Bahri Annual Report- 2018

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121

Annual Report 2018

Notes to the consolidated financial statements – continued For the year ended 31 December 2018

4. SIGNIFICANT ACCOUNTING POLICIES (continued)

5. OPERATING SEGMENTS

4.19. Employees’ end of service benefits (continued)

The Group has the following four strategic divisions, which are its reportable segments. These divisions offer different services and are managed separately because they have different economic characteristics – such as trends in sales growth, rates of return and level of capital investment – and have different marketing strategies.

3. Other long-term employee benefits The Company’s obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior years. That benefit is discounted to determine its present value if the impact is material. Remeasurements are recognised in profit or loss in the year in which they arise. 4. Termination benefits Termination benefits are expensed at the earlier of when the Company can no longer withdraw the offer of those benefits and when the Company recognises costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date, then they are discounted. Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the consolidated statement of profit or loss net of any reimbursement. 4.20. Provisions

a) The following schedule illustrates the Group’s activities according to the operating segments for the year ended 31 December:

Oil transportation 3,692,550 (3,146,670)

Dry bulk transportation

Head office and Others

Chemical 872,174 (752,004) 15,011 135,181 (3,674) (8,904) (62,028)

Logistic

Total

31 December 2018

Revenue

1,158,022 (926,594)

387,389 (349,568)

19,775 (8,442)

6,129,910 (5,183,278)

Operating cost Bunker subsidy

267,738 813,618

10,853 242,281 (22,009)

293,602

Gross profit

37,821 (14,767)

11,333

1,240,234 (162,767)

General and administrative expenses Other income (expenses), net

(2,086) 9,884

(120,231)

4.21. Contingent assets and liabilities

6,405

1,165

2,168

10,718

Contingent assets are not recognized in the consolidated financial statements but are disclosed when an inflow of economic benefits is probable. An assessment is made at each reporting date to recognize contingent liabilities which are probable obligations arising from past events whose existence is confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly under the control of the Group.

Finance cost

(248,587)

(25,561)

(11,294)

(41,643) (118,529) (266,902)

(389,113) (118,529) 580,543

Share in a result of an associate Income before zakat & taxes

572,829

60,575

201,116

12,925

4.22. Earnings per share - EPS

The Group’s vessels are deployed throughout the world and are not concentrated in certain geographical areas. The Group’s management does not consider the geographical distribution of the group’s operations to be relevant for their internal management analysis and therefore no geographical segment information has been disclosed. Operating revenues include an amount of SAR 2.3 billion for the year ended 31 December 2018 (31 December 2017: SAR 2.5 billion). representing the Group’s total revenues from one customer (ARAMCO and its affiliates - shareholder) which represents more than 10 % of the Group’s operating revenues.

The Group determines basic earnings per share by dividing profit or loss attributable to ordinary equity holders (the numerator) by the weighted average number of ordinary shares outstanding (the denominator) during the year. The weighted average number of ordinary shares outstanding during the year is the number of ordinary shares outstanding at the beginning of the year, adjusted by the number of ordinary shares bought back or issued during the year multiplied by a time-weighting factor. The time-weighting factor is the number of days that the shares are outstanding as a proportion of the total number of days in the year; a reasonable approximation of the weighted average is adequate in many circumstances. Diluted EPS amounts are calculated by dividing the profit attributable to equity shareholders of the Parent by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

Oil transportation 3,726,244 (3,110,785)

Dry bulk transportation

Head office and Others

Chemical 805,270 (677,289) 137,823 (15,830) (26,783) (58,657) 9,842

Logistic

Total

31 December 2017

4.23. Statutory reserve

Revenue

1,137,955 (803,670)

362,297 (315,299)

14,069 (3,975)

6,045,835 (4,911,018)

In accordance with the Saudi Arabian Regulations for Companies, the Group must transfer 10% of the net income in each year to the statutory reserve until it has built a reserve equal to 30% of the share capital. This reserve is not available for distribution to the shareholders of the Company.

Operating cost Bunker subsidy

164,986 780,445

11,036 345,321 (2,311) 7,058 (23,854)

185,864

4.24. Bunker subsidy

Gross profit

46,998 (15,088)

10,094

1,320,681 (171,274) (15,854) (308,435)

General and administrative expenses Other income (expenses), net

Bunker subsidy is recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to expenses item, it is recognized as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. The Group recognizes unconditional government grant related to bunker purchase in consolidated statement of income as bunker subsidy income.

(5,706)

(132,339)

1,366

2,505

Finance cost

(160,804)

(20,485)

(44,635) 82,153 (82,222)

Share in a result of an associate Income before zakat & taxes

82,153 907,271

4.25. Segment reporting

613,935

36,553

326,214

12,791

A reporting segment is a component of the Group that engaged in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operation segments’ operating results are reviewed regularly by the Group’s chief operating decision makers about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available. The Group is organized into business units based on their operations and has the following reportable segments: • Transportation of oil • Transportation of chemicals • Logistics • Transportation of dry bulk • Head office and Others The Group’s management reviews the above segments for quantitative thresholds as well as criteria for presenting the revenues and expenses for the segments at the end of every reporting year.