Download 2015 Annual Report - English

His HighnessSheikh Tamim Bin Hamad Bin Khalifa Al-Thani

Emir of the State of Qatar

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Aamal Company Q.S.C. • Annual Report 2015 • aamal.com.qa

CONTENT7 About Aamal Company Q.S.C.

8 Financial Highlights

10 Investment Rationale

12 Chairman’s Report

14 Vice Chairman’s Report

16 Managing Director’s Report

18 Corporate Governance

20 Board of Directors

22 Executive Management

23 General Managers

24 Organisational Chart

25 Functional Chart

26 Corporate Social Responsibility

29 Operational Review

48 Financial Statements

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“Generating revenues of QAR 2,882m (US$ 790m) in 2015, Aamal Company is one of the largest, most

diversi�ed and fastest-growing companies in Qatar of-fering investors a high quality and balanced exposure to

the remarkable Qatar growth story”.

Aamal Company Q.S.C.

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• Incorporated in 2001 in Qatar and listed on the Qatar Stock Exchange in 2007

• Geographical focus on Qatar at present with intentions to expand further in the Gulf region

• Operations across 24 business units with market leading positions in key sectors including: industrial manufacturing, retail, property, trading in pharmaceuticals and medical equipment and managed services

• Strategy focused on three pillars for sustained, pro�table growth: i) Increasing focus on in-dustrial manufacturing and related high growth sectors ii) Continued growth, diversi�cation and innovation across other existing businesses to enhance market position and optimise performance iii) Continued application of clear and disciplined operational and �nancial principles underlying our strategic growth initiatives

• Uniquely positioned to bene�t from increased private and public sector demand, particularly for infrastructure development, as Qatar is transformed into an advanced and self-sustaining economy. The award of the 2022 FIFA World Cup to Qatar and the National Vision 2030 has accelerated capital investment as infrastructure projects are commissioned and new projects came on stream

• With a current market capitalisation of QAR7.9bn* (US$2.1bn), Aamal is one of the largest di-versi�ed companies quoted on the Qatar Stock Exchange and is a constituent member of the QE Index which is a measure of the 20 largest and most liquid stocks listed on the Exchange

• Al Faisal Holding Company and Sheikh Faisal Bin Qassim Al Thani are the major shareholders

*As at 10th of April 2016

About Aamal Company Q.S.C.

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Financial Highlights1

QARm FY 2015 FY 2014 Change%

Revenue 2,882.0 2,139.1 34.7%

Gross Pro�t 642.1 506.0 26.9%

Gross Pro�t Margin % 22.3% 23.7% (1.4 ppts)

Net Pro�t Before Value Gains on Investment Properties 521.3 348.5 49.6%

Net Underlying Pro�t Margin Before Fair Value Gain2 % 16.6% 15.4% +1.2 ppts

Fair Value Gains on Investment Properties 135.4 251.7 (46.2%)

Net Pro�t 656.7 600.2 9.4%

EPS3 0.95 0.92 4.1%

1. There may be slight calculation discrepancies due to rounding2. Excluding share of pro�t from equity accounted for investments in associates and joint ventures3. In March 2015, Aamal issued and capitalised bonus shares so FY 2014 EPS has been adjusted accordingly (Company share capital increased

to QAR 6.3bn from QAR 6.0bn)

2015: Revenue and Net Pro�t breakdown by division (QARm)

Division Revenue1 Net Pro�t before fair value gains on investment properties2

Industrial Manufacturing 1,752.2 126.4

Trading and Distribution 779.4 147.2

Property 325.7 268.7

Managed Services 68.5 5.5

Total 2,925.8 547.8

1. Revenue is shown before deduction of inter divisional revenue2. Net Pro�t before fair value gains on investment properties is shown before deduction of Head O�ce costs

Before deduction of inter divisional revenue*

Before fair value gains on investment properties and deduction*of Head Office Costs


9Revenue - 2015*

Underlying Net Pro�t - 2015*

Managed Services

Managed Services

Industrial Manufacturing

Industrial Manufacturing

Trading and Distribution

Trading and Distribution

Property

Property

* Before deduction of inter divisional revenue

* Before fair value gains on investment properties and deduction of Head O�ce Costs

