DEFICIT 13 2.1.12 RISKS RELATED TO THE INCREASE IN THE COMPANY’S CURRENT LIABILITIES AGAINST ITS
4.3 Company Committees
The Company’s committees, responsibilities and current members of each committee are described below:
4.3.1 Audit Committee
At its meeting held on 26/02/1443H (corresponding to 03/10/2021), the Regular General Assembly approved the formation of the Audit Committee, the determination of its functions, the controls of its work and the remuneration of its members for the new session from 14/10/2021G until the end of the session on 13/10/2024G. The Governing Council approved the Committee’s Regulations of 23/05/2017G.
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Table No. ( Members of the Audit Committee.
Name Job
Al-Mu’tasim Billah Zaki Allam* Committee Chairman (independent member)
Abdulaziz Awajan Al-Rashidi Member (from outside the board)
Karim Abdel Aziz Shnior Member (from outside the board)
Source: The Company
* On 17/10/2021G, the Board of Directors approved the resignation of Mr. Sultan Salahuddin Abdulazzim from his duties as Chairman of the Audit Committee due to his election as Chairman of the Board of Directors. The Board of Directors approved the appointment of Mr. Al-Mu’tasim Billah Zaki Allam as Chairman of the Audit Committee, on 08/07/1443H corresponding to 09/02/2022G The Ordinary General Assembly approved the Board of Directors’ decision to appoint Mr. Al-Mu’tasim Billah Zaki Allam as Chairman of the Audit Committee instead of the previous committee member Mr. Sultan Salahuddin Abdulazzim, and this appointment is effective from the date of the decision issued on 17/10/2021G until the end of the current committee’s work period on 13/10/2024G.
The Company announced on the Tadawul website that a member of the Audit Committee, Mr. Abdul Salam Majid Al Banna, has resigned from his membership in the Company’s Audit Committee, which he submitted on 06/09/2022G. The Board of Directors issued a resolution by passing on 07/09/2022G to approve the submitted resignation, provided that it takes effect from 07/09/2022G.
Duties and Responsibilities of the Audit Committee
y The Committee shall be directly responsible for appointing, fixing the fees and supervising the work of the independent auditors (including resolving disputes between management and the independent auditors regarding financial reporting) for the purpose of preparing the audit report or related work thereto.
y Review the scope and work plan in place by the independent auditors for each financial year based on the recommendation of the independent auditors.
y Review and approve all audit services provided by independent auditors.
y Review and approve fees and other work conditions related to the work of the independent auditors.
y Review and approve the disclosures required to be included in the financial statements in accordance with the regulatory requirements.
y Ensure the independence of the independent auditors.
y Review and discuss the Company’s quarterly and annual financial statements with management, the internal audit department, and independent auditors, including the disclosures made in the “Company Management Activity Report” and the independent auditors’ review of the financial statements before they are presented to shareholders, any government entity, or the stock market or the public.
y Regular and continuous review with the executive management, independent auditors, and the internal audit department on the following:
– Any dispute between the executive management and the independent auditors or the internal audit department regarding the preparation of the financial statements.
– Any difficulties during the review process (including any limitations on scope of work or access to requested information).
– Considering changes to the accounting principles and financial disclosure practices in the Company and approving it when necessary, according to the proposals of the independent auditors, the executive management, or the internal audit department.
– Review with executive management, independent auditors, the internal audit department, and the Company’s legal management, as needed, any legal, regulatory or compliance issues that could have a significant impact on the Company’s financial statements, including significant changes in accounting standards or rules.
y Discuss all of the following on a regular basis with the independent auditors (without the presence of the executive management):
– Their opinions on the quality, appropriateness, and acceptability of the Company’s accounting principles and financial disclosure practices, as applied in its financial reports.
– Completeness and accuracy of the Company’s financial statements.
y Approve the appointment and/or replacement of the Director of the Internal Audit Department.
y Review the performance of the internal audit department on an annual basis.
y Review the scope and work plan to be performed by the internal audit department, based on the recommendation of the independent auditors and the director of internal audit.
y In consultation with the independent auditors and the Internal Audit Department, the Committee shall:
– Review the adequacy of the Company’s internal control system and procedures designed to ensure compliance with applicable laws and regulations.
– Discuss the responsibilities, budget and staff needs of the internal audit department.
– Dealing with internal audit projects implemented by auditors from outside the Company.
y Review and approve all related party transactions.
y Review and approve any change in the Code of Conduct and Business Ethics for Board Members or Executive Directors.
y Review and evaluate the appropriateness of the annual report of the Board of Directors and recommending any change that the Committee deems appropriate.
y Evaluate its performance annually and submit a report on the evaluation results to the Board of Directors.
This evaluation includes an evaluation of the commitment and performance of each member of the committee to perform the tasks and responsibilities assigned thereto.
y Perform any duties or responsibilities that may be entrusted to it by the Board of Directors from time to time, within the scope of the Committee’s general purposes.
4.3.2 Nomination and Remuneration Committee
The Board of Directors decided on 27/8/1438H (corresponding to 23/5/2017G) to form the Nominations and Remunerations Committee, and the Board decided to combine them together to form the Nominations and Remunerations Committee.
