The National Shipping Company of Saudi Arabia (A Saudi Joint Stock Company) Notes To The Consolidated Financial Statements December 31, 2013 (In Thousands Saudi Riyals)
m)Accounts payable and accruals Liabilities are recognized for amounts to be paid in the future for goods or services received, whether billed by the supplier or not. n) 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. o) Zakat and tax Zakat is provided for in accordance with the regulations of the Department of Zakat and Income Tax (DZIT) and 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. p) Employees’ end of service benefits Employees’ end of service benefits is provided for on the basis of accumulated services period in accordance with the policy of the Group and in conformity with Saudi Labor Law. End of service benefits in respect of subsidiaries outside the Kingdom of Saudi Arabia are provided for based on the applicable regulations applied to these subsidiaries. q) Statuary reserve Companies, the Company is required to transfer 10% of net income to the statuary reserve. The Company may discontinue such transfers when the reserve equals 50% of the paid-up capital. The reserve is not available for distribution to shareholders. r) Revenue recognition Revenue is recognized as follows: • Transport of Crude Oil, Petrochemicals, and Dry Bulk: Revenues from transport of oil, gas, petrochemicals, and dry bulk are In accordance with article (125) of Saudi Arabian Regulations for
are recognized in the consolidated statement of income. Assets and liabilities shown in the consolidated subsidiaries denominated in foreign currencies are translated into Saudi Riyals at exchange rates prevailing at the consolidated balance sheet date. Revenues and expenses of the consolidated subsidiaries denominated in foreign currencies are translated into Saudi riyals at average exchange rates for the period, The components of equity, other than retained earnings (or accumulated loses, if any) are translated at the date of occurrence of each component. Exchange differences, if material, are included in a separate line item within shareholders’ equity. w) Operating leases Rentals relating to operating leases are recorded at consolidated statement of income using the straight-line method over the period of operating lease. x) Earnings per share and proposed dividends Earnings per share from operating income, other operations and net income for the year is calculated based on the weighted average number of shares outstanding during the year. Proposed dividends after the period end are treated as part of retained earnings and not as liabilities unless the General Assembly approves it before the period end. Once approved by the General Assembly, the amount is recognized as a liability in the same period until paid. y) Segment reporting Operating segment The operating segment is a group of
recognized when earned over the agreed-upon period of the contract, voyage and services. • General Cargo Transportation: the Group follows the complete voyage policy in determining the revenues and expenses of the period for vessels transporting general cargo. A voyage is considered to be a “Complete Voyage” when a vessel has sailed from the last discharging port of a voyage. Shipping revenues, direct and indirect operating expenses of incomplete voyage are deferred until it is completed. Incomplete voyages are shown at the net amount in the consolidated statement of financial position as “Incomplete Voyages”. • Revenues from chartering and other attributable activities are recorded when services are rendered over the duration of the related contractual services. • Other income is recorded when earned. s) Bunker subsidy Bunker subsidy is computed on bunker quantities purchased and consumed by the Group, and recorded in the consolidated statement of income. Provisions are made for doubtful amounts. t) Expenses Direct and indirect operating costs are classified as operating expenses and all other expenses are classified as general and administrative expenses. u) Borrowing costs Borrowings are recognized at the proceeds received, net of transactions costs incurred, borrowing costs that are directly attributable to the construction or production of assets are capitalized as part of those assets. Other borrowing costs are charged to the consolidated statement of income. v) Foreign currency transactions Foreign currency transactions are translated into Saudi Riyals at prevailing exchange rates of the date of transaction. Monetary assets and liabilities denominated in foreign currencies at the consolidated balance sheet date are translated into Saudi Riyals at the prevailing exchange rates of that date. Exchange differences
assets, processes or entities: (1)That are engaged in revenue operating activities; (2) Whose results of operations are continuously analyzed by management in order to make decisions related to resource allocation and performance assessment; and (3) Whose financial information is available separately.
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