Notes to The Consolidated Financial Statement
AL MAZAYA HOLDING COMPANY K.S.C.P. AND ITS SUBSIDIARIES
31 December 2013
Effect on profit (loss)
for the year
2013
KD
2012
KD
UAE Dirhams
177,471
118,016
31. CAPITAL MANAGEMENT
The primary objective of the Group’s capital management is to ensure that it maintains healthy capital ratios in order to
support its business maximise shareholder value and remain within the quantitative loan covenants.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To
maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to
shareholders or issue new shares. No changes were made in the objectives, policies or processes during the year ended 31
December 2013 and 31 December 2012.
The Group monitors capital using a gearing ratio as per the debt covenant for their loans, which is net debt divided by total
capital plus net debt. The Group’s policy is to keep the gearing ratio below 120%. The Group includes within net debt,
interest bearing loans and borrowings, tawarruq, wakala and murabaha payables and other payables, less bank balances
and cash.
2013
KD
49,384,927
(17,445,840)
31,939,087
97,167,338
33%
Debts
Less: cash and cash equivalent
Net debt
Equity
Net debt to equity ratio
2012
KD
49,415,796
(13,391,425)
36,024,371
87,839,928
41%
30.3.3 Foreign currency risk
Currency risk is the risk that the value of the financial instrument on monetary items will fluctuate due to changes in the
foreign exchange rates. The Group incurs foreign currency risk on transactions denominated in a currency other than the
Kuwaiti Dinar. The Group ensures that the net exposure is kept to an acceptable level, by dealing in currencies that do not
fluctuate significantly against the Kuwaiti Dinar.
If the Kuwaiti Dinar had strengthened or weakened against the foreign currencies assuming a change of 5%, this would
have the following impact on the consolidated statement of income:
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