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Investment Rationale


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1) A powerful, cohesive growth platform• One of the fastest growing diversi�ed companies, o�ering high quality exposure to the Qatar growth

story• Diversi�ed for balanced exposure across the Qatari economy • Strong market positions in key sectors• Superior combination of high quality asset base, strong operating pro�tability and earnings visibility

(delivering a compound annual growth rate in net pro�t excluding fair value gains on investment properties in excess of 20% from 2006-2015, and generating revenues of QAR 2,882m (US$ 790m) in 2015)

2) Balance sheet strength – strong backing of major shareholders• Strong asset backing• Readily available access to debt capital markets, which in addition to strong cash �ow generation,

provides strong liquidity for future growth• Low gearing• Al Faisal Holding Company and Sheikh Faisal Bin Qassim Al Thani are the major shareholders

3) Experienced, proven senior management team• Strength in strategic asset allocation, corporate governance and risk control • Proven track record of historical pro�t growth and value creation driven by clear focus on returns on

capital and capital discipline• Highly e�ective corporate decision-making with short lines of communication with operational

management

4) Strength in depth • Development of shared services policy, allowing divisional management to focus on core business• Each subsidiary managed as an individual entity, optimising management’s operational focus and

transparency• Talented and motivated managers with signi�cant experience and customer relationships in their

respective areas • Clear segregation between management and ownership, reinforcing best practice corporate

governance guidelines


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On behalf of the Board of Directors, I am pleased to present the Annual Report of Aamal Company QSC for the year ended 31 December 2015.

Aamal has delivered an exceptional performance in 2015. Rev-enue has grown by almost 35% which, when combined with an expansion in the underlying margin, has led to an almost 50% rise in net pro�t, excluding fair value gains on investment properties.

Beyond what is without doubt an excellent set of numbers, is a clear strategy that has allowed us to achieve sustained growth by optimising existing business operations and create new revenue streams. These results demonstrate clearly the resil-ience of our business model - diversi�ed not just to minimise risk but also positioned to take advantage of structural growth opportunities. This bodes very well for the Company’s future prosperity.

Financial Highlights• Group revenue up 34.7% to QAR 2,882.0m (2014: QAR

2,139.1m)• Gross pro�t up 26.9% to QAR 642.1m (2014: QAR 506.0m)• Net pro�t before fair value gains on investment properties

(“underlying pro�t”) increased 49.6% to QAR 521.3m (2014: QAR 348.5m)

• Fair value gains on investment properties of QAR 135.4m (2014: QAR 251.7m)

• Total net pro�t1 increased 9.4% to QAR 656.7m (2014: QAR 600.2m)

• Reported earnings per share increased 4.1% to QAR 0.95 (2014: QAR 0.922)

• Gross capital expenditure rose by 22.1% to QAR 113.4m (2014: QAR 92.9m), re�ecting the purchase of a sea-faring bulk carri-er for a new Aamal subsidiary and commencement of Phase 2 of the redevelopment of the City Center Doha shopping mall

• Financial gearing3 reduced to 3.8% (31 December 2014: 4.5%)

Chairman’s Report

1 After fair value gains on investment properties but before the deduction of non-controlling interests2 In March 2015, Aamal issued and capitalised bonus shares so FY 2014 EPS has been adjusted accordingly (Company share capital increased to QAR 6.3bn from QAR 6.0bn)3 Net debt to net debt plus equity


13REVENUE(nb. there may be slight di�erences due to rounding)

