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Audit Committee Charter

THE TRANSPORT COMPANY (MOWASALAT)

Group: Internal Audit Document No: TC/CHR/___/______


Revision: 0 Pages: Cover + 13Pages

Audit Committee Charter


CONTENTS

Description Page No.


1.0 Introduction 5
2.0 Purpose 5
3.0 Authority & Committee Structure 6
4.0 Duties & Responsibilities of Committee
7
Members
5.0 Oversight of the Internal Audit Activity
10
and Other Assurance Providers
6.0 Terms of Office & Quorum 11
7.0 Operational Principals 11
8.0 Operational Procedures 13
9.0 Dismissal 14

Approved for Implementation by:

Post Name Signature Date


Chairman of The
Nasser Al Malki
Board

Managing Director Khalid Nasir Al Hail

Corporate Strategy
Mahesh Patel
Director

INTERNAL CONTROLS

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Audit Committee Charter

Validation

To assure Management’s Shareholders and External Agencies’ confidence in Company’s


policies and practices; Mowasalat’s Internal Audit may verify without notice, compliance
with this Charter. The Corporate Strategy & PMO Department shall review this document
annually and revise it as necessary to ensure that it continues to serve the purpose intended.

Document Control

Document Owner (Internal Audit

Version No. Description of Change Date Author

Khadiga El Hashim
0 New Charter & Avinash
Deshpande

Document Creation/Revision Request:

If a document is to be initiated, change of ownership occurs for your specific


document (as numbered) or if the document is no longer needed and is being
returned or destroyed, please complete this form and return it to the following
location:

Charter Title Audit Committee Charter Date of this 10/7/2018


version
Charter Identification TC/CHR/___/_______
Khadiga El Hashim & Avinash
Version 0 Author Deshpande

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Audit Committee Charter

Document Creation/Revision Request Form


Send to Corporate Strategy Department Phone
From Date
Location ECM ID TC/CHR/___/____
*Document/Revision Type: New Addition Deletion Correction
*Description of Change (attach a separate sheet if necessary)

This section is to be completed by the Corporate Strategy Department:

Acknowledged Date

Reviewed Date

Originator of Request Advised Date

Issued as Revision Date

Issued as Bulletin Date

Revision Deferred Date

Revision Rejected Date

Reason for Rejection

Workforce Planning Advisor / Head of Business


Improvement

Charter Title Audit Committee Charter Date of this 10/7/2018


version
Charter Identification TC/CHR/___/_______
Khadiga El Hashim & Avinash
Version 0 Author Deshpande

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Control
Reviewofof
Filing
Initiating
Custodian
Document
Document
Revisions
Document
of
Document
Review
Document Audit Committee Charter

Maintaining This Document

Overview

The (Head of BU) is the custodian of this document and is responsible for:
 Reviewing it periodically
 Coordinating, consulting and seeking input in the process of reviewing
 Obtaining approval of revisions
 Disseminating updates to stakeholders and interested parties
All questions regarding the document should be addressed to the (Department).

Document Author will initiate new document or revisions for the review of the Business Unit Head
by completing a copy of the Document Creation/Revision Request form (see form above).
________________________________________________________________________
The Business Unit Head must review the document to assess its relevance to current circumstances
and its applicability to business needs, change in risk profile, industry regulations and other factors.
At a minimum, every document must be reviewed annually.

The Corporate Strategy Department acknowledges, reviews, and considers all proposed revisions
for inclusion in this document. Author are advised of the final disposition of their requests.
Approved material is published as a revision in Mowasalat SharePoint by the Corporate Strategy
Department.

Each revision distributed to document owners is accompanied by a revision memo listing the
clauses, section, and page number of the page(s) being superseded.

When a revision is received:


 Read the text carefully.
 Check the revision memo to ensure that all listed pages have been received.
 Remove and destroy the superseded pages.
 Corporate Strategy Department will ensure latest version is captured into Mowasalat
SharePoint.

