Page 57 - JTC-Annual Report-2025-Eng

JTC Logistics Transportation & Stevedoring Company K.S.C.P
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As at December 31, 2025
(All amounts are in Kuwaiti Dinars)

Financial assets held under the model to collect cash flows only are classified as amortized
cost, while those held to collect cash flows and sell are classified as at fair value through
other comprehensive income.

The Group reclassifies when and only when its business model for managing those
assets changes. The reclassification takes place from the start of the first reporting period
following the change. Such changes are expected to be very infrequent.

III. Categories and measurement of financial assets
The Group classifies and measures its financial assets upon initial recognition into the
following categories:
▶ Debt instruments at amortized cost,

▶ Equity instruments at FVOCI, with no recycling of gains or losses to profit or loss on
derecognition.

Debt instruments at amortized cost
A financial asset is measured at amortized cost if it meets both of the following conditions:

▶ The asset is held within a business model whose objective is to hold assets to collect
contractual cash flows; and

▶ The contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest (SPPI) on the principal amount
outstanding.

Debt instruments measured at amortized cost are subsequently measured at amortized
cost using the effective yield method adjusted for impairment losses if any. Interest income,
foreign exchange gains and losses and impairment are recognized in the consolidated
statement of income Gain and losses are recognized in consolidated statement of profit
or loss when the asset is derecognized, modified or impaired.

Amortized cost and effective interest method
The effective interest method is a method of calculating the amortized cost of a debt
instrument and of allocating interest income over the relevant period.
The amortized cost of a financial asset is the amount at which the financial asset is
measured at initial recognition minus the principal repayments, plus the cumulative
amortization using the effective interest method of any difference between that initial
amount and the maturity amount, adjusted for any loss allowance. The gross carrying
amount of a financial asset is the amortized cost of a financial asset before adjusting for
any loss allowance.

Cash and cash equivalents, trade and other receivables are classified as debt instruments
at amortized cost.

i. Cash and cash equivalents
Cash and cash equivalents include cash on hand and at banks, deposits held at call
with banks and other short-term highly liquid investments with original maturities of
three months or less that are readily convertible to a known amount of cash and term

55 JTC LogisTiCs TransporTaTion & sTevedoring Company K.s.C.p.