QAR m 2015 2014 Change %

Industrial Manufacturing 1,752.2 1,134.2 54.5%

Trading and Distribution 779.4 728.8 6.9%

Property 325.7 288.8 12.8%

Managed Services 68.5 64.2 6.7%

less: inter-divisional revenue (43.8) (76.8) (42.9)%

TOTAL 2,882.0 2,139.1 34.7%

NET PROFITQAR m 2015 2014 Change %

Industrial Manufacturing 126.4 51.7 144.5%

Trading and Distribution 147.2 114.9 28.1%

Property1 268.7 223.3 20.3%

Fair value gains on investment properties 135.4 251.7 (46.2)%

Managed Services 5.5 8.3 (33.7)%

less: Head O�ce costs (26.5) (49.7) 46.7%

TOTAL 656.7 600.2 9.4%

1 before fair value gains on investment properties

Aamal’s diversi�ed business model is established around four main sectors:1. Industrial Manufacturing2. Trading and Distribution3. Property4. Managed Services

Aamal holds leading market positions in all these sectors, which along with exposure to the wider Qatari economy provided diversi�cation, gives us the �exibility to respond quickly to evolving market needs and remain at the forefront of Qatar’s con-tinued development.

Our recent decision to expand into the maritime transportation sector through the establishment of a new subsidiary, Aamal for Maritime Transportation Services, is an excellent example of how Aamal continues to look for and create new revenue streams. It is this progressive approach to growth, along with improving the performance of our existing businesses (for example the commencement of the second redevelopment phase of City Center Doha shopping mall), that helps to form the Company’s DNA and which underpins our strong momentum.

Senior management at Aamal are continually assessing and evaluating potential new investment opportunities that will create shareholder value, and it is only after rigorous analysis that a green light decision will be taken. This includes feasibility studies that are currently being conducted for a number of investment projects, whose outcomes will be announced only in the event of any decision to proceed. Accordingly, the Board of Directors has recommended that the net pro�ts generated for the year 2015 be retained in order to provide su�cient liquidity and reduce leverage.

Aamal continues to comply with the highest transparency and disclosure guidelines, in accordance with the requirements of the regulatory and supervisory bodies, and adhering to best corporate governance and management practices. As part of best practice, we conduct periodic reviews of our policies and procedures; and accordingly, submit proposed changes to the Articles of Association of the Company to be discussed at the Extraordinary General Assembly Meeting.

Looking ahead, Qatar provides an investment environment that is becoming increasingly unique in the region, o�ering an at-tractive combination of political and social stability, sustained high levels of government infrastructure, a growing population and rising levels of urbanisation. These factors are presenting signi�cant structural opportunities that Aamal is very well posi-tioned to take advantage of, and which will help to serve the future growth and development of the Company.

Finally, I would like to extend my sincere thanks to His Highness Sheikh Tamim bin Hamad Al Thani, Emir of the State of Qatar, may God protect him, and the government of the State of Qatar for their continued support and encouragement of the private sector and their belief in the vital role it plays in achieving a strong and balanced economy.

We would also like to extend our thanks and appreciation to our valued shareholders and partners for their trust and support in us as well as to our employees for their e�orts. We ask God Almighty that He gives us the ability to continue to work in the best interests of us all.

Faisal Bin Qassim Al ThaniChairman

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In 2015, Aamal Company achieved excellent �nancial results across the organisation. Our in-novative approach to business, in terms of �rst mover advantage, combined with a strategy of diversi�cation has helped the Company to achieve sustainable growth and maintain its lead-ing market positions.

Our utmost priority is �rmly focused on value creation for our shareholders. Looking beyond the excellent set of results, driven by a combination of revenue growth and margin expansion, I am pleased to see the increasing contribution of the Industrial Manufacturing division which now accounts for a 59% share of total revenue and 23% of net pro�ts (compared to 51% and 13% respectively in 2014). This is in line with our strategy, to focus primarily on industrial man-ufacturing and related high growth sectors in order to capitalise on the signi�cant demand that is arising from the wider industrialisation of the Qatari economy.

Aamal has continued to grow and indeed prosper in line with its growth strategy. We occupy a number of market leading positions in a range of sectors across Qatar’s economy that are in various stages of structural, rather than cyclical, growth; furthermore, we are very well capital-ised and have the �nancial strength to continue to pursue suitable opportunities as and when they arise. Recent commencement of Phase 2 of the redevelopment of City Center Doha to consolidate its status as Doha’s premier shopping mall is prime evidence of this.

