Arabian Centres Company AGM Agenda [28-Sep-2022]
1. Voting on the Board of Directors Report for the financial year ended 31/03/2022.
2. Voting on the Company's Auditor's Report for the financial year ended 31/03/2022.
3. Voting on the Company's Financial Statements for the financial year ended 31/03/2022.
4. Voting on discharging the Board of Directors members from their liabilities related to the management of the company during the financial year ended 31/03/2022.
5. Voting on delegating the Board of Directors to distribute interim dividend, either semi-annually or quarterly, for the upcoming financial year ending 31/03/2023.
6. Voting on appointing an external auditor for the Company among the nominees based on the recommendation of the Audit Committee, to review and audit the Company’s quarterly and annual financial statements for the second, third and annual periods of financial year ended 31/03/2023. In addition, the first quarter of financial year ended 31/03/2024, and determine their fees.
7. Voting on the payment of a remuneration to the Board of Directors members amounting to SAR 2,700,000 for the financial year ended 31/03/2022.
8. Voting on delegating the AGM authority to approve related parties transactions to the Board of Directors, as stated in paragraph (1) of Article 71 of the Companies Law for a period of one year from the date of approval of the AGM or until the end of the Board of Directors term, whichever is earlier, and according to the conditions stated in the Regulatory Rules and Procedures issued by the CMA pursuant to the Companies Law relating to Listed Joint Stock Companies.
9. Voting on the businesses and contracts that will be conducted between the Company and Lynx Contracting Company (formerly known as “Fawaz Abdulaziz Al Hokair & Partners Real Estate Company”), where BoD members Mr. Fawaz Al-Hokair and Eng. Salman Al-Hokair have an indirect interest, which are contracts for the establishment and development of commercial centers belonging to the company in various cities in the Kingdom, without preferential terms, where the value of transactions for the financial year ended 31/03/2022 amounted to SAR 711,920,602.
(Attached)
10. Voting on the businesses and contracts that will be conducted between the Company and Fawaz Abdulaziz Al Hokair & Co., where BoD members Mr. Fawaz Al-Hokair, Eng. Salman Al-Hokair, Mr.
Mohamad Mourad and Eng. Omar Al-Muhammadi have an indirect interest in them, which are lease contracts for rental spaces in several commercial centers belonging to the company in various cities in the Kingdom, without preferential terms, where the value of transactions for the financial year ended 31/03/2022 amounted to SAR 273,055,082. (Attached)
11. Voting on the businesses and contracts that will be conducted between the Company and FAS Holding Company for Hotels and its subsidiaries, where BoD members Mr. Fawaz Al-Hokair and Eng.
Salman Al-Hokair have an indirect interest in them, which is a settlement of previous dues from FAS Holding Company for Hotels and its subsidiaries in cash and through transferring lands to the Company according to the announcement published on Saudi Exchange website on 28/01/2021, with the agreement of both parties that the Company will receive these real estates at 9% less than the average valuation, where the value of transactions for the financial year ended 31/03/2022 amounted to SAR 218,982,570. (Attached)
12. Voting on the businesses and contracts that will be conducted between the Company and NESK Trading Project Company, where BoD members Mr. Fawaz Al-Hokair, Eng. Salman Al-Hokair, Mr.
