Audit committee work list
Al Jouf Cement Company
(a Saudi joint stock company)
Audit committee work list
preamble:
Out of the keenness of the Board of Directors that all the company’s departments carry out the tasks and responsibilities entrusted to them, to achieve what is beneficial and beneficial to the company and its shareholders, and based on the proposal of the Board of Directors, the Company’s General Assembly issued a regulation for the work of the Audit Committee to clarify the rules and standards approved in the work of the Committee and the conditions Membership in it, in accordance with the Companies Law and the Corporate Governance Regulations issued by the Capital Market Authority.
Article (1) Formation of the Audit Committee and the Remuneration of its Members:
1- By a decision of the company’s Ordinary General Assembly, an audit committee shall be formed whose members shall not be less than three and not more than five members who are not members of the executive board of directors, whether from shareholders or others, provided that at least one of them shall be an independent member, and one of them shall be competent in affairs. Financial and accounting, and in the resolution specifying the tasks of the committee and the controls for its work and the remuneration of its members.
2- Appointing the General Assembly based on the recommendation of the Board of Directors - members of the Audit Committee in accordance with the following selection rules:
The candidate should have a record of experiences related to the tasks of the audit committee.
The candidate should have a good knowledge of the company's activities and business and the risks it faces.
The candidate should have a university qualification, knowledge of the financial and accounting aspects and the nature of the company’s business, provided that he is among the candidates specialized in financial and accounting affairs, such as holders of a university degree or professional accounting fellowship.
- The candidate should not be an employee (or has worked as an employee during the past two years) with the company, or the company’s auditor.
- The candidate should not have been convicted of committing an act of dishonor or dishonesty or in violation of the laws and regulations in the Kingdom of Saudi Arabia or in any other country.
The selection of the candidate for membership in the committee should not be in violation of the relevant rules, regulations and instructions.
3- Membership of the committee is submitted by sending applications and candidacy after announcing the company, and the nomination committee sorts them and submits its
recommendations based on the selection rules according to the company’s system.
4- The committee chooses from among its members a chairman of the committee and a secretary for the committee from among its members or others.
5- The head of the committee must be an independent member.
6- The Chairman of the Board of Directors may not be a member of the Audit Committee.
7- Based on the proposal of the Audit Committee and the approval of the company’s board of directors, members of the committee are appointed temporarily in the event that one of the committee’s seats becomes vacant, provided that this appointment is presented to the nearest general assembly of shareholders for approval and the new member completes the term of his predecessor.
8- A person who works or has worked during the past two years in the executive or financial management of the company, or with the company’s auditor, may not be a member of the audit committee.
9- Committee members receive an annual remuneration and an allowance for attending sessions according to what is decided in the list of policies, controls, standards and procedures for compensation of members of the Board of Directors and committees emanating from the Board of Directors and the executive management approved by the company’s general assembly.
Article (2) Membership and Duration:
1- The term of membership is three years at most, starting from the date of issuing the Ordinary General Assembly’s decision to form the committee, and the committee’s term ends with the end of the Council’s term.
2- Committee members may be re-elected and the general assembly has the power to dismiss all or any of the committee members at any time without prejudice to the dismissed member’s right to compensation and if the dismissal occurred for an unlawful reason or at any inappropriate time.
3- A member of the committee has the right to request his exemption from the committee's membership, provided that this is done at the appropriate time and that his request is approved by the board of directors.
4- If the position of a member of the committee becomes vacant, the board of directors may appoint whomever it deems appropriate to be a temporary member in the vacant position,
provided that those with experience and competence are those who have experience and competence. Its first meeting to approve it, and the new member completes the term of his predecessor.
5- Termination of membership of any member of the Audit Committee shall not invalidate any previous action taken by the Audit Committee except to the extent required by law or determined to be appropriate to meet any regulatory standards.
Article (3) Functions and Responsibilities of the Audit Committee:
The Audit Committee is responsible for monitoring the company’s business and verifying the integrity and integrity of its reports, financial statements and internal control systems. The committee’s tasks include in particular the following:
1- Studying the company’s initial and annual financial statements before submitting them to the Board of Directors and expressing an opinion on them and making recommendations about them to ensure their integrity, fairness and transparency.
2- Expressing a technical opinion at the request of the Board of Directors as to whether the Board’s report and the company’s financial statements are fair, balanced and understandable and include information that allows shareholders and investors to evaluate the company’s financial position, performance, business model and strategy.
3- Studying any important or unfamiliar issues included in the financial reports.
4- Carefully researching any issues raised by the company's financial manager, or whoever undertakes his duties, the company's compliance officer, or the auditor.
5- Verifying accounting estimates in the material issues contained in the financial reports.
6- Studying the accounting policies and principles used in the company and its subsidiaries according to the nature of their work, and expressing an opinion and recommendation to the Board of Directors in this regard.
7- Monitoring and supervising the performance and activities of the internal auditor and the internal audit department in the company, in order to verify the availability of the necessary resources and their effectiveness in carrying out the work and tasks assigned to them.
8- Studying the internal audit reports and following up the implementation of the corrective procedures for the observations contained therein.
9- Studying and reviewing the company's internal and financial control and risk management systems.
10- Recommending to the board of directors the appointment of the director of the internal audit unit or department or the internal auditor and proposing his remuneration.
11- Recommending to the Board of Directors to nominate and dismiss 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.
