance with clause (b) of the Audit Committee Regulations, the Audit Committee is competent to monitor the Company’s business and verify the safety and integrity of its reports, financial statements and internal control regulations.
In particular, the functions of the Audit Committee include:
y Financial reports:
1. Study the company’s initial and annual financial statements before submitting them to the Board of Directors and provide its opinion and recommendation in this regard, to ensure their integrity, fairness and transparency.
2. Provide a technical opinion - at the request of the Board of Directors – on whether the Board’s report and the company’s financial statements are fair, balanced and understandable and include information that allows shareholders and investors to evaluate the company’s financial position, performance, business model and strategy.
3. Examine any important or unfamiliar issues included in the financial reports.
4. Careful examination of any issues raised by chief financial officer or whoever assumes his/her duties, compliance officer, or auditor.
5. Verify the accounting estimates affecting material issues contained in the Financial Reports.
6. Verify the accounting estimates used in the company and provide its opinion and recommendation to the Board of Directors in this regard.
y Internal audit:
1. Examine and review the company’s internal and financial control and risk management systems.
2. Examine the internal audit reports and follow up the implementation of corrective actions for the notes contained therein.
3. Oversee and supervise the performance and activities of the internal auditor of the company to verify the availability of necessary resources and their effectiveness in performing the jobs and tasks assigned to them. If there is no internal auditor, the committee must submit its recommendation to the Board regarding the need for appointing an internal auditor.
4. Recommend the Board of Directors to appoint an internal audit unit or department director or internal auditor and suggest his remuneration.
y Auditor:
1. Recommend the Board of Directors to nominate and dismiss auditors, determine their salary, and evaluate their performance, after verifying their independence and reviewing the scope of their work and terms of their contract.
2. To verify the independence of the auditor and it’s being objective and fair, and how far the auditing performance is effective, taking into consideration the relevant rules and standards.
3. Verify the independence of the company’s auditor and his work and verify whether he/she provides technical or administrative works outside the scope of audit work and provide its views in this regard.
4. Answer the company’s auditor’s inquiries.
5. Examine the auditor’s report and his/her notes on the financial statements and follow up on the actions taken in this regard.
y Ensure compliance:
1. Review the results of reports of supervisory authorities and verify that the company has taken the necessary actions in this regard.
2. Verify the company’s compliance with relevant laws, regulations, policies and instructions.
3. Review the contracts and transactions to be conducted by the company with related parties and provide its views in this regard to the Board of Directors.
4. Raise the issues it deems necessary to be acted upon to the Board of Directors and provide its recommendations for the actions to be taken.
Audit Committee meetings
y In accordance with article 57 of the Corporate Governance Regulations and clause (d) of the Audit Committee Regulations with the Company, the Audit Committee shall meet periodically every three months.
y The following table shows the meetings of the Audit Committee during 2019G, 2020G and 2021G and 2022G.
Table NO. (14): Number of audit committee meetings during the last three years until the prospectus date
2019G 2020G 2021G 2022G
Audit committee 7 8 7 2
Source: The Company
4.4.2 Nominations and remunerations committee
The Nominations and Remunerations Committee was formed in accordance with the requirements of the Corporate Governance Regulations issued by the Capital Market Authority and the Remuneration and Nominations Committee Regulations with the company provided that it is formed based on a resolution of the Company’s Board of Directors from non-executive board members, provided that at least two of them are independent members. The current Nominations and Remunerations Committee consists of three (3) members in addition to the Secretary of the Committee. The Nominations and Remunerations Committee was formed pursuant to Board Resolution No. 260-06/2021 dated 10/22/1442H (corresponding to 03/06/2021G) with the term of membership is coinciding with the Board’s session and ending at the end of the session on 19/11/1445H (corresponding to 27/05/2024G).
On 22/01/1443H (corresponding to 30/08/2021G), the Board of Directors decided to approve the recommendation of the Nominations and Remunerations Committee to appoint Khaled Al-Soor as a member of the Nominations and Remunerations Committee, provided that the appointment takes effect from the date of the Board’s resolution. The committee is composed of the following members:
Table NO. (15): Members of nominations and remunerations committee
Name Position Status Membership Date
Fahd bin Abdullah Al Samih Chairman of the Nominations and
Remunerations Committee Independent board member 22/10/1442H
(corresponding to 03/06/2021G) Rashid bin Suleiman Al-Rasheed Member of the Nominations and
Remunerations Committee Independent board member 22/10/1442H
(corresponding to 03/06/2021G)
Ayoub Al-Omrani Member of the Nominations and
Remunerations Committee From outside the Board 22/10/1442H
(corresponding to 03/06/2021G)
Khaled Al-Soor Member of the Nominations and
Remunerations Committee Independent board member 22/10/1442H
(corresponding to 03/06/2021G) Source: The Company’s Management
Nominations and remunerations committee responsibilities
In accordance with clause (b) of the Company’s Nominations and Remunerations Committee, the Committee is competent:
1. To recommend to the Board of Directors nomination and re– nomination of its members pursuant to the approved policies and criteria, taking into consideration that there shall not be nominated any person convicted in a crime affecting honesty.
2. To carry out an annual review of the required needs of skills for the membership of the Board of Directors and the Executive Management and prepare a description of the capabilities and qualifications required for of executive, non-executive, independent and senior executive members, including the determination of the time to be allocated by a member to the work of the Board and the amount of Remunerations.