1.0 Introduction

Charter Title Audit Committee Charter Date of this 10/7/2018


version
Charter Identification TC/CHR/___/_______
Khadiga El Hashim & Avinash
Version 0 Author Deshpande

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Audit Committee Charter

The Audit committee is established by the Board of Directors to govern the


activities and operations of Internal Audit Department and is approved by the
Audit Committee members appointed by the Board of Directors of Mowasalat.

The Chairman shall review this Charter in collaboration with the Committee members
once every year and approve any changes or updates.

2.0 Purpose

The audit committee performs its role by providing an


independent oversight to the Board of Directors (BOD). The
purpose of the audit committee is to provide a structured,
systematic oversight of the organization's governance, risk
management, and internal control practices. The committee
assists the board and management by providing advice and
guidance on the adequacy of the organization's initiatives for:

 Values and ethics.


 Governance structure.
 Risk management.
 Internal control framework.
 Oversight of the internal audit activity, external auditors, and other
providers of assurance.
 Financial statements and public accountability reporting.
The Internal Audit Activity is governed by The Institute of
Internal Auditors' mandatory guidance including the Definition
of Internal Auditing, the Code of Ethics, and the International
Standards for the Professional Practice of Internal Auditing
(IPPF).

3.0 Authority and Committee Structure

Charter Title Audit Committee Charter Date of this 10/7/2018


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Charter Identification TC/CHR/___/_______
Khadiga El Hashim & Avinash
Version 0 Author Deshpande

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Audit Committee Charter

3.1 Authority

The Internal Auditor will report functionally and administratively to the Audit
Committee.

The Audit Committee will:

 Approve the Internal Audit Charter


 Approve the Internal Audit Strategic Plan
 Approve the Risk based Annual Internal Audit Plan
 Recommend and endorse the Internal Audit budget and resource plan
as part of the Annual Budget Approval Process
 Receive communications from the Corporate Internal Audit Manager on
the Internal Audit activities performance relative to its plan and other
matters
 Approve decisions regarding the appointment and removal of the
Corporate Internal Audit Team
 Make recommendations to Mowasalat Board of Directors with regard to
all matters related to Audit Plans

3.2 Committee Structure

The Committee is comprised of 3 members from the Board of Directors of


Mowasalat, where the Chairman of the Board is the Chairman of the
Committee supported by 2 Board members.

The Audit Committee shall comprise of:

Chairman of the Board Chairman of Committee


Board Member member – voting rights
Board Member member – voting rights
Corporate Internal Audit Manager member – non-voting rights
Because the responsibilities of the audit committee evolve in
response to regulatory, economic, and reporting
developments, it is important to periodically re-evaluate
members' competencies and the overall balance of skills on
the committee in response to emerging needs.

Charter Title Audit Committee Charter Date of this 10/7/2018


version
Charter Identification TC/CHR/___/_______
Khadiga El Hashim & Avinash
Version 0 Author Deshpande

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Audit Committee Charter

4.0 Duties and Responsibilities of Committee Members

The Internal Audit Committee has no responsibility to obtain management’s approval


on the Audit observations and recommendations or to obtain any management
approval on the adequacy of Audit report. The audit committee is empowered to:

 Appoint, compensate, and oversee all audit and non-audit services


performed by auditors, including the work of any registered public
accounting firm employed by the organization.
 Resolve any disagreements between management and the external
auditor regarding financial reporting and other matters.
 Preapprove all auditing and non-audit services performed by auditors.
 Review and assess the policies, procedures, and practices established
by the governing body to monitor conformance with its code of conduct
and ethical policies by all managers and staff of the organization.
 Provide oversight of the mechanisms established by management to
establish and maintain high ethical standards for all of the managers
and staff of the organization.
 Review and provide advice on the systems and practices established
by management to monitor compliance with laws, regulations, policies,
and standards of ethical conduct
 To obtain reasonable assurance with respect to the organization's
governance process, the audit committee will review and provide advice
on the governance process established and maintained within the
organization and the procedures in place to ensure that they are
operating as intended.
 To obtain reasonable assurance with respect to the organization's risk
management practices
 To annually review the organization's risk profile.
 To Obtain from the Corporate Internal Audit Manager (CIAM) an annual
report on management's implementation and maintenance of an
appropriate enterprise wide risk management process.
 Provide oversight on significant risk exposures and control issues,
including fraud risks, governance issues, and other matters needed or
requested by senior management and the board.
 Provide oversight of the adequacy of the combined assurance being

