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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
Effect on profit (loss)
for the year
2015
KD
2014
KD
UAE Dirhams ( 5%)
218,684
275,749
31. CAPITAL MANAGEMENT
The primary objective of the Group’s capital management is to ensure that it maintains healthy capital ratios in order to support its
business to maximise shareholder value and remain within the quantitative covenants of bank facilities.
The Group manages and adjusts its capital structure in light of changes in economic conditions. To maintain or adjust the capital
structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders, issue new shares and obtain
or settle bank facilities. No changes were made in the objectives, policies or processes during the year ended 31 December 2015
and 2014.
The Group monitors capital using a gearing ratio as per the debt covenant for their bank facilities, which is net debt divided by
total equity plus net debt. The Group’s policy is to keep the gearing ratio below 60%. The Group includes within net debt, ijara
payable, tawarruq payable less cash and bank balances. The Group considers equity as shown in the consolidated statement of
financial position.
2015
KD
80,366,446
(1,930,983)
78,435,463
111,454,343
189,889,806
41.31%
52,258,514
(6,170,984)
46,087,530
107,755,450
153,842,980
29.96%
Debts
Less: cash and bank balances
Net debt
Equity
Equity and net debt
Gearing Ratio
2014
KD
30.3.3 Foreign currency risk
Currency risk is the risk that the value of the financial instrument on monetary items will fluctuate due to changes in the foreign
exchange rates. The Group incurs foreign currency risk on transactions denominated in a currency other than the Kuwaiti Dinar.
The Group ensures that the net exposure is kept to an acceptable level, by dealing in currencies that do not fluctuate significantly
against the Kuwaiti Dinar.
If the Kuwaiti Dinar had strengthened or weakened against the foreign currencies assuming a change of 5%, this would have the
following impact on the consolidated statement of income:
90
±