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AL MAlAYA HOLDING COMPANY K.S.C. (CLOSED) AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2008
(All amounts are in Kuwaiti Dinars)
u) Borrowings
Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are
subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs)
and the redemption value is recognized in the consolidated statement of income over the period of the
borrowings using the effective interest method.
v) End of service indemnity
Provision is made for amounts payable to employees under the Kuwaiti Labor Law in the private
sector and employees' contracts. This liability, which is unfunded, represents the amount payable to
each employee as a result of involuntary termination on the balance sheet date, and approximates the
present value of the final obligation.
w) Treasury shares
Treasury shares consist of the Parent Company's own shares that have been issued, subsequently
reacquired by the Parent Company and not yet reissued or canceled. The treasury shares are
accounted for using the cost method. Under the cost method, the weighted average cost of the shares
reacquired is charged to a contra equity account. When the treasury shares are reissued, gains are
credited to a separate account in shareholders' equity (treasury shares reserve) which is not
distributable. Any realized losses are charged to the same account to the extent of the credit balance
on that account. Any excess losses are charged to retained earnings then reserves.
Gains realized subsequently on the sale of treasury shares are first used to offset any recorded losses
in the order of reserves, retained eamings and the gain on sale of treasury shares account. No cash
dividends are paid on these shares. The issue of bonus shares increases the number of treasury
shares proportionately and reduces the average cost per share without affecting the total cost of
treasury shares.
Where any Group's company purchases the Parent Company's equity share capital (treasury shares),
the consideration paid, including any directly attributable incremental costs is deducted from equity
attributable to the Parent Company's equity holders until the shares are cancelled or reissued. Where
such shares are subsequently reissued, any consideration received, net of any directly attributable
incremental transaction costs, is included in equity attributable to the Parent Company's equity
holders.
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