12- Verify the auditor’s independence, objectivity and fairness, and the effectiveness of audit work, taking into account the relevant rules and standards.
13- Reviewing the company’s auditor’s plan and his works, and verifying that he did not submit technical or administrative works outside the scope of the audit work, and expressing its views in this regard.
14- Answering the company's auditor's inquiries.
15- Studying the auditor's report and his notes on the financial statements and following up on what was taken in their regard.
16- Reviewing the results of the reports of the supervisory authorities and verifying that the company has taken the necessary measures in this regard.
17- Verify the company's compliance with the relevant laws, regulations, policies and instructions.
18- 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.
19- Supervising the development of a clear strategy for risk management in line with the nature and size of the company's activities before approval by the Board of Directors and verifying its implementation, review and update based on the company's internal and external variables.
20- Submitting the issues it deems necessary to take action on to the Board of Directors, and expressing its recommendations for the actions to be taken.
21- The committee must establish a mechanism that allows the company’s employees to submit their observations regarding any abuse in the financial or other reports confidentially, and the committee must verify the application of this mechanism by conducting an independent investigation commensurate with the size of the error or abuse and adopting appropriate follow-up procedures.
Article (4) Powers of the Audit Committee:
The Audit Committee, in order to perform its duties:
1- The right to inspect the company's records and documents.
2- To request any clarification or statement from the members of the board of directors or the executive management.
3- To request the board of directors to invite the company’s general assembly to convene if the board of directors obstructs its work or the company suffers serious damage or losses.
Article (5) Quorum of Committee Meetings and Decisions:
1- The meeting shall not be valid unless attended by the majority of the members, in person or by proxy, according to a letter of authorization. A member may not represent more than one member. The committee must also adopt the schedule of its meetings before the beginning of each year, provided that a final agreement is reached during each meeting on the date of the meeting.
Subsequent meeting. In all cases, the committee must meet at least four meetings in one fiscal year, or if requested by the committee’s chairman, two of its members, the chairman of the board of directors, or two of its members, provided that the invitation to attend the meeting is sent at least one week prior to its date The agenda and its documents are attached to it.
2- The committee’s decisions and recommendations are issued by a majority vote of its members present and represented at the meeting. In the event of equal votes, the side with the chairman shall prevail.
3- Any member may reserve any decision taken by the committee, provided that he explains the basic reasons that led him to reserve. On the items he did not attend the discussion of if he expressed his desire to do so in writing.
4- The committee may also invite any of the board members or members of the executive management or any specialist or other persons from inside or outside the company to attend the meeting to participate in the discussion of any topic that falls within the competences of the committee without having the right to vote on any of the decisions competent committee.
5- The committee meets periodically with the auditor and the internal auditor.
6- The internal auditor and the auditor may request a meeting with the committee whenever the need arises.
Article (6) Duties of the Chairman of the Committee:
1- Inviting the committee to convene and specifying the time, date and place of each committee meeting and the agenda
2- Presiding over the committee's meetings.
3- Preparing periodic reports on the activities of the committee and presenting them to the committee in preparation for submission to the board of directors.
4- Presenting the committee’s reports to the board of directors, accompanied by recommendations, if any, for approval in the first regular meeting following the committee
meeting. This is according to the request of the board of directors or as the committee chair deems appropriate.
5- Representing the committee before the board of directors and any other party that requires it.
6- Submitting the results of the committee’s work and recommendations to the Council.
Article (7) Duties of the Committee’s Secretary:
1- Informing the committee members of the meeting dates and the agenda
2- Recording the minutes of the meetings so that the minutes include the date and place of the meeting, the names of the attendees, the agenda, a summary of the discussions and the texts of the recommendations and decisions reached by the committee and approved by the committee chairman.
3- Drafting and publishing annual and quarterly financial statements, “financial statements and financial results” as decided by the committee and in accordance with the relevant
regulations, decisions and instructions.
4- Providing the Chairman of the Board of Directors, after each meeting, with a copy of the minutes of the committee's meeting, after it has been approved by the committee members.
5- Keeping the minutes of the meetings in a safe, orderly and tidy place.
6- Carrying out any other tasks assigned by the committee to the committee’s decision.
Article (8) General Provisions and Rules:
1- The members of the committee must regularly attend the committee’s sessions and actively participate in its work. The member who should be absent from one of the sessions must notify the committee chairman in writing of that. A member may not leave the session permanently without the permission of the committee chairman.
2- Committee members must preserve the company’s secrets, and a committee member may not disclose any company secrets he has learned, otherwise the Board may remove him from the committee and hold him accountable for compensation for the damage that may result from that.
3- No member of the committee may carry out any executive work in the company or any of its subsidiaries.
4- A committee member must exercise due diligence to carry out the work entrusted to him and keep abreast of recent developments related to the company's business.
5- The committee member must have integrity, honesty, objectivity and independence, be characterized by justice, be free of personal interests, and abide by confidentiality. These matters are taken into account when appointing the committee member or while the member performs his duties.
6- A member of the committee may not participate in any business or activities that compete with the company or its subsidiaries and do not violate honor and honesty.
Article (9) Publication and Enforcement:
The work regulations of the Audit Committee are reviewed whenever the need arises, and in the event of making any changes approved by the Board of Directors, those changes are approved by the General Assembly based on a recommendation from the Board of Directors and are
implemented from the date of approval by the Company’s General Assembly.
