Mazaya Holding_FS_E_Q1_2021

AL MAZAYA HOLDING COMPANY K.S.C.P. AND ITS SUBSIDIARIES NOTES TO INTERIM CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED) MARCH 31, 2021 (All amounts are in Kuwaiti Dinars) 8 3. Cash and cash equivalent March 31, 2021 December 31, 2020 (Audited) March 31, 2020 Cash in hand and at banks 4,776,099 5,077,780 9,310,659 Short term bank deposit (a) 2,000,000 2,000,000 5,000,000 Cash in portfolios 48 749 10,428 6,776,147 7,078,529 14,321,087 Less: Restricted bank balances (b) (630,114) (688,792) (2,941,987) Cash and cash equivelant in consolidation statement of cash flow 6,146,033 6,389,737 11,379,100 a) The effective interest rate on short term bank deposit is 0.91% (December 31, 2020 - 2.94% and March 31, 2020 – 2.125%) per annum. This deposit have contractual maturity of 30 days. b) Restricted bank balances represent escrow accounts restricted for receiving and making payments for specific construction activities and as a collateral for same bank facilities of the Group, which may not be available for use within 90 days. 4. Treasury shares March 31, 2021 December 31, 2020 (Audited) March 31, 2020 Number of shares 58,724,740 59,331,584 60,811,242 Percentage of issued shares (%) 8.53 8.62 8.84 Market value (KD) 3,640,934 3,370,034 3,058,805 Cost (KD) 18,626,865 18,819,349 19,288,845 The Parent Company’s management has allotted an amount equal to treasury shares balance from share premium and part of statutory reserve as of March 31, 2021. Such amount will not be available for distribution during treasury shares holding period. 5. Other income (expenses) The compartive financial peroid for the three months ended in March 31,2020 include amounts related to a lawsuit was filed by two subsidiaries of the Group before the courts of Dubai in United Arab Emirates (UAE) against some investors for developing real estate projects in Dubai, UAE where the Group’s has recorded an amount of AED 7,352,377 (equivalent to KD 612,026) as an income during the period for extended services to the investors. The Group had recognized a provision during the period amounting to AED 14,793,394 (equivalent to KD 1,231,430) in order to complete the recognition of full provision for all the balances reported in its records pertaining to that claim for conservatism purposes and not in surrender to the Group’s rights in those balances reported in it`s records. Subsequent, the first-degree court had ruled in favor of the two subsidiaries for their entitlement of a total amount of AED 19,780,852 (equivalent to KD 1,635,959) in addition to the legal interest of 9% from the date of legal claim till full settlement date. The two subsidiaries had appealed against this verdict in front of Court of Appeal as the management believes in its entitlement for the whole amounts included in the original claims submitted during the year by the two subsidiaries. amounting to AED 57,876,880 (equivalent to KD 4,817,781) representing the reported balances in the Group’s records as of May 31, 2020, and recorded againset them a full provision amount, in addition to claiming an estimated additional compensation including opportunity cost, extensive duplicated effort and punitive damages with a total amount of AED 87,977,030 (equivalent to KD 7,323,374). For the additional compensation claims, and since all related claims are subject to the court’s sole discretion and assessment as they are mainly punitive in nature, no amounts were reported or provided for in the Group’s accounting records as pertaining to those additional compensation claims. In addtion to the legal interest of 9% from the date of legal claim till full settlement date. with obliging the defendants to pay fees, expenses and attorney fees.Those cases are under the hearings in front of the Court of Appeal and no verdict has been issued till the interim financial information date.