Bahri Annual Report-2017

Annual Report 2017

202

203

Notes to the Consolidated Financial Statements (continued) December 31, 2017 (In Thousands Saudi Riyal)

11 Consolidated Financial Statements

32. FIRST-TIME ADOPTION OF IFRS (continued) 32.5 Reconciliation of income for the year ending December 31, 2016

Notes to the Consolidated Financial Statements (continued) December 31, 2017 (In Thousands Saudi Riyal)

31 December 2016 (IFRS)

32. FIRST-TIME ADOPTION OF IFRS (continued)

Note

32.3 Reconciliation of equity

Income as per SOCPA GAAP

1,798,039

1 January 2016

Note

2016

Increase in depreciation expenses

32.6

(41,685)

Total equity under SOCPA GAAP

10,510,942

9,699,078

Increase in service revenue

32.7(A)

5,505

Increase in accumulated depreciation

32.6 (323,873)

(282,188)

Increase in employees service cost

32.7(B)

(3,926)

(10,187)

(15,693)

Decrease in service revenue recognition

32.7(A)

Decrease in lease finance income

32.7(C)

(8,207)

(11,134)

(11,575)

Decrease in employees’ benefits - actuarial valuation

32.7(B)

Income as per IFRS as endorsed in KSA

1,749,726

Decrease in finance lease receivable Equity under IFRS as endorsed in KSA

(78,651)

(70,443)

32.7(C)

10,087,097

9,319,179

Other comprehensive income

4,367

Total comprehensive income as per IFRS as endorsed in KSA

1,754,093

32.4 Reconciliation of total comprehensive income for the year ending December 31, 2016

31 December 2016 (IFRS as endorsed in KSA)

32.6 Property and equipment Under IFRS as endorsed in KSA, property and equipment should be componentized and depreciated over each components’ useful life separately. The cost of dry docking is capitalized and depreciated separately over the period till the next dry docking retrospectively, which previously was depreciated over the useful life of the assets.

31 Decemeber 2016 (SOCPA GAAP)

Effect of IFRS Transition

Note

32.7 Other adjustments

32.7

6,788,789

(305)

6,788,484

Revenues

At the time of IFRS adoption as endorsed in KSA, the Group has recognized the below adjustments as at January 1, 2016, the date of IFRS transition, and as at December 31, 2016:

Operating costs

32.6/7

(4,983,302)

(47,109)

(5,030,411)

Gross profit before bunker subsidy

1,805,487

(47,414)

1,758,073

Bunker subsidy

134,258

A. Revenue of a single voyage which involves multiple discharge points, percentage of completion applied separately for each cargo delivered. Therefore, revenue has been recalculated and adjusted for the voyages in progress at the transition date and for the year ending December 31, 2016 based on the percentage of completion. B. The Group recorded its end of service liability based on the labor laws regulatory requirements. In order to determine the liability under IFRS standards, the Group performed detail actuarial valuation of its end of services benefits. Consequently, increase in the liability for the prior year has been recorded in the opening retained earnings, the consolidated statement of income and the consolidated statement of comprehensive income for the year ending December 31, 2016. C. The Group has recognized a reduction in the value of the receivable from finance lease balance based on the nature and term of the arrangement. Therefore, receivable from finance lease balance decreased as at the transition date and for the year ending December 31, 2016. 32.8 Reclassifications of Sukuk issuance and loans arrangement fees The Group has incurred certain Sukuk issuance and loans arrangement fees, and under SOCPA standards, these costs have been recorded as prepaid financing. IFRS standards require these costs to be offset against the liability of which these costs were incurred. The respective cost has been netted off against Sukuk and long-term loans.

Gross profit

1,939,745

(47,414)

1,892,331

General and administrative expenses

32.7

(112,649)

1,587

(111,062)

Other expenses, net

(1,508)

Total operating profit

1,825,588

(45,827)

1,779,761

Finance income

18,955

Finance costs

32.7

(237,075)

(2,486)

(239,561)

Share in results of an associate

147,044

Income before zakat and taxes

1,754,512

(48,313)

1,706,199

Zakat and taxes, net Net income for the year

43,527

1,798,039

(48,313)

1,749,726

OCI not to be reclassified to income or loss Re-measurement gain on defined benefit plans

32.7

4,367

Total comprehensive income

1,798,039

(43,946)

1,754,093