Notes to The Consolidated Financial Statement
AL MAZAYA HOLDING COMPANY K.S.C. AND ITS SUBSIDIARIES
31 December 2012
34,711,975
)15,165,579(
)19,546,396(
-
-
17,373,130
)9,040,096(
-
)8,333,034(
-
52,085,105
)24,205,675(
)19,546,396(
)8,333,034(
-
DTJA
KD
WF
KD
Total
KD
Balance at the beginning of the year 2011
Adjustment of deferred consideration
Decline of fair value
Adjustment by transfer to account receivable
and other debit balance
Balance at the end of the year 2011
(ii) Adjustments recorded in the previous year represent the following:
a) One of the Group’s subsidiaries, Al Mazaya Real Estate Company FZ LLC (“MREC FZ”) on 4 December 2007 signed a
sale and purchase agreement with Limitless Company LLC (Limitless) for purchasing 9 plots in Down Town Jebel Ali, Dubai
(DTJA) for KD 34.712 million of which KD 19.6 million was paid in cash and the remaining consideration of KD 15.166
million was deferred. MREC FZ terminated the agreement and submitted a claim in the Dubai International Arbitration
Tribunal. Accordingly, the Group in the previous year offset the related deferred consideration of KD 15.166 million (see
note 20) against the carrying value of the investment property of KD 34.712 million and the resultant amount of KD 19.6
million was recorded as fair value decline of investment properties.
During the year a final verdict was given by Dubai International Arbitration Tribunal (DIAT) whereby MREC FZ shall only
be entitled to receive AED 1.342 million (KD 0.101 million) from Limitless and that the control over the plots would remain
with Limitless. The management will record the income only on receipt of the amount.
b) In a separate transaction, the Group had entered into a Sale Purchase Agreement (SPA) with an investor to acquire
Waterfront land (WF) in Dubai at a cost of KD 42 million by paying KD 31.5 million in advance. A consideration of KD
10.5 million was deferred and recorded as a payable. A fair value decline of KD 24.7 million was recorded against this
property. Due to delays in development of the project from the master developer, the Group has withdrawn its right to
acquire these properties. Accordingly, the Group in the previous year offset the outstanding deferred consideration payable
to the investor of KD 9 million (see note 20) against the carrying value of the land amounting to KD 17.3 million. The net
amount of KD 8.3 million was transferred to trade and other receivables and an equal amount of allowance for doubtful
debts was recorded.
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