Mohamad Mourad and Eng. Omar Al-Muhammadi have an indirect interest in them, which are lease contracts for leasing spaces in several commercial centers belonging to the Company in various cities
in the Kingdom, without preferential terms, where the value of transactions for the financial year ended 31/03/2022 amounted to SAR 61,710,786. (Attached)
13. Voting on the businesses and contracts that will be conducted between the Company and Tadaris Najd Security Est., where the BoD member Eng. Salman Al-Hokair has an indirect interest in them, which are security services contracts for all the commercial centers of the company, without preferential terms, where the value of transactions for the financial year ended 31/03/2022 amounted to SAR 51,093,917. (Attached)
14. Voting on the businesses and contracts that will be conducted between the Company and Sala Entertainment Company, where the BoD member Eng. Salman Al-Hokair has an indirect interest in them, which are lease contracts for rental spaces in several commercial centers belonging to the Company in various cities in the Kingdom, without preferential terms, where the value of transactions for the financial year ended 31/03/2022 amounted to SAR 40,940,432. (Attached)
15. Voting on the businesses and contracts that will be conducted between the Company and Muvi Cinema Company, where the BoD member Mr. Fawaz Al-Hokair has an indirect interest in them, which are lease contracts for rental spaces in several commercial centers belonging to the Company in various cities in the Kingdom, without preferential terms, where the value of transactions for the financial year ended 31/03/2022 amounted to SAR 38,773,064. (Attached)
16. Voting on the businesses and contracts that have been conducted between the Company and Saudi FAS Holding Company, where BoD members Mr. Fawaz Al-Hokair, Eng. Salman Al-Hokair, Eng. Omar Al-Muhammadi, Eng. Kamel Al-Qalam and Mr. Mohamad Mourad have an indirect interest in them, in relation to ongoing business support activities, without preferential terms, where the value of transactions for the financial year ended 31/03/2022 amounted to SAR 36,229,922. (Attached) 17. Voting on the businesses and contracts that will be conducted between the Company and
Abdulmohsin Al-Hokair for Tourism and Development Group, where BoD members Mr. Fawaz Al- Hokair and Eng. Salman Al-Hokair have an indirect interest in them, which are lease contracts for rental spaces in several commercial centers belonging to the Company in various cities in the Kingdom, without preferential terms, where the value of transactions for the financial year ended 31/03/2022 amounted to SAR 27,758,647. (Attached)
18. Voting on the businesses and contracts that will be conducted between the Company and Innovative Union Co. Ltd., where BoD members Mr. Fawaz Al-Hokair, Eng. Salman Al-Hokair, Mr. Mohamad Mourad and Eng. Omar Al-Muhammadi have an indirect interest in them, which are lease contracts for rental spaces in several commercial centers belonging to the company in various cities in the Kingdom, without preferential terms, where the value of transactions for the financial year ended 31/03/2022 amounted to SAR 18,771,725. (Attached)
19. Voting on the businesses and contracts that will be conducted between the Company and Food Gate Company, where BoD members Mr. Fawaz Al-Hokair, Eng. Salman Al-Hokair, Mr. Mohamad Mourad and Eng. Omar Al-Muhammadi have an indirect interest in them, which are lease contracts for leasing spaces in several commercial centers belonging to the Company in various cities in the Kingdom, without preferential terms, where the value of transactions for the financial year ended 31/03/2022 amounted to SAR 15,090,052. (Attached)
20. Voting on the businesses and contracts that will be conducted between the Company and Majd Business Co. Ltd., where BoD members Mr. Fawaz Al-Hokair and Eng. Salman Al-Hokair have an indirect interest in them, which are lease contracts for rental spaces in several commercial centers belonging to the company in various cities in the Kingdom, without preferential terms, where the value of transactions for the financial year ended 31/03/2022 amounted to SAR 14,548,982.
(Attached)
Audit Committee Annual Report To Shareholders
Presented at the
General Assembly
For the Financial Year 2021-2022 (April 1, 2021 to March 31, 2022)
Report Date
August 25 , 2022
AUDIT COMMITTEE REPORT TO THE SHAREHOLDERS For the Financial Year 2021-2022
P a g e | 2
INTRODUCTION
This report summarizes the Audit Committee activities during the financial year 2022 (April 1, 2021, to March 31, 2022) and how it has discharged its duties towards the shareholders of Arabian Centres.
Current audit committee comprises three members:
• Mr. Fahad AlKhorayef (AC Chairperson).
• Mr Turki AlDayel (Independent Board member).
• Mr. Wissam Moukahal (Member).
It should be noted that this report presents the activities of the previous audit committee which term expired on June 18, 2022 since the current audit committee members were elected by the General Assembly on June 16, 2022, with a term that starts on June 19, 2022 and expires on June 18, 2025.
Therefore, the current audit committee term started after the end of the financial year 2022.
Previous Audit Committee members: (Active membership from April 1, 2021, to June 18, 2022)
• Dr. Bernard Higgins (AC Chairperson and Independent Board member).
• Mr. Fahad AlKhorayef (Independent).
• Mr. Nadim Shabsogh.
ACC is in compliance with article 54 of Capital Market Authority (CMA) Corporate Governance Regulations, which require the audit committee to have at least one independent director and that no executive director is among its members. The Audit Committee current composition is sufficient to exercise their judgment in an informed and impartial manner to fulfil its mandated responsibilities, overseeing financial reporting, related parties’ transactions, conflicts of interest, risk management, internal control environment, internal audit, and external audit processes.