Charter Title Audit Committee Charter Date of this 10/7/2018


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Charter Identification TC/CHR/___/_______
Khadiga El Hashim & Avinash
Version 0 Author Deshpande

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Audit Committee Charter

provided.
 Review and provide advice on the risk management processes
established and maintained by management and the procedures in
place to ensure that they are operating as intended.
 To oversee management's arrangements for the prevention and
deterrence of fraud.
 To ensure that appropriate action is taken against known perpetrators
of fraud.
 To challenge management and internal and external auditors to ensure
that the entity has appropriate antifraud programs and controls in place
to identify potential fraud and ensure that investigations are undertaken
if fraud is detected.
 To consider the effectiveness of the organization's control framework,
including information technology security and control.
 To review and provide advice on the control of the organization as a
whole and its individual units.
 To receive reports on all matters of significance arising from work
performed by other providers of financial and internal control assurance
to senior management and the board.
 Review the effectiveness of the system for monitoring compliance with
laws and regulations and the results of management's investigation and
follow-up (including disciplinary action) of any instances of
noncompliance.
 Review the observations and conclusions of internal and external
auditors and the findings of any regulatory agencies.
 Review the process for communicating the code of conduct to the
organization's personnel and for monitoring compliance.
 Obtain regular updates from management and the organization's legal
counsel regarding compliance matters.
 Review the external auditors' proposed audit scope and approach,
including coordination of audit effort with the internal audit activity.
 Review the performance of the external auditors, and exercise final
approval on the appointment or discharge of the auditors.
 Obtain statements from the external auditors about their relationships
with the organization, including non-audit services performed in the
past, and discuss the information with the external auditors to review
and confirm their independence.

Charter Title Audit Committee Charter Date of this 10/7/2018


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Charter Identification TC/CHR/___/_______
Khadiga El Hashim & Avinash
Version 0 Author Deshpande

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Audit Committee Charter

 Have regularly scheduled exclusive meetings with external auditors to


discuss any sensitive matters.
 Monitor management's progress on action plans
 Review with management and the external auditors the results of audit
engagements, including any difficulties encountered.
 Review significant accounting and reporting issues, including complex
or unusual transactions and highly judgmental areas, and recent
professional and regulatory pronouncements, and understand their
impact on the financial statements.
 Review the annual financial statements, and consider whether they are
complete, consistent with information known to committee members,
and reflect appropriate accounting principles.
 Review other sections of the annual report and related regulatory filings
and consider the accuracy and completeness of the information before
it is released.
 Review with management and the external auditors all matters required
to be communicated to the audit committee under generally accepted
external auditing standards.
 Understand strategies, assumptions and estimates that management
has made in preparing financial statements, budgets, and investment
plans.
 Understand how management develops interim financial information
and the nature and extent of internal and external auditor involvement
in the process.
 Review interim financial reports with management and external auditors
before filing with regulators and consider whether they are complete
and consistent with the information known to committee members.
 Perform other activities related to this charter as requested by the
governing body.
 Institute and oversee special investigations as needed.
 Regularly evaluate its performance and that of its individual members.

5.0 Oversight of the Internal Audit Activity and Other Assurance Providers

Charter Title Audit Committee Charter Date of this 10/7/2018


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Charter Identification TC/CHR/___/_______
Khadiga El Hashim & Avinash
Version 0 Author Deshpande

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Audit Committee Charter

Internal Audit Activity


To obtain reasonable assurance with respect to work of the
internal audit activity, the audit committee will provide
oversight related to:

Internal Audit Charter and Resources


 Review and approve the internal audit charter at least annually. The
charter should be reviewed to ensure that it accurately reflects the
internal audit activity's purpose, authority, and responsibility, consistent
with the mandatory guidance of The IIA's International Professional
Practices Framework and the scope and nature of assurance and
consulting services, as well as changes in the financial, risk
management, and governance processes of the organization and
reflects developments in the professional practice of internal auditing.
 Advise the board about increases and decreases to the requested
resources to achieve the internal audit plan. Evaluate whether any
additional resources are needed permanently or should be provided
through outsourcing.

