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AL-MAZAYA HOLDING COMPANY - K.S.C. (PUBLIC)
AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2023
(All amounts are in Kuwaiti Dinars)

• Accounts payable
Accounts payable include trade and other payables. Trade payables are obligations to pay for goods or
services that have been acquired in the ordinary course of business from suppliers. Trade payables are
recognized initially at fair value and subsequently measured at amortized cost using the effective return
method. Accounts payable are classified as current liabilities if payment is due within one year or less
(or in the normal operating cycle of the business if longer). If not, they are presented as non - current
liabilities.

• Borrowings
Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are
subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs)
and the redemption value is recognized in the consolidated statement of profit or loss over the period of
the borrowings using the effective interest method.

Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the
extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred
until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the
facility will be drawn down, the fee is capitalized as a pre-payment for liquidity services and amortized
over the period of the facility to which it relates.

• Islamic bank facilities
Islamic bank facilities represent tawarruq, ijara and musharaka facilities which represent the amounts
due to pay for purchased assets on deferred basis as per the credit facility agreements. Their balances
are reported with full credit balances after deducting finance charges amounts pertaining to future
periods. Those finance charges are amortized on a time apportionment basis using effective cost
method.

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original liability and the recognition of a new liability, and
the difference in the respective carrying amounts is recognized in consolidated statement of profit or loss. If
the modification is not substantial, the difference between of the carrying amount of the liability before the
modification; and the present value of the cash flows after modification should be recognized in profit or loss
as the modification gain or loss within other gains and losses.

d – 3) Offsetting of financial assets and liabilities:
Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement
of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts
and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities
simultaneously.

e) Inventory:
Inventories are valued at the lower of cost or net realizable value after providing allowances for any obsolete or
slow-moving items. Costs comprise direct materials and where applicable, direct labor costs and those overheads
that have been incurred in bringing the inventories to their present location and condition. Cost is determined on a
weighted average basis.

Net realizable value is the estimated selling price in the ordinary course of business less the costs of completion
and selling expenses. Write-down is made for obsolete and slow-moving items based on their expected future use
and net realizable value.

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