Audit Committee Report for the year ended December 31, 2022 Page 1 | 3
Audit Committee Report For the year ended December 31, 2022
Introduction
The current Audit Committee was formed by the decision of the 16th Extraordinary General Assembly on 03/10/2021, and its charter was approved and its functions applied from 30/11/2018 until the completion of the term of Board of Directors, which ends on 29/11/2024, and the Committee is formed by the following members:
1. Abdulaziz Tariq Al Bassam (Chairman)
2. Othman Mohamed Bafagih (Member)
3. Mansour Saleh Al Kharboush (Member)
The mandate of the Audit Committee at Hail Cement Co. is governed by regulations and policies issued by the Ministry of Commerce and the Capital Market Authority in addition to the Charter of the Audit Committee that defines its functions, terms of reference, authorities, and responsibilities
.
The following is a brief on the most important tasks performed during 2022
:
Committee Meetings:
During the year 2022, the Audit Committee held (7) meetings to review and discuss, the quarterly and annual financial statements, internal audit reports, and executive management report. Additionally, the Committee carried out its tasks of monitoring the company's business, verifying the validity and integrity of financial reports and internal control systems. The following are the highlights of the Committee's work during the year 2022:
Audit Committee Report for the year ended December 31, 2022 Page 2 | 3
First: Financial Reports
The Committee studied the quarterly and annual financial statements of the company for the year ended December 31, 2022 and discussed the observations of the external auditor on the financial statements and follow up on what was done to it.
The Committee examined the results of the company's financial year review with the company's executive and financial management team and ensured that it complies with the standards approved in the KSA.
The Committee submitted the financial statements, along with its recommendation, to the BOD for approval.
The Committee reviewed the policies and accounting practices of the company to ensure that they are following the accounting standards approved in the KSA.
Second: Internal Audit Department.
The Committee also supervised the performance of the internal audit department, and approved their audit plan, followed up activities, met with the internal audit manager periodically, and discussed with the executive management their observations.
The Committee followed up with the implementation of the internal audit's recommendations with the company's management, and established controls to ensure these recommendation continue to be implemented.
The Committee verified the independence of the internal audit function at the company, and monitored its efficiency in conducting the audit process according to the applicable standards.
Third: External Auditor
The Committee studied and evaluated proposals received to provide external audit services and recommended the selection of the best external auditor, ensuring their independence and that the scope of their work provides appropriate coverage with respect to the terms of their engagement.
The Committee supervised the work of the external auditor and meet with them quarterly to discuss their observations with the financial department of the company, and made sure that the external auditor receives the required data in order to express their opinion professionally and independently by the standards approved in the KSA.
Fourth: Ensure Compliance
The Committee reviewed the reports and observations from the company's regulators, and verified that the necessary actions are being taken and implemented.
Audit Committee Report for the year ended December 31, 2022 Page 3 | 3
The Committee verified the company's compliance with the relevant regulations, systems, and policies and expressed their opinion about requests received from the BOD or the management of the company, the most important of which are: the Whistleblowing Policy; the profit distribution policy; the policy of regulating the relationship with stakeholders; and the credit policy.
The Committee followed up with the status of legal cases filed in favor or against the company with the company's lawyers.
Fifth: Procedures to providing observations:
The Committee developed the appropriate mechanism by which the company's employees, customers, and shareholders can provide feedback on any infringement of the company's internal regulations, including those related to the preparation of financial statements, while ensuring that the rights of whom provided the notice are not violated.
The Committee developed appropriate procedures to proceed, follow up the on feedback provided by the company's employees, and ensure the independence of those procedures.
The results of the annual internal audit of the effectiveness and procedures of the internal control system, finance and risk management:
The company's management is responsible for the preparation of a comprehensive and effective system of internal controls, and based on what was presented to the Committee during the year 2022, the Committee did not find any evidence of any fundamental weakness in the internal control systems in the company and the Committee believes that the company has a sound and effective internal control system; bearing in mind that any internal control system, no matter how efficient it may be, cannot provide absolute confirmation about the internal control systems applied.
Chairman and Members of the Audit Committee:
Chairman Audit Committee Mr. Abdulaziz Al Bassam
Member Audit Committee Mr. Othman Bafagih
Member Audit Committee
Mr. Mansour Al Kharboush
Date 09 March 2023
Recommendation to assign External Auditor for the year 2023-2024
To: HCC Board of Directors
As per the third article of the Audit Committee Charter, Committee Responsibilities and Tasks; we would like to inform that Audit Committee has received 7 offers from licensed Auditors, with no conflict of interest with HCC, after studying the offers technically and financially, Audit Committee recommended to the BOD with below companies offer to check and Audit HCC interim Financial statement for the second and third quarter and the annual statements for the year 2023, and the first quarter of the year 2024, As stated below:
First nominated Auditor/ Al Sayed Al Ayouti and company SR 230,000
Second nominated Auditor / Baker Tilly MKM & Co SR 240,000
ةنجل ةيصوت ماعلل ةكرشلل تاباسح عجارم نييعتب ةعجارلما
ىلالما 2023 / 2024 .م
لئاح تنمسا ةكرش ةرادإ سلجم /ةداسلا
لمع ةحئلا بسحب تاباسحلا عجارم اثلاث ةرقفلا ةعجارلما ةنجل
ةنجل نأب مكتدافإ دون ،ةنجللا تايلوؤسمو ماهم ةثلاثلا ةدالما نم يعجارم نم ضورع ةعبس تقلت لئاح تنمسا ةكرشب ةعجارلما ةكرشلا حلاصم عم مهحلاصم ضراعتت لاو مهل صخرم تاباسح لا يحاونلا عيمج نم اهل ةمدقلما ضورعلا ةسارد دعبو ةينف
ةيلاتلا تاكرشلاب ةرادلإا سلجم ةعجارلما ةنجل ي صوت ،ةيلالماو يناثلا عبرلل ةيلولأا ةيلالما مئاوقلا صحفل كلذو مهئامسأ ماع نم ثلاثلاو 2023
ماع نم لولأا عبرلاو م 2024
ةعجارمو ،م
ماعلا ةياهن يف امك ةيونسلا ةيلالما مئاوقلا 2023
وحنلا ىلع م
:ىلاتلا
لولأا حشرلما - نوبساحم ةاكرشو ىطويعلا ديسلا /ةداسلا
نوينوناق نوعجارمو باعتاب 230,000 .لاير
يلت ركيب بتكم /ةداسلا :يناثلا حشرلما - باعتاب 240,000 .لاير ـــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــ ـــــــــــــــــــــــــــــــــــــــــــــــــ
ماسبلا قراط نب زيزعلا دبع
ةعجارلما ةنجل سيئر ـــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــــ
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ةيقفاب دمحم نب نامثع
ةعجارلما ةنجل وضع ــــــــــــــــــــــــــــــــــــــــــ
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شوبرخلا حلاص نب روصنم
ةعجارلما ةنجل وضع
