M- Impairment of non-current assets The carrying value of non-current assets is reviewed for any indication of a loss as a result of impairment. If such indication exists, the recoverable amount is determined. The recoverable amount is the higher of the asset’s fair value less cost to sell and value in use. If the recoverable amount cannot be determined for an asset, the group will estimate the recoverable amount at the cash-generating units to which belongs to. When the estimated recoverable amount is less than the carrying amount of the assets or cash-generating unit, carrying amounts reduced to the recoverable amount and the impairment loss is recognized as an expense immediately in the consoli- dated statement of income. Except for goodwill, where the impairment loss is subsequently reverses, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but the increased carrying amount should not exceed the carrying amount that would have been determined, had no impairment loss been recognized for the assets in prior years. A reversal on an impairment loss is recognized as income immediately in the consolidated statement of income. N- Accounts payable and accruals Liabilities are recognized for amounts to be paid in the future for goods or services received, whether billed by the suppliers or not. O- Provisions Provisions are recognized when the Group has an obligation (legal or constructive) arising from a past event, and the costs to settle the obligation are both probable and may be measured reliably. P- Zakat and taxes Zakat is provided for in accordance with the regulations of the Department of Zakat and Income Tax (DZIT) in Kingdom of Saudi Arabia, and it is charged to the consolidated statement of income based on the higher of the zakat base or adjusted net income for each individual company. Provision is made for withholding tax on payments to non-resident parties and is charged to the consolidated statement of income. For subsidiaries outside the Kingdom of Saudi Arabia, income tax is provided for in accordance with the regulations applicable in the respective countries and is charged to the consolidated statement of income. Q- Employees’ end of service indemnity Employees’ end of service benefits are provided on the basis of the accumulated services period in accordance with the By-Laws of the Company, Saudi Labor Law, and the applicable regulations applied to overseas subsidiaries. R- Hedge agreements and derivative financial instruments The Group uses derivative financial instruments to hedge its exposure to certain portions of its interest rate risks arising from financing activities. The Group designates these as cash flow hedges of interest rate risk. The use of financial derivatives is governed by the Group’s policies, which provide principles on the use of financial derivatives consistent with the Group’s risk management
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The National Shipping Company of Saudi Arabia ( )
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