Vice Chairman’s Report


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Although there is clearly a strong emphasis on growth, this most certainly is not at the expense of our existing operations. We continually focus on their operational excellence by seeking additional e�ciencies, including streamlining costs and investing in produc-tivity, in order to maintain our industry leading cost positions and margins, whilst max-imising our cash �ows.

As Qatar moves towards achieving a knowledge-based economy under the wise leader-ship of H.H. the Emir, Sheikh Tamim Bin Hamad Al Thani, may God bless and protect him, the country enjoys a strong competitive advantage in the region. With the highest GDP per capita in the world, the lowest tax pro�le worldwide, a resilient economy and a suc-cessful on-going diversi�cation strategy, Qatar is steadily consolidating its position as the most competitive economy in the region and we are very fortunate to be operating in this market. We will continue to seek to take advantage of the growth opportunities enabled by these factors and help develop our beloved country.

Although the Aamal story is underpinned by the Qatar National Vision 2030, this is sup-plemented by the dedication and vision of the Company’s Board of Directors, its execu-tive leadership and its employees. I would like to extend my gratitude and appreciation for their e�orts to strive continually for the best results possible.

Mohamed Bin Faisal Al ThaniVice Chairman

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Managing Director’s Report

Since the foundation of Aamal Company and its listing on the Qatar Stock Exchange in 2007, the story has been one of steady evolution and progress. 2015 has seen this momentum being sustained, with a signi�cant rise in underlying pro�ts. What is extremely pleasing and heartening is that this has been achieved through a very healthy combination of strong revenue growth (of almost 35%) and margin expansion, matched by an equally impressive cash �ow. Furthermore, Aamal is very lowly geared �nancially, at just 3.8%, which positions the business to grow further in line with its diversi�ed strategy, through both organic and acquisition means, should suitable targets become available.

Our plan is to deliver attractive, balanced and sustainable returns over the medium-to-long term, and we have every reason to believe this is achievable. Possessing a strong balance sheet, a high degree of operational �exibility and occupying leading market positions across a range of high quality areas, it is our aim to optimise performance and deliver superior returns, while ensuring that such growth is sustainable for the medium to long term which will be to the bene�t of all our stakeholders.

To highlight a number of examples, in 2015:

• Began Phase 2 of the redevelopment of the City Center shopping mall, which will not only in-crease the overall retail capacity available to let but also enhance overall operational e�ciency levels once completed;


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• Capitalised on our long standing relationship with German retail mall and shopping centre operator ECE Projektmanagement, establishing Aamal-ECE to meet the growing demand for comprehensive property management of shopping centres both in Qatar and potentially across the wider MENA region;

• Established a new subsidiary (“Aamal Maritime Transportation Services”) to take ownership of sea-faring vessels, initially to transport aggregates and other basic industrial raw materials but also potentially non-industrial commodities too, such as grains. The operational management of AMTS’s vessels is undertaken by Peter Döhle Group, one of the world’s leading providers of international shipping services, under a �xed term rolling service agreement. This subsidiary currently owns two vessels with capacity over 57,000 tonnes each;

• Increased production capacity at Doha Cables (from 40,000 to 52,000 tonnes per annum) and commenced production of high voltage cables in response to growing market demands trig-gered by extensive infrastructure development projects; and

• Initiated commercial activity at the Advanced Pipes and Casts Company which supplies its products to multiple infrastructure projects.

Aamal’s established growth track record is framed by its ability to identify opportunities ahead of others and then manoeuvring swiftly to exploit them whilst maintaining a strong commit-ment to �nancial and operational progress and supported by a clear corporate vision and strong management team who steer the Company towards achieving its set goals. Aamal is in a strong position to seek new opportunities that are in line with its growth strategy, whilst setting ambi-tious targets to improve overall e�ciency levels and consolidate its market leading positions in the sectors in which it operates.

Looking ahead, we are committed to creating value for all our stakeholders through advancing our proven diversi�cation strategy that has a primary focus on industrial manufacturing, and which positions us to operate pro�tably and sustainably. Currently we have several projects un-der evaluation which will be announced if we decided to proceed.

