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Audit Committee Charter



The Board of Directors being the governing body of Alujain (the “Company”) has to ensure that the Company’s management maintains adequate policies and internal controls for:

  • Safeguarding the Company’s assets;
  • Properly recording the transactions and events as they take place;
  • Preparing reliable financial information;
  • Oversee and monitor the enterprise-wide risks for managing the Company’s operations

The above aspects must be independently and periodically viewed by the Company’s external as well as Internal Auditors.


To further strengthen this function and to ensure its objectivity and independence, the Board will establish an Audit Committee (the “Committee”). The primary purpose of Audit Committee is to monitor the following Company’s affairs on behalf of the Board:

  • Adequacy and soundness of internal control systems, financial accounting and reporting policies and practices, and effectiveness of internal and external audit functions.
  • Adherence to applicable legal and regulatory requirements and Company’s approved policies and procedures.
  • Adequacy and soundness of policies and procedures in respect of the safety and security of the Company’s assets, resources and integrity of the Company’s financial statements.
  • Performance of the Company’s internal and external audit function and their independence.
  • Establish and oversee a framework for the identification, management and review of risks, including agreeing risk capacity and tolerance. Also the identification of the principal risks of the Company’s business and ensuring implementation of appropriate systems to manage those risks.
  • Contribute to the review and evaluation of strategic risks and receive regular reports on these and emerging risks.
  • Ensure that a positive culture of managing opportunities, threats and uncertainties is embedded throughout the Company.
  • Audit Committee is also responsible for preparing and publishing an annual committee report and such other reports to the extent required under the applicable laws, rules and regulations.


It should be emphasized that Audit Committee duty is to assist the Board in its monitoring role and that this in no way mitigates the Board’s ultimate responsibilities towards shareholders.


Audit Committee Responsibilities

Audit Committee will carry out the following responsibilities:


  • Internal Control and Accounting Policies:
    • Review with the Company’s management and internal & external auditors the Company’s general policies and procedures to reasonably assure the adequacy of accounting principles and financial practices applied by the Company.
    • Consider the effectiveness of the Company's internal control system, including information technology security and control.
    • Understand the scope of internal and external auditors' review of internal control over financial reporting, and review reports on significant findings and recommendations, together with management's responses.
    • Review and comment on significant new or changes to existing policies and procedures adopted by the management.


  • External Audit and Financial Statements:
    • Recommend to the Board the appointment, dismissal and the remuneration of external auditors. Any such recommendation must be made with regard to their independence.
    • Review and confirm the independence of the external auditors by obtaining statements from the auditors on relationships between the auditors and the Company, including non-audit services, and discussing the relationships with the auditors.
    • Review external audit reports; work with and support the external auditors where practicable and to provide an alternative communication link between the external auditors and the Board as and when needed.
    • Oversee the arrangements for the completion of the year end audited financial statements. Review together with the external auditor the audit plan (proposed audit scope and approach); including coordination of the audit effort with the Internal Audit function.
    • Review with the external auditor the audited financial statements with respect to the audit approach, accounting adjustments, recommendations for improving the internal controls and any other significant audit findings before these are presented to the Board.
    • Examination of the adopted accounting policies, providing, opinion and recommendations to the Board.
    • Annually review and evaluate the external auditor’s qualifications, performance and independence, including a review and evaluation of the lead partner, taking into account the opinions of the Company’s management and Internal Auditors, and present its conclusions to the Board. Audit Committee shall assure the regular rotation of the lead audit partner as required under applicable laws and shall consider the regular rotation of the external audit firm itself to assure continuing auditor independence.
    • Review the terms of reference and remuneration for any special audit / consultancy assignment to be performed by the external auditors.
    • On a regular basis, meet separately with the external auditors to discuss any matters that Audit Committee or auditors believe should be discussed privately.
    • Review the external auditor’s comments on the financial statements and follow up the actions taken about them.
    • Review the interim and annual financial statements prior to presentation to the Board of Directors; and to give an opinion and recommendations with respect thereto.
    • Review with management and the independent external auditor the effect of regulatory and accounting initiatives on the Company’s financial statements.
    • Regularly report to the Board any issues that arise with respect to the quality or integrity of the Company’s financial statements, the Company’s compliance with legal or regulatory requirements, the performance and independence of the Company’s independent external auditor, or the performance of the Internal Audit function.


