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) 49 The following methods and assumptions were used to estimate the fair values: a) The fair values of the quoted notes and bonds are based on price quotations at the reporting date. b) The fair value of unquoted instruments, loans from banks and other financial liabilities, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. c) The basis of the valuation of investment properties is fair value. The investment properties are revalued annually based on independent accredited valuers having experience in the location and category of investment property being valued. Valuations are based on current prices in an active market for similar properties of the same location and condition, subject to similar leases and takes into consideration occupancy rates and returns on investment and for the fair value details of investment properties are mentioned in Note 9. Movements in level 3 assets and liabilities during the current and previous financial year are set out below: Financial assets (“FVTPL”) Financial assets (“FVTOCI”) Investment properties Total Balance as at January 1, 2019 981,739 714,550 116,406,237 118,102,526 Additions - - 8,459,548 8,459,548 Disposals (158,205) - - (158,205) Effect on acquisition of a subsidiary - - 8,732,519 8,732,519 Transferred to other levels(a) (40,013) - - (40,013) Losses recognised in profit or loss statement (5,668) - (815,304) (820,972) Losses recognised in other comprehensive income statement - (714,550) (1,223,083) (1,937,633) Balance as at 31 December 2019 777,853 - 131,559,917 132,337,770 Additions - - 473,359 473,359 Disposals (298,164) - - (298,164) transferred from investment in associate - 9,735,533 - 9,735,533 Transferred to other levels (b) - - (9,600,087) (9,600,087) Losses recognised in profit or loss statement (107,073) - (2,884,556) (2,991,629) Gain recognised in other comprehensive income statement - 144,717 45,022 189,739 Balance as at 31 December 2020 372,616 9,880,250 119,593,655 129,846,521 a) During the comparative year ended December 31, 2019, certain unquoted financial assets previously measured under level 3 were transferred to level 1 due to the listing of those shares during the year in Boursa Kuwait, which resulted in transferring and measuring those financial assets under level 1 as of December 31, 2019. b) During the year ended December 31, 2020, a subsidiary to the Group had changed the valuation technique for its investment properties measured at fair value of TRL 185,648,200 (equivalent to KD 7,559,131) (2019 – TRL 188,060,000 (equivalent to KD 9,600,087)) from income approach under level 3 to market approach under level 2, as the independent valuator considered the market approach is the appropriate method to reflect the real fair value of the investment properties due to the high fluctuations in properties rental rates and prices as well as the disparity in discount rates as a result of the outbreak of COVID 19 pandemic during the year.