Finally, I want to thank all our employees and our partners for the vital role they play in ful�lling the mission of Aamal for the bene�t of the organization, its shareholders, and the Country under the wise leadership of HH the Emir, Sheikh Tamim Bin Hamad Al Thani, may God protect him.

Tarek Mahmoud El SayedManaging Director

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Corporate Governance


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“Aamal’s Board and Management are committed to meeting the expectations of stakeholders in practicing sound corporate governance. Aamal Company views corporate governance as an important factor in deliv-ering success.”

Board committeesThe Board of Directors has formed �ve committees: 1) Audit Committee; 2) Nomination Committee; 3) Corpo-rate Governance Committee; 4) Compensation Committee; and 5) Executive Committee.

The dedicated committees meet regularly to assess operational e�ectiveness and ensure that the Company is performing in line with the set objectives.

Segregation of responsibilityIn accordance with the highest standards of good Corporate Governance, it is the Board’s decision to segre-gate the executive management duties from the Board.

The executives operate within a well-de�ned rule authorisation matrix and have various quantitative and qualitative targets set for them.

The executive management acts upon authorities approved by the Board of Directors. The Company policies and procedures are reviewed and updated regularly.

Relations with shareholdersAamal Company is committed to maintaining an active and open dialogue with its shareholders through a planned programme of investor relations activities centred on the �nancial reporting calendar. Our website has a dedicated Investor Relations section to provide further information for all investors or potential inves-tors while our Investor Relations team provides a channel for any other queries to be answered.

Support systemsThe Company uses the Oracle system as the primary Group IT System.

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BOARD OF DIRECTORS

Sheikh Faisal Bin Qassim Al ThaniChairman

Sheikh Abdullah Al ThaniBoard Member

Mr. Tarek M. El SayedManaging Director


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Mr. Bader A. Al FehaniBoard Member

Sheikh Mohamed Bin Faisal Al ThaniVice Chairman

Sheikh Turki Bin Faisal Al ThaniBoard Member

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EXECUTIVE MANAGEMENT

Tarek M. El SayedManaging Director

Mohammad RamahiChief Financial Officer

Maha Jadallah HarperChief Legal Advisor


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GENERAL MANAGERS

Parveez AslamAamal Readymix / Aamal Cement IndustriesGulf Rocks / Aamal Maritime Transportation Services

Sherif ShehataAamal Medical

Ayman MorrarAamal Travel and Tourism

Ahmed El SewedyEl Sewedy Cables Qatar, Doha Cables

Hesham KaoudGulf Rocks

Keith SmithAamal Cement Industries

Osama Al HajjAamal Real Estate

Amr GoharECCO Gulf

Jorg HarengerdCity Center - Doha

Samy HannaEbn Sina Medical

Walid HarounAamal Trading and Distribution

Krzystof PoznanksiAamal Services

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Corporate GovernanceCommittee

Chairman

Managing Director

Board of Directors

CompensationCommittee

Executive Committee

Audit Committee

NominationCommittee

Chief OperatingOfficer

Chief BusinessDevelopment Officer

Business DevelopmentDepartment

Aamal BranchesGeneral Managers

Human CapitalDepartment

CorporateCommunications

ProcurementDepartment

Legal Department

Chief Financial Officer

Finance DepartmentHead Office, Branches

and Subsidiaries

Treasury Department

Subsidiaries Operations

Chief Legal Adviser

AdministrationDepartment

ORGANISATIONAL CHART


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Aamal Readymix

Advanced Pipesand Casts Company

W.L.L.

Senyar IndustriesQatar Holding

W.L.L.

Doha CablesW.L.L.

Elsewedy CablesQatar W.L.L.

Ci-San TradingW.L.L.

Gulf Rocks

Aamal CementIndustries W.L.L.

INDUSTRIAL MANUFACTURING

TRADING AND DISTRIBUTION

Aamal Tradingand Distribution

Aamal Medical

Ebn SinaMedical

Ebn Sina Health CareSolutions

Foot Care Centre

Al Farazdaq CompanyW.L.L.

