The National Shipping Company of Saudi Arabia (A Saudi Joint Stock Company) Notes to the Consolidated Financial Statements As of December 31, 2012 (in Thousands of Saudi Riyals)
t) Statutory reserve In accordance with article 125 of the Saudi Arabian Regulations for Companies, the Company is required to transfer 10% of net income to the statutory reserve until such reserve equals 50% of the paid-up capital. This reserve is not available for distribution to shareholders in accordance with Article 126 of the Regulations for Companies. u) Earnings per share and proposed dividends Earnings per share from operating income, other operations and net profit is calculated based on the weighted average number of shares outstanding during the year. Dividends proposed for payment after the year end are treated as a part of retained earnings and not as liabilities, unless the General Assembly’s approval was before the end of the year. Once approved by the General Assembly, the amount is recognized as a liability in the same period until paid. v) Trade accounts receivable Trade accounts receivable are stated at net realizable value after deducting provision for doubtful debts. A provision against doubtful debts is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Such provisions are charged to the consolidated statement of income and reported under “General and administrative expenses”. When an account receivable is uncollectible, it is written-off against the provision for doubtful debts. Any subsequent recoveries of amounts previously written-off are credited against “General and administrative expenses” in the consolidated statement of income. w) Segment reporting Business segment. A business segment is a group of assets, operations or entities: • engaged in revenue producing activities; • results of its operations are continuously analyzed by management in order to make decisions related to resource allocation and performance assessment; and • financial information is separately available.
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