6.0 Terms of Office


The term of office for an audit committee member is [three
years. Continuance of audit committee members will be
reviewed annually. To ensure continuity within the audit
committee, the appointment of members should be
staggered.

Quorum
The quorum for the audit committee will be a majority of the members.

7.0 Operational Principles

Communications
The audit committee expects that all communication with
management and staff of the organization as well as with

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Charter Identification TC/CHR/___/_______
Khadiga El Hashim & Avinash
Version 0 Author Deshpande

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Audit Committee Charter

any external assurance providers will be direct, open, and


complete.

Work Plan
The audit committee chair will collaborate with senior
management and the Corporate Internal Audit Manager to
establish a work plan to ensure that the responsibilities of
the audit committee are scheduled and will be carried out.

Meeting Agenda
The chair will establish agendas for audit committee
meetings in consultation with audit committee members,
senior management, and the Corporate Internal Audit
Manager.

Information Requirements
The Chairman of the Audit Committee will establish
requirements for information, which will include the nature,
extent, and timing of information. The Corporate Internal
Audit Manager will communicate the above requirements to
the audit committee at least one week prior to each audit
committee meeting.

Executive Sessions
The audit committee will schedule, and hold if necessary, a
private session with the Managing Director & CEO, Finance
Director, Corporate Internal Audit Manager, external
assurance providers, and with any other officials that the
audit committee may deem appropriate at each of its
meetings.

Charter Title Audit Committee Charter Date of this 10/7/2018


version
Charter Identification TC/CHR/___/_______
Khadiga El Hashim & Avinash
Version 0 Author Deshpande

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Audit Committee Charter

Preparation and Attendance


Audit committee members are obligated to prepare for and
participate in committee meetings.

Conflict(s) of Interest
Audit committee members should adhere to the
organizations code of conduct and any values and ethics
established by the organization. It is the responsibility of
audit committee members to disclose any conflict of interest
or appearance of a conflict of interest to the committee. If
there is any question as to whether audit committee
member(s) should recuse themselves from a vote, the
committee should vote to determine whether the member
should recuse himself or herself.

8.0 Operational Procedures

Meetings
The audit committee will meet at least every quarter of the
any fiscal year or more frequently as the committee deems
necessary. The time frame between audit committee
meetings should not exceed four months.

Minutes
Minutes will be prepared in accordance with applicable law,
regulation, bylaw, policy, procedure, and/or other applicable
requirements. Meeting minutes will be provided in draft
format at least two weeks after the audit committee meeting.

Charter Title Audit Committee Charter Date of this 10/7/2018


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Charter Identification TC/CHR/___/_______
Khadiga El Hashim & Avinash
Version 0 Author Deshpande

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Audit Committee Charter

Reporting on Audit Committee Performance


The audit committee will report to the board annually,
summarizing the committee's activities and
recommendations. The report may be delivered during an
audit committee meeting attended by the board or during a
regularly scheduled meeting of the board.

The report should include:

 A summary of the work the audit committee performed to fully discharge


its responsibilities during the preceding year.
 A summary of management's progress in addressing the results of
internal and external audit engagement reports.
 An overall assessment of management's risk, control, and compliance
processes, including details of any significant emerging risks or
legislative changes impacting the governing organization.
 Details of meetings, including the number of meetings held during the
relevant period and the number of meetings each member attended.
 Provide information required, if any, by new or emerging corporate
governance developments.
The committee may report to the governing body at any time
regarding any other matter it deems of sufficient importance.

9.0 Dismissal
Members who are absent without reasonable cause for
three successive meetings will be considered to have
resigned their seat. The committee will nominate a
replacement which is subject to the Managing Director and
CEO’s approval.

-end-

Charter Title Audit Committee Charter Date of this 10/7/2018


version
Charter Identification TC/CHR/___/_______
Khadiga El Hashim & Avinash
Version 0 Author Deshpande

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