3. To review the structure of the Board of Directors and the Executive Management and to present recommendations in connection with any changes that should be made.
4. To determine the points of weakness and strength at the Board of Directors, and to propose solutions for handling the same in accordance with the Company’s interest.
5. To verify annually the independence of the independent members and the non-existence of any conflict of interest if the member acts as member of the Board of Directors of another Company.
6. To prepare a clear policy for the remuneration of the members of the Board of Directors, the Committees thereof, and the Executive Management, and to raise such policy to the Board of Directors to consider it in preparation for having it approved by the General Assembly, provided that, in such policy, there shall be observed the following performance–related criteria, disclosing the same and verifying the implementation thereof.
7. To set out a clear relationship between the remuneration provided and the applicable remuneration policy and
8. To review periodically the remunerations policy, evaluate its effectiveness in achieving its objectives and its compatibility with the size, nature and degree of risk of the company. The purpose of the remunerations was to induce members of the Board and Executive Directors to make the company successful and grow in the long term, such as linking the changing portion of the bonuses to long-term performance, taking into account the practices of other companies in determining remunerations while avoiding the resulting unjustified rise in remunerations and compensation.
9. To recommend to the Board of Directors the remuneration of the members of the Board of Directors, the Committees thereof, and the senior executive officers at the Company based on the approved policy.
10. To recommend the approval or refusal to change the titles of certain senior executives in accordance with recommendations received from the executive management of the company.
11. To prepare the rules, regulations and controls under which remunerations are awarded to the general staff of the company in accordance with the annual reports of the performance and determine the remuneration based on the level of the title, the functions and responsibilities of the incumbent, the scientific qualification, practical experience, skills and level of performance.
12. To propose clear policies and criteria of the membership of the Board of Directors and Executive Management.
13. To set a description of the capacities and qualifications required for membership of the Governing Council and for executive management positions.
14. To set the special procedures in case the office of a member of the Board of Directors or a senior executive officer becomes vacant.
15. To attract, retain and motivate professional efficient members, without exaggeration.
16. The policy shall handle suspension or recovery of remuneration already paid if it is found that it has been decided based on inaccurate information provided by a member of the Board of Directors or the Executive Management, to prevent making use of the job position to gain undue remuneration.
17. To regulate granting shares in the Company to the members of the Board of Directors and the Executive Management, whether under new issues or in the form of shares purchased by the Company.
18. To responsible for, and taking into account, nomination procedures:
y When nominating members of the Board of Directors, the conditions and rulings issued by the Capital Market Authority and the requirements specified by the Board shall be respected.
y The Committee shall seek, on a spatial basis, to outnumber the number of candidates for the Board whose names are before the General Assembly so that the General Assembly has the opportunity to choose from among the candidates.
Meeting of nominations and remunerations committee during the last three years
y In accordance with clause (c) of the nominations and remunerations committee Regulations, the Committee shall meet at a minimum once a year.
y The table below sets the number of meetings of the Nominations and Remunerations Committee during the years 2019G, 2020G and 2021G (until the date of this Prospectus):
Table NO. (16): Number of nominations and remunerations committee meetings during the last three years until the prospectus date
2019G 2020G 2021G 2022G
Nominations and remunerations committee 3 5 9 1
Source: The Company
4.4.3 Development and investment committee
The Development and Investment Committee consists of three (3) members and was formed in the minutes of the Board of Directors meeting dated 22/10/1442H (corresponding to 03/06/2021G). The Development and Investment Committee expires at the end of the current session of the Board of Directors on 19/11/1445H (corresponding to 27/05/2024G). On 30/08/2021G, the Board of Directors decided to approve the recommendation of the Nominations and Remunerations Committee to appoint Ahmed bin Ali Al-Zayat (an external member) to the Development and Investment Committee, provided that this appointment takes effect from the date of this resolution. Accordingly, the Development and Investment Committee has become composed of the following members:
Table NO. (17): Members of development and investment committee
Name Position Status Membership Date
Abdul Ilah Nasir Al Zarah Chairman of the Development
and Investment Committee Independent board member 22/10/1442H (corresponding to 03/06/2021G) Abdullah Omar Al-Suwailem Member of the Development
and Investment Committee Independent board member 22/10/1442H (corresponding to 03/06/2021G)
Ayoub Al-Omrani Member of the Development
and Investment Committee From outside the Board 22/10/1442H (corresponding to 03/06/2021G) Ahmed Bin Ali Al-Zayat Member of the Development
and Investment Committee From outside the Board 22/10/1442H (corresponding to 03/06/2021G) Source: The Company’s Management
Development and Investment Committee Responsibilities
The tasks and responsibilities of this Committee include:
y Work with company management to set strategy for development and investment.
y General supervision of the development and investment activities of the company.
y Study and assess the proposed investment opportunities.
y Study of periodic reports from executive management on the functioning of approved investment opportunities
Meetings of Development and Investment Committee
The Committee shall meet as required by the Company and there shall be no written and approved regulation clarifying the tasks of the Development and Investment Committee. The Committee held seven (7) meetings during the fiscal year ending 31 December 2021G. The Committee also held two meetings (2) during the fiscal year ending 31 December 2022G.
Table NO. (18): Number of development and investment committee meetings during the last three years until the prospectus date
2021G 2022G
DEVELOPMENT AND INVESTMENT COMMITTEE 7 2
Source: The Company