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) 42 2019 Revenue from sale of properties held for trading Rental income Total Kuwait - 5,076,602 5,076,602 United Arab Emirates 17,286,243 2,109,628 19,395,871 Kingdom of Saudi Arabia - 804,470 804,470 Oman 881,642 25,403 907,045 Turkey 916,183 289,362 1,205,545 Bahrain - 421,299 421,299 Total 19,084,068 8,726,764 27,810,832 21. Net investment income 2020 2019 Dividend income 275,623 557,220 Unrealized (loss) gain from changes in fair value of financial assets at FVTPL (116,703) 2,466 Realized (loss) gain on sale of financial assets at FVTPL (25,803) 12,975 Portfolios management fees (34,784) (32,122) 98,333 540,539 22. Net other expenses This caption includes allowance for expected credit losses for trade receivable amounting to KD 777,384 (2019 – KD 840,706), and provisions no longer required, credit balances written back and settlement revenue amounting to KD 240,534 (2019 – KD 1,475,524). This caption includes also net current and deferred taxes for the Parent Company’s subsidiaries along with real estate projects and property registration and service fees amounting to KD 32,431 (2019 – KD 805,928). In addition, this caption includes provisions for lawsuits amounting to KD 1,244,433 (2019 –KD 414,105). Those provisions relate to a lawsuit filed during the year by two subsidiaries of the Group before the courts of Dubai in United Arab Emirates (UAE) with total claim 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 against some investors for developing real estate projects in Dubai, UAE 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), in addition to the legal interest to be calculated on the claim at 9% from the date of filing the lawsuit till the full settlement date, as well as the payment of fees, expenses and attorney fees. The claimed balances reported in the Group’s records include an amount of AED 7,352,377 (equivalent to KD 613,468) recognized during the year for extended services to the investors. The Group had recognized a provision during the year amounting to AED 14,914,454 (equivalent to KD 1,244,433) 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 its records. 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. During the year ended December 31,2020, and after filing those legal cases, 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. Those cases are under the hearings in front of the Court of Appeal and no verdict has been issued till the reporting date.