Mazaya_FS_E Q4. 20

AL-MAZAYA HOLDING COMPANY - K.S.C. (PUBLIC) AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2020 (All amounts are in Kuwaiti Dinars) 38 12. Lease liabilities The movement of the lease liabilities during the year are as follows: 2020 2019 Balance at the beginning of the year 13,949,222 - Effect on acquisition of a subsidiary - 6,117,859 Additions - 7,975,519 Amortization of finance costs related to lease liabilities 657,938 315,844 Payments (1,537,500) (460,000) Balance at the end of the year 13,069,660 13,949,222 Lease liabilities can be presented as follows: Minimum lease payments Present value of minimum lease payments 2020 2019 2020 2019 Leases liabilities: Within one year 1,917,500 1,685,000 1,314,272 1,027,062 Remaining liability till end of lease term 14,008,000 15,778,000 11,755,388 12,922,160 Total lease liabilities 15,925,500 17,463,000 13,069,660 13,949,222 Less: Unamortized future finance charge (2,855,840) (3,513,778) - - Present value of minimum lease payments 13,069,660 13,949,222 13,069,660 13,949,222 The average lease term is 10 years and the average effective borrowing rate is 5% for the year ended December 31, 2020 (2019 – 5%) All leases are on a fixed repayment basis and no arrangements have been entered into for additional contingent rental payments.