Board of Directors Report 2011
Disclosure and Governance
and international standards, which reflect fairly on the Company’s assets and liabilities and that the Company is in a position to continue its business activities and implement its future expansion plans. Additionally, there are no risks or constraints affecting the Company’s ability to continue its work. The Board of Directors is always keen to make the optimal use of the resources of the Company and operation of its assets for the best benefit of shareholders. The Board applies the latest methods and related systems in this regard. The Board of Directors confirms that there is no interest in the class of shares with voting right pertaining to people who have reported such rights to the issuer pursuant to the provisions of Article (30) of the Listing Rules. The Board of Directors also confirms that the internal control system has been prepared on a sound basis and is being implemented effectively; that the results of annual audit of internal control procedures are effective and sound; that no punishment, penalty or precautionary restriction has been imposed on the Company by the CMA or by any supervisory, regulatory or other judicial body in 2011. The chairman of the Board of Directors of the National Shipping Company of Saudi Arabia (BAHRI) is also the Chairman of the Arabian Agricultural Services Company (ARASCO) and one of its owners. The National Shipping Company of Saudi Arabia owns (60%) and Arabian Agricultural Services Company owns (40%) of the Bahri Dry Bulk company share capital. The 2011 annual report depicts the current status of the Company with respect to the provisions of presentation and disclosure set forth in paragraph (b) of Article 27 of the Listing Rules, and paragraph (c) of Article 1 of the Rules of Corporate Governance issued by the Capital Market Authority, except for the following:
Strong governance is essential to safeguard the reputation of the Company and to maintain the success of any business in the long term. Bahri has a clear, transparent and effective policy to deal with all the stakeholders in the Company. These policies have been set out in line with the business rules and regulations governing the work of Bahri and issued by competent bodies. Bahri discloses all its activities and publishes all data, financial results and facts that have a significant impact on its business. In December 2011, Bahri was selected as one of the top 50 companies in the Arab world to embody the standard of social environmental index and governance. This index has been developed by the Institute of Corporate Governance in cooperation with Standard & Poor’s. It is based on a thorough review of annual reports of companies, their websites, publications and ongoing disclosures on the financial markets. Bahri publishes its annual reports and resolutions relating to its business activities in the local newspapers. Bahri also displays these details on Tadawul website and on the Company’s website (www.bahri.sa) to make them available to all stakeholders including investors, financiers and others. These reports include all directions related to operating activities and analysis of financial statements. Financial statements and related notes set forth in the annual report are consistent with accounting standards applicable to the Kingdom of Saudi Arabia and with the requirements of presentation and disclosure as set out in corporate governance regulations. The Board of Directors represents that the accounting records of the Company are prepared in an automated manner using Oracle Software. The Board also represents that the consolidated financial statements and attached notes as stated in this annual report have been prepared properly in accordance with Generally Accepted Accounting Standards of the Saudi Organization for Certified Public Accountants
Reasons for Non-Compliance
Article 27-Para B Geographical distribution of the total revenue of the exporter and total revenues of its affiliate outside the Kingdom Article 1 – Para C Cumulative voting method must be followed to select members of the Board of Directors in the General Assembly.
Due to the nature of work of the Company, its vessels and vessels of its affiliates operate in the high seas, and their cargo moves between many ports of the world. The Company applies the provisions of regulations duly issued by the Ministry of Commerce and Industry based on the Companies Act with regard to the voting system at the General Assemblies, besides, the method of cumulative voting is not stipulated in the Company’s Articles of Association.
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