  • Internal Audit:
    • Ensure that the Company maintains an Internal Audit function to provide management and the Audit Committee with ongoing assessments of the Company’s risk management processes and system of internal controls.
    • Recommend to the Chairman of the Board the appointment and dismissal of the Internal Auditor.
    • Oversee the Internal Audit function and review its charter, scope, efficiency, independence, objectivity, performance and work plan.
    • Review with the Internal Auditor the results of the Internal Audit efforts on a quarterly basis, or as deemed necessary, and peruse periodical and annual Internal Audit reports.
    • Review the summary of all Internal Audit reports, including management replies and the exceptions noted and pursue the implementation of the corrective measures in respect of the comments included in the Internal Audit report.
    • Supervise the Company’s Internal Audit function to ensure its effectiveness in executing the activities and duties specified by the Board of Directors.
    • Have the final authority to review and approve the annual audit plan and all major changes to the plan.
    • Ensure there are no unjustified restrictions or limitations, and review and concur in the appointment, replacement, or dismissal of the Internal Auditor.
    • At least once per year, review the performance of the Internal Auditor and concur on the annual compensation and salary adjustment, if required.
    • Review the effectiveness of the Internal Audit function, including compliance with The Institute of Internal Auditors' International Standards for the Professional Practice of Internal Auditing.
    • On a regular basis, meet separately with the Internal Auditor to discuss any matters that Audit Committee or Internal Audit believes should be discussed privately.


  • Compliance:
    • Review the effectiveness of the system for monitoring compliance with laws and regulations and the results of management's investigation and follow-up (including any disciplinary action) of any instances of noncompliance.
    • Review the findings of any examinations by regulatory agencies, and any auditor observations.
    • Review the process for communicating the code of conduct to Company personnel, and for monitoring compliance therewith.
    • Obtain regular updates from management and the Company’s legal counsel regarding compliance matters.
    • Duty of Audit Committee is to periodically report to the Board.


  • Risk Management
    • Oversee and enhance the Company’s risk management framework.
    • Identify and monitor the Company’s key risks evaluate their management and align the Risk Management activities with the overall corporate objectives and policies.
    • Ensure that risks are taken within prudent boundaries.
    • Ensure that written policies and procedures are developed and maintained for the identification, measurement, monitoring and control of all key risks associated with Company’s operations and objectives.
    • Approve risk management policies and procedures that establish the appropriate approval levels for decisions, checks and balances, limits to manage risk and define risk reporting requirements from a management perspective.
    • Receive results of the annual review of the implementation of risk management policies and procedures in the Company from the Internal Auditor, and make recommendations for change where there appear to be issues with inadequate management or problems with the risk measurement methodologies.
    • Provide management oversight of all prudential reviews and to follow up on any required management actions by relevant business areas. Ensure that a forum for "big-picture" analysis of future risks is included after considering trends.
    • Assess critically, the Company’s business strategies and plans from a risk perspective.
    • Discuss policies with respect to risk assessment and risk management, including the Company’s major financial risk exposure and the steps taken by the Company’s management to monitor and control such exposure.
    • Review key risk assessment activities on a periodic basis.
    • Review of any legal claims on the Company.
    • Review of the Company’s Business Continuity Plan (BCP).


  • Reporting Responsibilities:
    • Report regularly to the Board about Audit Committee activities, issues and related recommendations.
    • Provide an open avenue of communication between Internal Auditor, the external auditors, and the Board.
    • Report annually to the shareholders, describing the Committee's composition, responsibilities and how they were discharged, and any other information required by rule, including approval of non-audit services.
    • Review any other reports the Company issues that relate to committee responsibilities.


  • Other Responsibilities:
    • Perform other activities related to these activities as requested by the Board.
    • Follow up on allegations of material, financial, ethical or legal irregularities; look into serious violations of the Company’s policies, alleged breach of legal provisions or contravention of code of ethics, which are highlighted by the Internal Auditor or any other staff member.
    • Institute, oversee and direct any special investigations, as needed, concerning matters relating to the Company’s financial statements, internal controls, compliance with the laws or business ethics.
    • Review all significant issues within the scope of the Committee charter, including any changes in accounting principles, with the management and the external auditors, prior to any decision being reached on reporting practices to be followed by the Company, and report thereon to the Board.
    • Review and assess the adequacy of Audit Committee charter annually, requesting Board approval for proposed changes, and ensure appropriate disclosure as may be required by law or regulation.
    • Review with the management the status of Zakat/tax returns and tax issues.
    • Review the Company’s quarterly and annual financial statements, including the impact of any unusual items.
    • Confirm annually that all responsibilities outlined in this charter have been carried out.
    • Evaluate the performance of the Audit Committee and its individual members' on a regular basis.
    • Audit Committee shall have the authority to engage independent counsel and other advisors, as it deems necessary to carry out its duties.
    • Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, including procedures for the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.

The Audit Committee shall be available at all times to receive suggestions, questions or recommendations from the external auditors, Internal Auditor and the Executive management.


