Financial Quarterly Reports 2009

AL MAZAYA HOLDING COMPANY K.S.C. (HOLDING) AND SUBSIDIARIES

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)

MARCH 31, 2009

(All amounts are in Kuwaiti Dinars)

Incorporation and activities

AI Mazaya Holding Company - K.S.C. (Holding) was incorporated on November 7, 1998 under the

Commercial Companies Law No. 15 of 1960 and amendments thereto.

The Parent Company is engaged in investment in local and foreign companies, real estate properties and

consultancy services. The registered Head Office of the Parent Company is at Salhiya complex, Fahed AI

Salem Street, P.O. Box 3546, Safat 13036, Kuwait.

These interim consolidated financial information were approved for issue by the Board of Directors on

May 11,2009.

Basis of presentation

The interimconsolidated financial information has been prepared in accordance with International Accounting

Standard 34 "Interim Financial Reporting". The accounting policies used in the preparation of the interim

consolidated financial information for the period are consistent with those used in the preparation of the

annual consolidated financial statements for the year ended December 31, 2008 except for the changes due

to implementation of certain amendments to the following International Financial Reporting Standards:

lAS 1 "Presentation of Financial Statements" (Revised)

Effective January 1, 2009, The Group has applied lAS 1 (Revised), which has impacted the presentation of

financial statements to enhance the usefulness of the information presented. The revised Standard has

introduced a number of terminology changes (including revised titles for the interim consolidated financial

information) and has resulted in a number of changes in presentation and disclosure. The revised lAS 1 has

introduced a new statement of comprehensive income, wherein all changes in equity arising from

transactions other than with owners in their capacity as owners should be presented. Accordingly only

changes in equity arising from transactions with owners in their capacity as owners are permitted to

presented in the statement of changes in equity.

IFRS 8 "Operating Segments"

Effective January 1, 2009, The Group has applied IFRS 8, which requires disclosure of information to

evaluate the nature and financial effects of the business activities in which it engages and the economic

environments in which it operates. Accordingly, operating segments should be identified on the basis of

internal reports about components of the Group that are regularly reviewed by the chief operating decision

maker in order to allocate resources to the segment and to assess its performance.

lAS 23 "Borrowing Cost" (Revised)

Effective January 1, 2009, The Group has applied lAS 23 (Revised), which requires a Group to capitalize

borrowing costs attributable to the acquisition, construction or production of a qualifying asset as a part of the

cost of that asset and removing an option of expensing these borrowing costs in the consolidated statement

of income.

IFRIC 15 - Agreement for the construction of Real Estate

During 2008, The Group had adopted early application of IFRIC 15 - Agreements for the construction of Real

Estate. This change in accounting policy had been accounted for retrospectively as per lAS 8. This had

resulted in decreasing the balance of retained earnings as of December 31, 2007 by KD 15,485,612,

decreasing the non-controlling interests by an amount of KD 926,720, decreasing the properties under

development by KD 14,034,196, decreasing the investment in joint venture by KD 2,378,136 and decreasing

the net profit for the period ended March 31,2008 by KD 686,899.