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AL MAZAY A HOLDING COMPANY K.S.c. AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2011
MAlAY,'
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3.
BASIS OF PREPRATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
National Labour Support Tax
The Group is legally required to contribute to the National Labour Support Tax ("NLST"). The Group's
contribution to NLST is recognised as an expense in the period during which the Group's contribution is legally
required.
Zakat
Effective 10 December 2007, the Group has provided for Zakat in accordance with the requirements of Law No.
46 of 2006. The Zakat charge calculated in accordance with these requirements is charged to the consolidated
statement of income.
4.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
In
the application of the Group's accounting policies, which are described in note 3, management is required to
make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not
readily apparent from other sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised if the revision affects only that period or in the
period of the revision and future periods if the revision affects both current and future periods.
Critical judgements in applying accounting policies
Classification of investments
Management decides on the acquisition of an investment whether to classify it as available for sale or at fair
value through profit or loss. The Group classifies investments as at fair value through profit or loss if it has
been acquired principally for the purpose of selling it in the near term and its fair value can be reliably
determined. All other investments are classified as available for sale.
Impairment of available for sale investments
The Group follows the guidance of lAS 39 to determine when an available-for-sale equity investment is
impaired. This determination requires significant judgment. In making this judgment, the Group evaluates,
among other factors, a significant or prolonged decline in the fair value below its cost The determination of
what is "significant" or "prolonged" requires significant judgment.
Application of IFRIC 15 - Agreements for the construction of real estate.
The determination, whether the agreements within the scope of lAS 11- Construction Contracts or JAS 18 -
Revenue, require significant judgment.
The key assumptions concerning the future and other key sources of estimation uncertainty at the consolidated
statement of financial position date that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next fmancial year are discussed below.
Fair value of unquoted equity investments
If the market for a financial asset is not active or not available, the Group establishes fair value by using
valuation techniques which 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. This valuation requires the Group to make estimates about expected future cash
flows and discount rates that are subject to uncertainty.
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