The Audit Committee has adopted appropriate formal terms of reference in its charter, approved by the General Assembly, in line with the requirements of articles 54 to 59 of (CMA) Corporate Governance Regulations and section 9 of ACC Corporate Governance Manual. The Committee should meet at least four times per annum as per its approved terms of reference and conduct its affairs in compliance with its charter.
AUDIT COMMITTEE REPORT TO THE SHAREHOLDERS For the Financial Year 2021-2022
P a g e | 3
AUDIT COMMITTEE MEETINGS
The Audit Committee held eight (8) meetings from April1, 2021, to March 31, 2022. Meetings were attended by all Committee members as well as the Chief Executive Officer. The Chief Financial Officer was invited to meetings related to financial matters:
Meeting Date Bernard Higgins Nadim Shabsogh Fahad Al-Khorayef
20 April 2021 Present Present Present
20 June 2021 Present Present Present
31 August 2021 Present Present Present
3 November 2021 Present Present Present
8 November 2021 Present Present Present
19 December 2021 Present Present Present
7 February 2022 Present Present Present
22 March 2022 Present Present Present
The Audit Committee held several meetings with the external auditors to discuss the financial statements audit process, management’s co-operation with the external auditors, their sharing of information and whether there were any unresolved issues. The Committee chairperson also invited the external auditors to contact him at any time to report any incidents or matters that require AC’s support. No such matter was highlighted during FY 2021-2022. Minutes of each Committee meeting were approved and subsequently presented to the Board.
SUMMARY OF AUDIT COMMITTEE ACTIVITIES
The Audit Committee reports regularly to the Board on its activities, deliberations, and recommendations in discharging its duties and responsibilities as set out in its charter. The Committee chairperson regularly updates the Board on Committee activities during each Board meeting.
The main activities undertaken by the Audit Committee during the year were as follows:
Financial Reporting:
a. Reviewed the quarterly and annual financial statements of the company, discussed it with the external auditors and the chief financial officer, focusing particularly on significant changes to accounting policies and practices, significant or unusual events, compliance with accounting standards and other legal requirements, and ensured there are no unresolved issues prior to recommending the same to the Board of Directors for approval.
b. Audit Committee was satisfied with the external auditors’ unqualified opinions and recommended that the quarterly and annual financial statements be approved by the Board.
AUDIT COMMITTEE REPORT TO THE SHAREHOLDERS For the Financial Year 2021-2022
P a g e | 4 External Audit:
a. Reviewed the performance and assessed the external auditor independence, quality of processes, communications, and performance during the audit.
b. Discussed with the external auditor the financial audit process, external audit plan, management cooperation, important and unresolved issues, as well as quarterly and year end audit results.
c. Recommended to the Board the appointment of external auditors and their remuneration to review ACC financial statements for the 2nd 3rd and 4th Quarters of 2022, audit annual F/S of 2022 and review the 1st Quarter of 2023. The General Assembly approved the appointment of KPMG on September 30, 2021.
Compliance, Risk Management, and Internal Controls:
a. Reviewed the major risks facing the Company and discussed their mitigation plans with the management to ensure appropriate internal controls are implemented.
b. Reviewed the contracts and related party transactions during the year to ensure compliance with the relevant laws, regulations, and related internal policies and reported its recommendations to the Board in connection therewith (separate RPT reports were sent to the Board).
c. Evaluated the overall adequacy and effectiveness of the system of internal controls based on the results of work performed by internal auditors, which showed reasonable improvements up to end of March 2022.
Internal Audit:
a. Reviewed the adequacy of resources and reporting structure of the internal audit department to execute the audit plan effectively and independently.
b. Approved the annual internal audit plan for financial year 2022.
c. Held several meetings with the Internal Audit Director to ensure that his functions are executed effectively and objectively and independently from management. The Committee was satisfied that the internal auditors independence and objectivity were preserved and that the internal audit function is operating effectively as per its charterand risk based audit plan.
AUDIT COMMITTEE REPORT TO THE SHAREHOLDERS For the Financial Year 2021-2022
P a g e | 5
d. Reviewed internal audit findings arising from the work carried out by the internal audit department and followed up on management commitment to implement corrective remedial actions and measures.
Audit Committee Chairperson
Fahed AlKhorayef August 25 2022 End of Report
