Results of the Annual Audit and Internal Control Proce- dures of the Company: The Internal Audit and Control Department performs the audits on a constant basis and implements an annual audit plan based on a risk assessment system for the Company and its subsidiaries. The audit committee approves the audit plan after ensuring it includes all necessary programs to be examined and assessed, and that it is in line with the internal control and audit standards. To verify effectiveness of the internal audit system with regard to protection of assets, risk assessment, and evaluation of the adequacy of performance, the Internal Audit and Control Department submits regular reports to the audit committee. These auditing processes have not revealed any material deficiency in the internal control system of the Company. Moreover, within the scope of its review of the Company’s final accounts on a quarterly basis, the external auditor reviews all reports of the Internal Audit and Control Department for the relevant financial period. The external auditor shall also have the right to review the minutes of the audit committee meetings in order to provide a professional opinion. In turn, the audit committee will discuss all the observations made and ensure that all relevant departments take the necessary corrective actions to this effect within the planned timeframe. Corporate governance The Company complies with corporate governance standards, conducts regular review of its policies and procedures, and establishes policies and procedures that promotes transparency and disclosure. The Company also implements all obligatory provisions stated in the corporate governance regulation issued by the Capital Markets Authority and its Articles of Association, as well as all its policies with exception of the following:
Article
Provision
Reasons for non-compliance
Geographic analysis of the source’s total revenue and of the total revenue of its subsidiaries abroad. Cumulative voting method should be applied when voting to select the Board members in the General As- sembly
Due to the nature of the Company’s business, the vessels of the Company and its subsidiaries operate in the high seas and carry shipments between multiple ports world-wide
27/4
The Company’s basic regulation was amended, so that the cumulative voting method will be applied at the end of the current Board’s term ending on December 31, 2016, in ac- cordance with the corporate governance regulation issued by the Capital Market Authority and any amendments in force from time to time.
6/B
85
The National Shipping Company of Saudi Arabia ( )
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