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 125 (All amounts are in Kuwaiti Dinars) ANNUAL REPORT 2019 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 at banks 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 at banks, term deposits and debt instruments The Group’s cash at banks, term deposits 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 term deposits 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. The Group’s maximum exposure arising from default of the counter-party is limited to the carrying amount of cash at banks, term deposits and receivables. 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. Maturity Table for financial liabilities: 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. 2019 2018 b) c) d) Less than 1 year Less than 1 year 1- 2 years 1- 2 years More than 2 years More than 2 years Total Total Accounts payable Lease liabilities Islamic bank facilities Term loans Total Accounts payable Islamic bank facilities Term loans Total Capital commitments 8,945,123 1,027,062 5,314,744 1,960,726 17,247,655 12,377,570 13,230,013 1,338,289 26,945,872 530,047 5,160,374 1,166,773 19,049,121 5,404,019 30,780,287 4,594,917 15,841,662 765,785 21,202,364 6,268,292 1,666,658 11,755,387 72,819,126 - 86,241,171 1,495,906 62,523,426 6,796,937 70,816,269 - 15,772,155 13,949,222 97,182,991 7,364,745 134,269,113 18,468,393 91,595,101 8,901,011 118,964,505 6,798,339