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ANNUAL REPORT
2016
N
otes To The Consolidated Financial Statements
AL MAZAYA HOLDING K.S.C.P. AND ITS SUBSIDIARIES
As At 31 December 2016
property by property, and based on management’s intention. The initial cost of a property interest held under a
lease and classified as an investment property is determined at the lower of the fair value of the property and
the present value of the minimum lease payments. An equivalent amount is recognised as a liability.
Borrowing costs
Borrowing costs are generally expensed as incurred. Borrowing costs are capitalised if they are directly
attributable to a project, as part of projects under construction, over the period of the construction until the
project concerned is completed and becomes ready for its intended use on the basis of actual borrowings
and actual expenditure incurred on the project. Capitalisation of borrowing costs ceases when substantially
all activities necessary to prepare the project for its intended use are complete. Borrowing costs capitalised
is calculated using the Group’s weighted average cost of borrowings.
Contingencies
Contingent liabilities are not recognised in the consolidated financial statements, but are disclosed unless the
possibility of an outflow of resources embodying economic benefits is remote.
Contingent assets are not recognised in the consolidated financial statements, but are disclosed when an
inflow of economic benefit is probable.
Taxation
Kuwait Foundation for the Advancement of Sciences (KFAS)
The Parent Company calculates the contribution to KFAS at 1% in accordance with the modified calculation
based on the Foundation’s Board of Directors resolution, which states that the income from associates and
subsidiaries which are subjected to KFAS, Board of Directors’ remuneration, transfer to statutory reserve
should be excluded from profit for the year when determining the contribution.
National Labour Support Tax (NLST)
The Parent Company calculates the NLST in accordance with Law No. 19 of 2000 and the Ministry of Finance
Resolutions No. 24 of 2006 at 2.5% of taxable profit for the year. As per law, income from associates and
subsidiaries, cash dividends from listed companies which are subjected to NLST have been deducted from
the profit for the year.
Zakat
Contribution to Zakat is calculated at 1% of the profit of the Parent Company in accordance with the Ministry
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