risks. For this reason, the company has participated in protection clubs and held a variety of agreements with insurance companies in the following areas: * Marine insurance - including insurance coverage of the fleet and equipment as well as crew and cargo carried on the vessels, civil liability and the consequent marine riskswhereby certain countries stipulate that to enter their ports, vessels must have proper insurance coverage consistent with the requirements of these countries. * Non-maritime insurance - including comprehensive coverage of the company’s offices, buildings and vehicles and personnel as needed in addition to medical insurance of the employees in accordance with the guidelines of the Health Insurance Council. * Protection & Indemnity Clubs - The size of the company and its fleet enabled it to be an active member in two of the largest clubs of protection in the United Kingdom, where these clubs cover risks arising from the accidents of ships and damaged cargo. Being a member of the clubs, the company is entitled to vote on certain resolutions of the Club related to protection and compensation strategy. This membership will be of great benefit to the company through the exchange of experience and avoiding exposure to any additional contingent costs. Professional analysis and follow up specialists conduct constant assessment of the company’s ongoing needs for insurance coverage to cope with market development consistent with its business activities and safeguarding of its interests. Because of the high cost of Marine Insurance, the company opted to conclude all its agreements with highly experienced, large and financially sound insurance companies.
The shipping industry is replete with risks at the financial, informational and operational levels. The company has paid great attention to these risks and proceeded to apply a set of measures to address such risks through a control system in which all departments of the company are involved in a variety of ways. Financial Operations: The company established a special treasury department managed with distinctive competence to monitor the financial markets, analyze data, study market trends, follow up changes in exchange and interest rates in order to avoid the risk of inflation, credit risks, fluctuations in exchange and interest rates and to determine the best ways to reduce financial risks and explore the available investment opportunities to utilize the company’s surplus cash funds. Information Security: The Information Technology Department adopts the best practices in the areas of security system and protection of computer hardware and software used in the field of information and communications. In this regard, a set of software and means of protection are currently in place to achieve full safety and to safeguard confidentiality of information against attempts of cyber crimes. Operations: In applying the necessary precautionary measures to safeguard corporate property and protect the interests of the shareholders from damage and loss and to cover the extraordinary costs arising from unforeseen events and serious dangers that overshadow the maritime shipping industry, the company has endeavored to avoid the risks that may hinder the smooth flow of work and minimize the impact of such
Annual Report 2009 The National Shipping Company of Saudi Arabia
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