Aamal OpticalSupplies W.L.L.

PROPERTY

City Center Doha

Aamal Real Estate

Aamal - ECE W.L.L.

MANAGED SERVICES

Aamal Travel and Tourism

Aamal Services

ECCO Gulf W.L.L.

Johnson ControlsQatar W.L.L.


Innovative LightingW.L.L.

Gulf RocksW.L.L.

Aamal Maritimefor Transportation

Services W.L.L.

FUNCTIONAL CHART

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Corporate Social Responsibility (CSR)


27At a Group level, Aamal Company decided to continue its partnership with The Qatar Football Association for the fourth consecutive year as part of its commitment to play a proactive and responsible role in promoting sport which is one ofthe key elements of Qatar’s National Vision 2030.

Key CSR activities by division:

Industrial Manufacturing Division

Doha Cables W.L.L.• Increased number of students attending the summer internship programme where aspiring engineers can attend full training

programmes to help them prepare for a career in electrical engineering• Doha Cables has sponsored many sporting events in line with Qatar’s vision of promoting sports and healthy living

Aamal Readymix• Installed recycling plant at Lusail in order to recycle all unused and scrap quantities of readymix concrete, thereby helping to

minimise waste. A new recycling plant at the industrial area will be installed soon • Batching plants at industrial area and Lusail were certi�ed by NRCMA (National Readymix Concrete Association) for its com-

pliance with the international standards of Readymix concrete production and quality control• Renewal of its Green Building certi�cation, reiterating its commitment credentials towards the study and achievement of

reduced carbon footprints in the ready mix industry• Aamal Readymix continued its support for Hamad Medical Corporation and was honoured for its participation in a recent

blood donation campaign• Renewal of IMS standards TUV ISO 9001:2008, ISO 14001:2004 and BS OHSAS 18001:2007

Aamal Cement Industries W.L.L. • Continued to focus on in-house recycling, and dust suppression to improve the environmental impacts on site• Joined the Green Building Council, adding support to the green building lobby in Qatar that is leading the drive for greater

environmental controls

Advanced Pipes and Casts Company W.L.L.• In process of developing an internship programme to host students from the local schools and universities and o�ering

vocational training

Trading and Distribution Division

Ebn Sina Medical• Continued focus on education through the adoption of two programmes:

a) Support of pharmacy students at the University of Qatar and the College of the North Atlantic, through the provision of collaborative training work experience opportunities within the Ebn Sina pharmacy chainb) Support of the scholarship programme for the Bachelor’s, Master’s and PhD Pharmacy students at Qatar University

Aamal Medical• Supplied Ebola infectious disease kits and isopods and certi�ed training done to HMC Ambulance sta� Property Division

City Center Doha• Continued to support various awareness campaigns in collaboration with the Government and other non-pro�t organisations

such as Qatar Cancer Society and Ministry of Environment

Aamal Real Estate• Continued cooperation with Hamad Medical Cooperation with regards a blood donation event at Souq Al Harraj

Aamal will continue to build upon its core values of responsibility and sustainability implementing strategies that address environmental issues, empower people and provide training and safety awareness programmes to all its employees.

Operational Review

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QAR m 2015 2014 Change %Revenue 1,752.2 1,134.2 54.4%

Net pro�t: fully consolidated activities 84.0 33.6 150.0%

Net underlying pro�t margin % 4.8% 3.0% +1.8 ppts

Net pro�t: share of equity accounted for investee net pro�ts

42.2 18.1 134.2%

Total net pro�t 126.4 51.7 144.5 %

For the year ended 31 December 2015, net pro�t for the Industrial Manufacturing Division rose by 144.5% to QAR 126.4 million, driven by signi�cant revenue growth of over 50% and underlying margin expansion to 4.8%, previously 3%.

The stand-out performer over the year was Senyar Industries, Doha Cables in particular, winning a number of high pro�le and pro�table contracts as infrastructure project build in Qatar continued apace.

Strong performances were also put in by Aamal Readymix and Ci-San, both also bene�ciaries of this con-tinuing investment in infrastructure. Aamal Readymix, focusing on the supply of high grade concrete, far exceeded its production targets.

