Page 60 - 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)

ii. Loans and borrowings
Borrowings are recognized initially at fair value, net of transaction costs incurred.
Borrowings are subsequently stated at amortized cost; any difference between the
proceeds (net of transaction costs) and the redemption value is recognized in the
statement of profit or loss over the period of the borrowings using the effective
interest method.
Fees paid on the establishment of loan facilities are recognized as transaction costs
of the loan to the extent that it is probable that some or all of the facility will be drawn
down. In this case, the fee is deferred until the draw-down occurs. To the extent there
is no evidence that it is probable that some or all of the facility will be drawn down,
the fee is capitalized as a pre-payment for liquidity services and amortized over the
period of the facility to which it relates.
Murabaha payables are reported with full credit balances after deducting finance
charges pertaining to future periods. Those finance charges are amortized on a time
apportionment basis using effective interest method.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged
or cancelled or expires. When an existing financial liability is replaced by another from
the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as a derecognition
of the original liability and the recognition of a new liability, and the difference in the
respective carrying amounts is recognized in consolidated statement of profit or loss.
If the modification is not substantial, the difference between: (1) the carrying amount
of the liability before the modification; and (2) the present value of the cash flows after
modification should be recognized in profit or loss as the modification gain or loss within
other gains and losses.

C) Offsetting of financial assets and liabilities
Financial assets and financial liabilities are offset and the net amount reported in the
consolidated statement of financial position if, and only if, there is a currently enforceable
legal right to offset the recognized amounts and there is an intention to settle on a net
basis, or to realise the assets and settle the liabilities simultaneously.

e) Inventories
Inventories are valued at the lower of cost and net realizable value after making allowances
for any slow moving obsolete or damaged items. Cost of inventories is based on weighted
average principle, and includes expenditure incurred in bringing the inventories to their
present location and condition such as purchase price, shipping costs and other incidental
expenses.

Net realizable value is based on estimated selling price less any costs of completion and
estimated costs necessary to make sale.

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