Annual report of the Audit Committee for the year ending 31 December 2020 This report has been prepared based on Article 104 of the Saudi Companies Law, which states: The Audit Committee shall consider the financial statements of the company, the reports and notes submitted by the auditor and, if any, its opinions thereon. It shall also prepare a report on its opinion on the adequacy of the company's internal control system and other actions within its competence.
First: Members of the committee
The Committee shall be composed of four independent members, including three members from outside the board of directors:
Mr. Abdullah Al-Harbi Committee Chairman (Independent Board Member)
Mr. Nabil Nassif Member
Dr. Muhammad Masum Billah Member
Mr. Abdullah Al-Shubaily Member
On 30 May 2019, the board decided to recommend that the General Assembly should vote on the composition of the Audit Committee by the above-mentioned members. The Ordinary General Assembly approved on 09/07/2019 the
composition of the Committee with the same names, beginning on 09/07/2019 to 17/05/2022.
Second: Responsibilities and functions of the Audit Committee Includes the responsibilities and functions of the Audit Committee
1. The integrity of the company's financial statements, financial reporting procedures, internal accounting systems and financial controls.
2. The independent annual audit of the company's financial statements, the use of external auditors and the evaluation of the qualifications, independence and performance of external auditors.
3. Corporate compliance with legal and regulatory requirements, including company disclosure policy controls and procedures
4. Compliance with company conduct codes
5. The Committee shall be responsible for reviewing and verifying:
Whether the company has appropriate accounting policies and whether it makes judgements and estimates.
Appropriate, taking into account the audits of External Office Audit thereon.
Options for processing financial information on accepted accounting grounds.
The strength of accounting policies and any changes applied, for each year in all departments of the company.
Any significant adjustments are clearly required based on the audit findings.
Ensuring the effectiveness and efficiency of the study of the internal control system
Ensure the effectiveness and efficiency of the study of the internal control system.
Study of internal audit reports and follow-up on the implementation of corrective actions for the notes contained therein.
6. Recommending to the Board of Directors the appointment of statutory accountants and determining their fees, taking into account when recommending the appointment to ensure their independence.
7. Study the interim and annual financial statements before submitting them to the Board of Directors, and express opinions and recommendations regarding them.
8. To examine the accounting policies of the company, to express an opinion and to recommend them to the Board of Directors.
9. The assignment and dismissing the director of the compliance department or the compliance officer after obtaining the institution’s no-objection in writing.
10. The assignment and dismissing of the Director of the Internal Audit Department or Internal Auditor after obtaining the institution’s no-objection in writing.
11. Study the commitment plan, approve it and follow up on its implementation.
12. Determination of monthly salary, incentive profits and other rewards for the Internal Audit Department or internal reference consistent with the internal regulations of the company approved by the Board
13. Determining the value of the monthly salary, incentive profits and other rewards for the commitment department or the compliance officer in accordance with the internal regulations of the company approved by the Board.
14. Ensure that a written code of professional conduct is available after its adoption by the company's board of directors to ensure that the company's activities are carried out in a fair and ethical manner.
15. Follow up on important lawsuits filed by or against the company with the compliance manager or officer and submit periodic reports thereon to the Board of Directors.
Third: Meetings of the Committee
From 1 January 2020 to 31 December 2020, the Audit Committee held nine meetings.
A number of recommendations and resolutions were discussed, the committee carried out the following:
1. Consideration and reflect on the preliminary and annual financial statements and reports and observations submitted by the auditors and to make
recommendations to the Board of directors has approved.
2. Supervising the internal audit department, reviewing and approving the annual audit plan, reviewing and discussing the internal audit reports, and evaluating the internal control procedures in the company.
3. Supervising commitment department, adoption of the annual commitment department plan and access to and discussion of periodic commitment department reports
Fourth: The Committee's opinion on the adequacy of the internal control system
Based on periodic reports submitted to the Audit Committee during 2020 by the Internal Audit Department, the Commitment Department and external auditors, the Audit Committee shows the integrity, effectiveness and efficiency of the financial and operational controls and that there are no regulatory gaps or fundamental weaknesses in the regulatory system during the 2020 fiscal year affecting the integrity and fairness of the company's financial statements.
Accordingly, the Audit Committee endorses the annual assurance and disclosure by the Executive Directorate that there are no deficiencies that may affect financial reports for the financial year ended December 31, 2020. Accordingly, these reports to the Committee did not show substantial points affecting internal control systems or the fairness of the financial statements. No internal control system, regardless of the soundness of its design and the effectiveness of its application, can provide absolute assurance.
Greetings
