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ANNUAL REPORT
2015
Notes to The Consolidated Financial Statement
AL MAZAYA HOLDING COMPANY K.S.C.P. AND ITS SUBSIDIARIES
31 December 2015
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, 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 of Finance resolution
No. 58 / 2007.
Segment information
A segment is a distinguishable component of the Group that engages in business activities from which it earns revenues and incurs
costs. The operating segments are used by the management of the Group to allocate resources and assess performance and the
reporting is consistent with the internal reports provided to the chief operation decision maker. Operating segments exhibiting
similar economic characteristics, product and services, class of customers where appropriate are aggregated and reported as
reportable segments.
Foreign currency translation
Each entity in the Group determines its own functional currency and items included in the consolidated financial statements of
each entity are measured using that functional currency.
Transactions and balances
Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency rates prevailing
at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional
currency spot rate of exchange ruling at the reporting date. All differences are taken to the consolidated statement of income. Tax
charges and credits attributable to exchange differences on those monetary items are also recorded in consolidated statement of
income.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as
at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value is determined. The gain or loss arising on retranslation of non-monetary items is
treated in line with the recognition of gain or loss on change in fair value of the item (i.e., translation differences on items whose
fair value gain or loss is recognised in other comprehensive income or profit or loss is also recognised in other comprehensive
income or profit or loss, respectively).
Group companies
The assets and liabilities of foreign operations are translated into Kuwaiti Dinars at the rate of exchange prevailing at the reporting
date and their statement of incomes are translated at average exchange rates during the period where such averages are reasonable
approximation of actual rates. The exchange differences arising on the translation are recognised in other comprehensive income.
On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is
recognised in the consolidated statement of income.
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