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AL MAZAYA HOLDING COMPANY
K.S.C.
(HOLDING) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2010
(All amounts are in Kuwaiti Dinars)
The Consolidated financial position and the consolidated statement of income as of December 31, 2010
include the financial information for the new subsidiaries, United Circle General Contracting and Buildings -
Abdulla Faisal AI Sultan and Partner - WL.L and Mezzan Combined for General Trading - W.L.L. Company,
while the comparative figures do not include such information. The consolidated accounts are as follow:
Consolidated Statement of Financial Position
Cash and cash equivalents
Amounts
72,227
Consolidated Statement of Income
Other income
General and administrative expenses
22,277
3,518
e) Cash and cash equivalents
Cash and cash equivalents includes cash on hand and deposits held at call with banks and other
short - term highly liquid investments with original maturities of three months or less that are readily
convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
~ Receivables
Receivables are recognized initially at fair value and subsequently measured at amortized cost using
the effective interest method, less provision for impairment. A provision for impairment of trade
receivable is established when there is an objective evidence that the Group will not be able to collect
all amounts due according to the original terms of the receivables. Significant financial difficulties of
the debtor, probability that the debtor will enter bankruptcy or financial reorganization, and default or
delinquency in payments are considered indicators that the trade receivable is impaired. The amount
of the provision is the difference between the asset's carrying amount and the present value of
estimated future cash flows, discounted at the original effective interest rate. The carrying amount of
the asset is reduced through the use of an allowance account, and the amount of the loss is
recognized in the consolidated statement of income. When a trade receivable is uncollectible, it is
written off against the allowance account for trade receivable. Subsequent recoveries of amounts
previously written off are credited in the consolidated statement of income.
g) Murabaha receivable
Murabaha receivable represents a sale of commodity with deferred installments. Murabaha receivable
is stated net of impairment losses or provision for doubtful debts.
h) Properties held for trading
Properties acquired, constructed or in the course of construction for sale are classified as properties
held for trading. Unsold properties are stated at cost or net realizable value which ever is less. Sold
properties in the course of development are stated at cost plus attributable profit or loss less progress
billings. The cost of properties held for trading under development includes the cost of land and other
related expenditure which are capitalized as and when activities that are necessary to get the
properties ready for sale are in progress. Net realizable value represents the estimated selling price
less costs to be incurred in selling the property.
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