Notes to The Consolidated Financial Statements
AL MAZAYA HOLDING K.S.C. (HOLDING) AND ITS SUBSIDIARIES
For the year ended 31 December 2011
Management fees, commission and consultancy income
- Management fees are recognized on an accrual basis.
- Commission and consultancy income are recognized at the time the related services are provided.
Dividend income
Dividend income is recognized when the right to receive payment is established.
Gain on sale of investments
Gain on sale of investments is measured by the difference between the sale proceeds and the carrying amount of the
investment at the date of disposal, and is recognized at the time of the sale.
Interest income
Interest income is recognized using the effective interest method. When a receivable is impaired, the Group reduces the
carrying amount to its recoverable amount, being the estimated future cash flow discounted at original effective interest
rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired receivables
is recognized either as cash is collected or on a cost–recovery basis as conditions warrant.
Foreign currencies
The individual financial statements of each Group entity are presented in the currency of the primary economic environment
in which the entity operates (its functional currency). For the purpose of these consolidated financial statements, the results
and financial position of each Group entity are translated into KD which is the functional currency of the Parent Company
and the presentation currency for these consolidated financial statements.
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional
currency (foreign currencies) are recorded at the rates of exchange prevailing at the dates of the transactions. At each
consolidated statement of financial position date, monetary items denominated in foreign currencies are retranslated at the
rates prevailing at the consolidated statement of financial position date.
Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing
at the date when the fair value was determined and resulting exchange differences are transferred to consolidated statement
of comprehensive income for available for sale equity instruments and to consolidated statement of income for debt
instruments. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items are recognised in consolidated statement of income in the period in which they
arise except for:
• exchange differences on foreign currency borrowings relating to assets under construction for future productive use,
which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those
foreign currency borrowings;
• exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is
neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are
recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the
monetary items.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations
are translated into KD using exchange rates prevailing at the consolidated statement of financial position date. Income and
expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly
during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising,
if any, are classified as equity and recognised in the Group’s foreign currency translation reserve. Such exchange differences
are recognised in the consolidated statement of income in the period in which the foreign operation is disposed of
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