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AL MAlAYA HOLDING COMPANY K.S.C. (HOLDING) AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2010
(All amounts are in Kuwaiti Dinars)
i) Investments
The Group classifies its investments as investments available for sale. The classification depends on
the purpose for which the investments were acquired and is determined at initial recognition by the
management.
(i) Investments available for sale
Investments available for sale are non-derivative financial assets that are either designated in this
category or not classified in any of the other categories. They are included in non-current assets
unless management intends to dispose of the investment within 12 months from the end of the
reporting period.
Purchases and sales of investments are recognized on trade date - the date on which the Group
commits to purchase or sell the asset. Investments are initially recognized at fair value plus
transaction costs for all financial assets not carried at fair value through income statement.
After initial recognition, investments available for sale are subsequently carried at fair value. The fair
values of quoted investments are based on current bid prices. If the market for an investment is not
active (and for unlisted securities), the Group establishes fair value by using valuation techniques.
These include the use of recent arm's length transactions, reference to other instruments that are
substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the
issuer's specific circumstances.
Unrealized gains and losses arising from changes in the fair value of investments available for sale
are recognized in cumulative changes in fair value in the consolidated statement of comprehensive
income.
Where investments available for sale could not be measured reliably, these are stated at cost less
impairment losses, if any.
When an investment available for sale is disposed off or impaired, any prior fair value earlier reported
in the consolidated statement of comprehensive income is transferred to the consolidated statement
of income.
An investment (in whole or in part) is derecognized either when: the contractual rights to receive the
cash flows from the investment have expired; or the Group has transferred its rights to receive cash
flows from the investment and either (a) has transferred substantially all the risks and rewards of
ownership of the investment, or (b) has neither transferred nor retained substantially all the risks and
rewards of the investment, but has transferred control of the investment. Where the Group has
retained control, it shall continue to recognize the investment to the extent of its continuing
involvement in the investment.
The Group assesses at the end of each reporting year whether there is an objective evidence that a
financial asset or a group of financial assets is impaired. In the case of equity securities classified as
available for sale, a significant or prolonged decline in the fair value of the security below its cost is
considered in determining whether the securities are impaired. If any such evidence exists for
investments available for sale, the cumulative loss - measured as the difference between the
acquisition cost and the current fair value, less any impairment loss on that investment previously
recognized in consolidated statement of income - is removed from the consolidated statement of
comprehensive income and recognized in the consolidated statement of income. Impairment losses
recognized in the consolidated statement of income on available for sale equity instruments are not
reversed through the consolidated statement of income.
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