Page 60 - Q4-2024-EN

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)

b) Credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge a contractual obligation causing
the other party to incur a financial loss. Financial assets which potentially subject the Group to credit risk consist
principally of cash and cash equivalent and receivables. The Group’s cash is placed with high credit rating financial
institutions. Receivables is presented net of allowance for expected credit losses.

Cash and cash equivalent
The Group’s cash and cash equivalent measured at amortized cost are considered to have a low credit risk and
the loss allowance is based on the 12 months expected loss. The Group's cash and cash equivalent are placed
with high credit rating financial institutions with no recent history of default. Based on management’s assessment,
the expected credit loss impact arising from such financial assets are insignificant to the Group as the risk of default
has not increased significantly since initial recognition.

Accounts receivable
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The
demographics of the Group’s customer base, including the default risk of activities and country, in which customers
operate, has less of an influence on credit risk.

Customer credit risk is managed by each business unit subject to the Group’s established policy, procedures and
control relating to customer credit risk management. Outstanding customer receivables are regularly monitored.

The Group’s maximum exposure arising from default of the counterparty is limited to the carrying amount of cash
and cash equivalents and receivables.

c) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in raising funds to meet commitments associated
with financial instruments. To manage this risk, the Group periodically assesses the financial viability of customers.

The following table presents the Group’s maturity analysis of the financial liabilities:

2023

Less than 1 More than 2
year 1-2 years years Total
Accounts payable and other credit balances 10,358,020 1,233,721 1,776,510 13,368,251
Lease liabilities 2,117,740 2,267,799 26,563,000 30,948,539
Islamic bank facilities 2,713,494 3,108,368 59,710,371 65,532,233
Total 15,189,254 6,609,888 88,049,881 109,849,023

2022

Less than 1 More than 2
year 1-2 years years Total
Accounts payable and other credit balances 11,735,726 1,468,911 1,820,702 15,025,339
Lease liabilities 1,512,273 1,937,760 23,290,278 26,740,311
Islamic bank facilities 5,718,203 3,943,109 86,131,294 95,792,606
Total 18,966,202 7,349,780 111,242,274 137,558,256

d) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in foreign currency exchange rates. The Group incurs foreign currency risk on transactions that are
denominated in a currency other than the Kuwaiti Dinar. The Group may reduce its exposure to fluctuations in
foreign exchange rates through the use of derivative financial instruments.

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