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AL MAZAYA HOLDING COMPANY K.S.C.P. AND ITS SUBSIDIARIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
SEPTEMBER 30, 2023
(All amounts are in Kuwaiti Dinars)

11. Contingent liabilities
As at September 30, 2023, the Group is contingently liable in respect of letters of guarantee amounting to KD 265,691
(December 31, 2022 - KD Nil, September 30, 2022 - KD Nil).

During the year ended December 31, 2020, two subsidiaries of the group had filed lawsuits before the courts of the
Emirate of Dubai in the United Arab Emirates against some investors regarding the development of real estate projects
in the Emirate of Dubai in the United Arab Emirates. During the year ended December 31, 2021, the Court of Cassation
upheld the judgment issued by the Court of Appeal, which had previously upheld the judgment of the Court of First
Instance issued in favor of the two subsidiaries of the group about their entitlement to a total amount of AED 19,780,852,
in addition to the legal interest of 9% from the date of the judicial claim till full settlement, whereby the entitlement of
those subsidiaries including the legal interest until December 31, 2021 had amounted to AED 25,968,142 (equivalent
to KD 2,172,715) according to the latest calculations for that entitlement by the court, and hence, the management of
those subsidiaries had decided to reverse the provisions recorded in their books against their full entitled amount
according to the Court’s verdict including the legal interest up till December 31, 2021 which is reported as provisions no
longer required in the consolidated statement of profit or loss for the year ended December 31, 2021. The subsidiaries
of the group initiated legal execution procedures against those investors for the fulfillment of that verdict along with its
legal interest, which resulted in the collection of almost 82% from the total amount due to the two subsidiaries till
September 30, 2023, whereas the remaining amount is currently under collection by the Group’s two subsidiaries in the
United Arab Emirates. As a result of those lawsuits, the defendants filed a counter-lawsuit against the Parent Company,
the two subsidiaries and others demanding for the payment of AED 261,026,454 (equivalent to KD 21,839,692) in
addition to the legal interest of 5% from the date of the judicial claim till full settlement, in addition to demanding payment
of AED 50,000,000 (equivalent to KD 4,183,425) as compensation for lost profits. Subsequent to the date of the
accompanying interim consolidated financial information, a court verdict was issued by the Court of First Instance in
favor of the defendants (Parent Company, the two subsidiaries, and others) not to consider this case and obligating the
plaintiffs to pay the deferred fees in that case. Accordingly, the Group’s independent legal counsel believes that the
Group has a solid standing in those cases in light of the ruling issued in its favor, and hence, the Group’s management
decided that there is no need to book any provisions against those cases as of the date of the accompanying interim
consolidated financial information.

During the financial period ended September 30, 2023, a final court verdict by Court of Cassation of United Arab
Emirates was issued to affirm the previously issued verdict against a subsidiary of the Group in United Arab Emirates
with an amount of AED 5,000,000 (equivalent to KD 418,343). The Group is currently in process of completing the
settlement procedures to the opponent against the related provisions that were previously booked in prior years for that
legal case.

During the period ended September 30, 2023, some buyers of real estate units in one of the Group’s projects in the
Emirate of Dubai filed a lawsuit demanding to terminate the booking forms of the subject real estate units and to refund
an amount of AED 5,530,321 (equivalent to KD 462,714) in addition to legal interest of 9% till full settlement date. The
Group had recognized provision of KD 462,714 on conservatism basis against that legal case during the fiscal period
ended September 30, 2023. This case is currently under hearing in front of the legal courts as of accompanying interim
consolidated financial information date.

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