The Audit Committee Structure


  • The Audit Committee shall be comprised of not less than three (3) Non-Executive members of the Board.
  • Members of the Audit Committee shall be appointed by the Board upon the recommendation of the Nomination & Remuneration Committee and may be removed by the Board at its discretion.
  • Shareholders’ General Assembly shall, upon a recommendation of the Board of Directors, issue rules for appointing the members of the Audit Committee and define the term of their office and the procedure to be followed by the Committee.
  • The Audit Committee term of office shall be for a period not to exceed the tenure of the Board. The membership of a Audit Committee member, if he/she is a Director, shall come to an end at the expiry of his membership of the Board or by his/her voluntary resignation from the Audit Committee membership. Non-Director’s membership will cease by way of his/her resignation or at the end of the Committee’s term. The Board may remove Audit Committee member from the membership by a majority vote.
  • All members of the Audit Committee shall meet the independence (please refer to page # 115 for definition) and financial experience requirements to the extent required under the applicable laws, rules and regulations.
  • One of the members shall serve as the Chairperson of the Committee. The Chairperson of the Audit Committee shall be designated by the Board or, if no such designation is made, shall be selected by the affirmative vote of the majority of the Committee.
  • The Audit Committee shall appoint a Secretary to keep records of its proceedings and resolutions.
  • A member should not undertake any technical or administrative work in the Company even by way of consultancy.
  • A member may not have a direct or indirect interest in the work or contracts made to the account of the Company.


Audit Committee Operations


  • The Audit Committee shall meet at such times as shall be determined by its Chairperson, or upon the request of any two of its members.
  • The Audit Committee shall meet at least four (4) times in every financial year and may meet more frequently from time to time as it considers necessary or as may be required by the Board. Unless otherwise directed by the Board, the Audit Committee shall meet at the Company’s Registered Office.
  • No one other than the Audit Committee members shall be entitled to be present at a meeting of the Committee, but others may attend at the invitation of the Committee.
  • The agenda of each meeting shall be prepared by the Chairperson of the Audit Committee and whenever reasonably possible, circulated to each member prior to the meeting date.
  • The Chairperson shall preside, when present, at all meetings of the Committee. The decisions and recommendations of the Audit Committee shall be recorded in a separate minute book maintained for this purpose and signed by the Committee’s Chairman and the Secretary of the meeting.
  • Attendance at the Audit Committee meetings shall be in person and no proxies shall be acceptable.
  • In case of emergencies or situation beyond the Committee’s control and where the Audit Committee cannot be convened, the Audit Committee can take its decisions via circulation.
  • The Audit Committee resolutions shall be taken by majority of votes.
  • The Audit Committee shall submit a summary report to the Board containing its significant observations and recommendations on the matters considered in the Audit Committee meetings.
  • No Audit Committee meeting shall be valid unless attended by the Committee’s

Chairman and one other member or any three members. The Audit Committee shall meet at the invitation of its Chairman or any two members. Such an invitation to be accompanied by the agenda for the meeting and shall be hand delivered or sent to the members electronically or in any other manner at least four (4) days before the date of the meeting, unless waived by mutual consent of all the members. In absence of the Chairman, the Committee will mutually elect the Chairman to preside that specific meeting.

  • Any Director of the Company who is not a Audit Committee member, may attend, as an observer, any of the Committee’s session unless the Audit Committee happens to be in Executive/Private session.
  • The management’s representatives may be invited to attend any or all the Audit Committee meetings. Invitations to such Executives shall be coordinated by the Audit Committee Secretary under the directions of the Committee’s Chairman.
  • The Internal Auditor shall prepare the agenda in consultation with the Committee’s Chairman. The agenda and all necessary supporting documents/materials to be discussed and reviewed at the meeting should be provided to the Audit Committee member at least four (4) days prior to the meeting date. The Audit Committee Secretary shall coordinate the delivery of these documents/materials to the Audit Committee members.
  • A majority of the members of the Audit Committee shall constitute a quorum. Each member of the Audit Committee shall have one vote. A majority of the members present at any meeting at which a quorum is present may act on behalf of the Committee. In case of a tie, the Chairperson’s vote shall be the tie breaker.
  • The Audit Committee shall keep a record of its meetings and report on them to the Board.
  • In discharging its oversight role, the Audit Committee is empowered to investigate any matter brought to its attention with full access to all books, records, facilities

and personnel of the Company and the power to retain outside counsel, auditors or consultants, or incur other expenses for this purpose, which expenses the Company, shall pay. The Audit Committee may require any Executive officer or employee of the Company or any of its subsidiaries, the Company’s outside legal counsel, and the Company’s external auditors to meet with the Audit Committee or any member of the Committee.

  • The Audit Committee shall self-evaluate its performance annually and shall report its findings to the Board. The Audit Committee evaluation shall include an assessment of the performance and commitment of each member to the activities of the Committee.




  • The Audit Committee’s role shall be to review and advise but not to make any business decisions. The Audit Committee shall demonstrate a constructive, supportive and advisory approach.
  • To achieve its objectives the Audit Committee is authorized to:
    • Perform the specific duties and functions enumerated in this Charter and upon the directions and approval of the Board, to investigate any of the Company’s activities.
    • Call on the External Auditors and seek information and clarifications regarding the audit affairs of the Company. It has unrestricted access to the Company’s management and staff at all levels and authority to seek reports or information about the Company’s financial affairs, as it deems necessary to fulfill its responsibilities.
    • Communicate its findings and recommendations for any corrective actions to the Board and shall not issue any directives to the Company’s management in this regard. The Board shall either accept and implement the recommendations of the Audit Committee or advise the Audit Committee of the reasons for any deviations from the proposal of the Audit Committee.