The annual report of the Audit Committee for the year ending December 31, 2021 Brief on the formation of the Audit Committee originating from the Board of Directors:
Prior to the election of the Board of Directors, the Audit Committee held four (04) meetings at the end of the ninth session. After the election of the members of the Board of Directors, the Audit Committee held three (3) meetings, based on the nomination of the Board of Directors.
After the General Assembly approved the Board of Directors' nomination to form the Audit Committee, the Audit Committee held meetings on August 18 and on November 09, 2021.
The current Audit Committee is consist of four members, including two independent members of the Board of Directors and two members from outside the Board. The Committee held five meetings during the year 2021.
Attendance record for the audit committee meeting for the year 2021:
Members Membership
Status
30- Mar
07- Apr
02- May
10- May
5 JUN (3)
8 JUN (3)
30 JUN (3)
18 AUG (4)
9 NOV (4)
HAITHAM AL-FRAIH Chairman
- - - - -AZZAM ALMUDAIHIM Member
- - - - -SALEH ALFADL Member
- - - - -SAAD ALQAHTANI Chairman NA NA NA NA
ABDULLAH ALHARBI Member NA NA NA NA
KHALED ALTARIF Member
(Outside) NA NA NA NA
SALEH ALYAHYA Member
(Outside) NA NA NA NA
1) Members of the ninth session, their membership expired with the expiration of the membership of the Board of Directors.
2) Members of the tenth session.
3) After nomination by the Board of Directors to form the committee.
4) After the General Assembly approves the formation of the committee
The Audit Committee is responsible for monitoring the company’s business and verifying the integrity of its reports, financial statements, and internal control systems. The committee’s tasks includes the following:
Financial Reports
1) Reviewing the company’s financial statements before submitting it to the Board of Directors and expressing its opinion and recommendation thereon; to ensure its integrity, fairness and transparency.
2) Articulating 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 included information that allows the shareholders and the investors to evaluate the company’s financial position, its performance, business model and strategy.
3) Reviewing any important or unfamiliar issues contained in the financial reports and accounts, and thoroughly investigating any issues raised by the company’s CFO, Compliance Officer, or the Auditors.
4) Investigating any issues raised by the CFO Compliance Officer, or the Auditors.
5) Verification of accounting estimates in the material issues contained in the financial reports.
6) Reviewing the accounting policies followed in the company and expressing an opinion and recommendation to the Board of Directors in this regard.
Internal audit:
1) Reviewing the company’s internal and financial control and risk management systems.
2) Reviewing internal audit reports and following up on the implementation of corrective actions for the observations contained therein.
3) Monitoring and supervising the performance and activities of the Internal Audit Department in the company. Ensure the availability of the necessary resources and their effectiveness in performing the work and tasks assigned to them
4) Recommending to the Board of Directors the appointment of the Director of the Internal Audit Department or the Internal Auditors and approving his remuneration.
External Auditor:
1) Recommending the Board of Directors to appoint and dismiss external auditors, determine their fees, and evaluate their performance, after ensuring their independence and reviewing the scope of their work and the terms of contracting with them.
2) Verify the auditor's independence and objectivity, and the effectiveness of audit work, considering the relevant rules and standards.
3) Review the company’s External Auditor’s work plan and scope and confirm that they have not submitted technical or administrative works that are outside the scope of audit work, and provide its views in this regard.
4) Answering corporate auditor inquiries.
5) Studying the External Auditor's reports and their notes on the financial statements and following up on its corrective action.
Compliance:
1) Reviewing the Regulatory Authorities reports and verify that the company has taken necessary measures in this regard.
2) Verify compliance with relevant laws, regulations, policies and instructions.
3) Reviewing the contracts and transactions proposed to be conducted by the company with related parties, and presenting its views in this regard to the Board of Directors.
4) Raise the issues it deems necessary to take action on to the Board of Directors, and make recommendations for the actions to be taken.
In order to assist the committee in carrying out its tasks and achieving its goals, the management members and the main stakeholders in the company, such as the CEO, the CFO, the External Auditor, and the Internal Auditor participated in the audit committee meetings held during 2021.
The main stakeholders and a number of management members presented their views to the Audit Committee on certain matters, including the validity of reports and lists
The company's consolidated financials, their effectiveness and integrity, the performance, and the effectiveness of internal controls, internal audit work, and financial reports.
Based on the views and presentations provided by the management members and key stakeholders of the company, the Audit Committee approved on several items during the year 2021 to seek the approval of the Board of Directors, including:
Discussing the annual financial statements for the year ending on December 31, 2020. The external auditor was discussed about the reasons for the reservations, and the committee worked hard in cooperation with the external auditor and the company’s management to remove all obstacles and work to issue the financial statements for the year 2020.
Recommending the appointment of a Tax and Zakat advisor.
Recommending the appointment of a financial advisor to study the accounts receivable.
Preliminary (Quarterly) financial reports for the year 2021.
Recommending the nomination of an external auditor for the company for the year 2021, based on the shareholders’ decision.
In addition, the Audit Committee studied and received reports on several key issues, including:
• A summary of the company's internal audit work during the year 2021, which includes audit work and advisory tasks.
• A quarterly report on the existing internal audit work in the company during the year 2021.
All meetings held by the Audit Committee during 2021 witnessed the presentation of comprehensive reports and the holding of extensive meetings with the external auditor and members of senior management on the financial statements, which included a detailed analysis of the company’s financial performance and changes in its financial position, steps for preparing the final financial statements, and the independent review conducted by the external auditor of the lists financials during the first, second and third quarters of the year.
Audit committee’s opinion:
In our opinion, and based on the reports submitted by the executive management and the internal audit reports submitted to the Audit Committee during 2021, the committee believes that the executive management in its quest to improve and develop the control system, still needs further development and improvement. It is also noted that any internal control system, regardless of the appropriateness of its design and the effectiveness of its application, cannot provide absolute assurance.
