Annual report eng.2019

N otes To The Consolidated Financial Statements AL MAZAYA HOLDING K.S.C.P. AND ITS SUBSIDIARIES As At 31 December 2019 (All amounts are in Kuwaiti Dinars) OF ACHIEVEMENTS Trade receivables: Trade receivables are non-interest bearing and are generally due within 30 days. The Group applies the IFRS 9 simplified model of recognizing lifetime expected credit losses for all trade receivables as these items do not have a significant financing component. In measuring the expected credit losses, trade receivables have been assessed on a collective basis respectively and grouped based on shared credit risk characteristics and the days past due. The expected loss rates are based on the payment profile for transactions over the past periods as well as the corresponding historical credit losses during that period. The historical rates are adjusted to reflect current and forwarding looking macroeconomic factors affecting the customer’s ability to settle the amount outstanding. However given the short period exposed to credit risk, the impact of these macroeconomic factors has not been considered significant within the reporting period. There has been no change in the estimation techniques or significant assumptions made during the current year. Trade receivables are written off when there is no reasonable expectation of recovery. Failure to make payments within 180 days from the invoice date and failure to engage with the Group on alternative payment arrangement amongst other is considered indicators of no reasonable expectation of recovery and therefore is considered as credit impaired. The following table details the risk profile of trade receivables based on the Group’s provision matrix. a- b- Allowance for expected credit losses: The movement in allowance for credit losses is as follows: Balance at the beginning of the year Charge for the year Allowance for expected credit losses no longer required Foreign currency translation adjustments Balance at the end of the year 10,649,167 840,706 )1,075,524( 61,191 10,475,540 9,039,555 1,587,171 )37,364( 59,805 10,649,167 9,096,995 - )837,806( 71,713 8,330,902 1,552,172 840,706 )237,718( )10,522( 2,144,638 Expected credit loss rate Gross carrying amount Allowances for expected credit loss Expected credit loss rate Gross carrying amount Allowances for expected credit loss Less than 30 days Less than 30 days 31 – 60 days 31 – 60 days December 31, 2019 December 31, 2018 61 – 90 days 61 – 90 days Trade receivables 91- 180 days 91- 180 days Other receivables More than 180 days More than 180 days 2019 Total Total 2018 2.73% 10,339,872 282,279 4.11% 3,059,571 125,749 5.46% 105,154 5,741 8.22% 78,525 6,454 8.20% 657,455 53,911 12.33% 906,684 111,794 16.39% 278,221 45,600 24.66% 365,696 90,180 100.00% 1,757,107 1,757,107 100% 1,217,995 1,217,995 - 13,137,809 2,144,638 - 5,628,471 1,552,172