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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)
v) 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 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 eamings and 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.
w) Financial instruments
Financial assets and financial liabilities carried on the consolidated statement of financial position
include cash and cash equivalents, accounts receivable and other debit balances, Murabaha
receivable, investments available for sale, bank overdraft, accounts payable and other credit
balances, term loans and Wakala and Murabaha payables. The accounting policies on recognition
and measurement of these items are disclosed in the respective accounting policies found in this
Note.
Financial instruments are classified as liabilities or equity in accordance with the substance of the
contractual arrangement. Interest, dividends, gains, and losses relating to a financial instrument
classified as a liability are reported as expense or income. Distributions to holders of financial
instruments classified as equity are charged directly to equity. Financial instruments are offset when
the Group has a legally enforceable right to offset and intends to settle either on a net basis or to
realize the asset and settle the liability simultaneously.
x) Revenue recognition
The Group recognizes revenue when the amount of revenue can be reliably measured, it is probable
that future economic benefits will flow to the entity and specific criteria have been met for each of the
Group's activities as described below. The amount of revenue is not considered to be reliably
measurable until all contingencies relating to the sale have been resolved. The Group bases its
estimates on historical results, taking into consideration the type of customer, the type of transaction
and the specifics of each arrangement.
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