It was approved by the general assembly of shareholders held on 22/10/1438H (corresponding to 16/07/2017G) to update its bylaw that includes its tasks, work regulations and the remuneration of its members. The current session of the Nominations and Remunerations Committee began with the new session of the Company’s Board of Directors from the date of October 14, 2021G until the end of the session on the date of 13/10/2024G. The following table shows the members of the Nomination and Remuneration Committee:
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Table No. ( Members of the Nominations and Remunerations Committee.
Name Position
Sari bin Ibrahim Al-Mayouf* Chairman
Salman bin Mohammed Al-Asmari** Member
Sultan Salahuddin Abdulazzim *** Member
Source: The Company
* On 10/02/2022G, the Board of Directors approved the appointment of Eng. Sari bin Ibrahim Al-Mayouf as Chairman of the Nominations and Remunerations Committee, and the appointment decision is effective from its date.
** On 03/09/2022G, the Board of Directors approved the acceptance of the resignation of Ms. Asmaa Fattani, a member of the Nominations and Remunerations Committee, provided that it is effective as of 06/08/1443H corresponding to 09/03/2022G. On 17/03/2022G, the Board of Directors approved the appointment of Mr. Salman bin Muhammad Al-Asmari as a member of the Nomination and Remuneration Committee, and the appointment decision is effective from its date.
*** On 17/10/2021, the Board of Directors approved the appointment of Mr. Sultan Salahuddin Abdulazzim as a member of the Nominations and Remunerations Committee, and the appointment decision is effective from its date.
The Committee recommended to the Board of Directors in its meeting held on 29/12/2021G to adopt the updated Nomination and Remuneration Committee bylaw, and to approve the remuneration policy for the Board Members, members of the committees and the executive management, on 29/05/1443H corresponding to 02/01/2022G. Nominations and remunerations by approving the regulations of the Nominations and Remunerations Committee and approving the remuneration policy for the Board Members and its committees and the executive management. A decision of the Board of Directors was also issued to include in the agenda of the General Assembly voting to approve the remuneration policy for the Board of Directors, its committees, and the executive management.
The General Assembly, held on 08/07/1443H corresponding to 02/09/2022G, rejected the Board of Directors’ decision to adopt the bylaws of the Nominations and Remunerations Committee, and the remuneration policy for Board Members, its committees, and the executive management.
On 17/10/2021G, the Board of Directors approved the formation of the Nominations and Remunerations Committee from the Board Members, Mr. Ibrahim bin Muhammad Al-Shabib, Mr. Sultan Salahuddin Abdulazzim, and Mrs. Asmaa Ahmed Fatani.
On 02/01/2022G, the Board of Directors approved the acceptance of the resignation of Mr. Ibrahim Al-Shabib from the membership of the Nomination and Remuneration Committee, and he was appointed to the position of the designated Managing Director.
It was found that the Company’s management did not comply with the corporate governance regulations for listed companies and the regulations for the Company’s management, as the work list of the Nomination and Remuneration Committee approved by the Company’s general assembly on 16/07/2017G did not include the remuneration of its members, and the general assembly did not approve the remuneration policy for the Board of Directors, the committees emanating therefrom and the executive management, in violation of some of the requirements of Paragraph (B) of Article 60, Paragraph (B) of Article 64, and Paragraph (1) of Article 61 of the Corporate Governance Regulations. In addition, the Company’s Nominations and Remunerations Committee did not commit to holding meetings on a regular basis every six months at least during the financial year ending on 31/03/2021G, as the Committee held only one meeting on 03/31/2021G, in violation of some of the requirements of Paragraph (7) of Article 50 of the Corporate Governance Regulations.
Duties and Responsibilities of the Nomination and Remuneration Committee
y Ensure the independence of the independent members on a continuous basis. If the committee finds that one of the members has lost the conditions for independence, it must submit the matter to the Company’s board of directors.
y Prepare and reviewing the policy for granting remunerations, benefits, incentives, and salaries for the Company’s board members and employees on an annual basis, and the committee must verify that the remunerations and benefits granted to the senior executive management of the Company are reasonable and commensurate with the Company’s performance.
y Determine the Company’s needs for competencies at the level of senior executive management and employees and the basis for their selection.
y Prepare the Company’s human resources and training policy, monitor its implementation, and review the same annually.
y Organize and follow up the procedures for nomination for membership of the Board of Directors in accordance with the applicable laws and regulations and the provisions of the Company’s Articles of Association.
y The committee shall consider any other matters referred to it by the Company’s board of directors.
4.3.3 Executive Committee
On 17/10/2021G, the Board of Directors decided to form the Executive Committee.
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Table No. ( Members of the Executive Committee*
Name Position
Vacant** Member
Al-Mu’tasim Billah Zaki Allam Member
Sari Ibrahim Al-Mayouf Member
Salman bin Mohammed Al-Asmari Member
Source: The Company
* Ms. Asmaa Fatani is no longer a member of this committee after her resignation from the Company’s board of directors on 08/06/1443H (corresponding to 09/03/2022G) and the seat is still vacant until the date of this Prospectus.
** The Committee has not yet been activated and has not held any meeting since the Committee’s date of formation, and the working regulations have not been approved to date.