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AL MAZAYA HOLDING COMPANY K.S.C. (CLOSED) AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2007
(All amounts are in Kuwaiti Dinars)
34.
General assembly and proposed dividends
The Board of directors proposed a cash dividend of 50 fils per share and bonus shares of 20 shares for every
100 shares held. This proposal is subject to the approval of the shareholders'
annual General Assembly.
The General Assembly held on March 21, 2007 approved the distribution of cash dividend of 50 fils per share
and 10 bonus shares for every 100 shares held as of the General Assembly date, for the year ended
December 31, 2006.
35.
Financial risk management
In the normal course of business, the Group uses primary financial instruments such as cash and cash
equivalents, investments, accounts receivable, accounts payable, term loans and Wakala and Murabaha
payables and as a result, is exposed to the risks indicated below. The Group currently does not use
derivative financial instruments to manage its exposure to these risks.
a) Interest rate risk
Financial instruments are subject to the risk of changes in value due to changes in the level of interest. The
effective interest rates and the periods in which interest bearing financial assets and liabilities are repriced or
mature are indicated in the respective notes.
The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all
other variables held constant, of the Group's profit (through the impact on floating rate borrowings). There is
no impact on Group's equity.
Increase / decrease in Sensitivity to net
Year
basis ~oints
interest ex~ense
2007
KD
25
116,889
AED
25
19,997
2006
KD
25
7,075
b) Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation causing the
other party to incur a financial loss. Financial assets which potentially subject the Group to credit risk consist
principally of fixed and short notice bank deposits. The Group's fixed and short notice bank deposits are
placed with high credit rating financial institutions. Receivables are presented net of allowance for doubtful
debts. Credit risk with respect to receivables is limited due to the large number of customers.
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