Bahri Annual Report-2011

The National Shipping Company of Saudi Arabia

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6. BAREBOAT LEASE RECEIVABLE, NET

The arrangement qualifies as a capital lease as it transfers to Odfjell substantially all the benefits and risks and also gives Odfjell a purchase option under the arrangement. The net bareboat lease receivable balance as of December 31 is summarized as follows:

On January 30, 2009, the National Chemical Carriers Ltd. Co. signed agreements with Odfjell to charter three vessels under bareboat arrangement for a period of ten years with purchase option after three years. These ships were delivered to Odfjell on February 1, 2009.

Description

2011

2010

Future minimum lease payments

467,005 522,439

Un-guaranteed residual value at the end of lease term

247,875 247,875

Total

714,880 770,314

Unearned income

(302,520) (351,340)

Net bareboat lease receivable balance

412,360 418,974

The above amount is classified at December 31 as under:

Description

2011

2010

Current

7,538

6,615

Non-current

404,822

412,359

Net bareboat lease receivable balance

412,360 418,974

The future minimum lease payments and unguaranteed residual value at the end of

lease term to be received during the next five years and thereafter is as follows:

2011

2010

Due within 12 months

55,586

55,435

Due within 1-2 years

57,313

55,586

Due within 2-3 years

61,245

57,313

Due within 3-4 years

65,351

61,245

Due within 4-5 years

69,649

65,351

Thereafter

405,736

475,384

714,880 770,314

and is included in the operating revenues in the accompanying consolidated income statement.

Income related to the above arrangement for the year ended December 31, 2011 amounted to SR 48.82 million (2010: SR 49.51 million)

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