Ci-San W.L.L. was bolstered further by the establishment in September 2015 of a new subsidiary (“Aamal Maritime for Transportation Services”, “AMTS”) within Gulf Rocks Company. AMTS was set up to ship consign-ments of aggregates from the UAE to Qatar, thereby helping to ensure security of supply, enhance overall productivity, and contribute to the continued growth of Gulf Rocks. AMTS currently owns two sea-faring vessels (Um El Hanaya and Al Rayan).

Aamal Industrial Manufacturing operations currently include:a. Senyar Industries Qatar Holding: production and distribution of electric cables, equipment and tools, as well as the

distribution of electro-mechanical equipmentb. Aamal Readymix: production of high quality ready-mix concretec. Aamal Cement Industries: production of interlocking paving stones, concrete blocks and tilesd. Ci-San Trading: importation and supply of high quality gabbro aggregates through Gulf Rocks; and gabbro shipping

through Aamal Maritime Transportation Services e. Innovative Lighting Company: trading and supplying of LED and other lighting products f. Advanced Pipes and Casts Company: manufacturer of concrete pipes

Industrial Manufacturing Division


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A 50:50 joint venture between Aamal and El Sewedy Electric Company, an Egyptian company listed on the Egyptian Exchange and producer of integrated electrical cables and electrical products (such as transformers, tools and energy and water measurement and management). Senyar’s operations include:

Doha Cables W.L.L.The �rst and largest cables manufacturing facility in Qatar, Doha Cables com-menced operations in May 2010 specialising in the manufacturing of power cables, special cables, winding wires and cables accessories. Doha Cables is 85% interest owned by Senyar (El Sewedy Cables Qatar (of which Senyar owns 55%) owns a 12.5% interest, with an una�liated third party the remaining 2.5%). E�ective own-ership by Aamal in Doha Cables is thus 45.9%.

In 2015, Doha Cables increased annual factory capacity from 40,000 tonnes of cop-per to 52,000 tonnes.

With regards to quality and safety control, Doha Cables obtained the following ap-provals and certi�cations during the year:

• Civil Defence certi�cation for Fire Resistant Cables in addition to LPCB certi�ca-tion

• BASEC Product certi�cation requirements • 132kV approval by KAHRAMAA after conducting the loop type test at KEMA lab-

oratories in the Netherlands

Senyar Industries Qatar Holding W.L.L.

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El Sewedy Cables Qatar commenced operations in 2006, specialising in the dis-tribution of electro-mechanical equipment and cables for Doha Cables and third party manufacturers. A 49% stake (with 55% share of pro�ts/losses) was acquired by Senyar from El Sewedy Electric Company in January 2010 with una�liated third parties owning the remaining 51%. E�ective ownership by Aamal in El Sewedy Cables Qatar is 27.5% and is equity accounted for as an associate.

El Sewedy Cables Qatar


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Aamal Readymix

Aamal Cement Industries W.L.L. (ACI)

An entity 100% owned by Aamal. It commenced operations in 1994 and is one of the largest producers of quality ready-mix concrete in Qatar with an annual pro-duction capacity of 600,000 cubic metres.

In 2015, Aamal Readymix performed very well. The key strategic aim for the year was to supply high grade concrete at pro�table margins and this was achieved, exceeding its production and pro�t targets. New products were introduced and supplied to clients to ful�l their requirements such as mix designs self-compacting concrete and shotcrete. Aamal Readymix was honoured to receive the “GCC 2015 Annual Business Excellence Award” as a best supplier from one of the leading proj-ects in Qatar in recognition of exceptional service and quality.

Batching plants at industrial area and Lusail were completely overhauled to boost the production speed and quality. Further, they were certi�ed by NRCMA for their compliance with the international standards of Readymix concrete production and quality control.

In 2016, Aamal Readymix aims to expand further its �eet of plants so that it is better positioned to win major projects and increase its market share.

Aamal Company owns 99%. It commenced production of decorative interlocking paving stones and concrete blocks in 2010 with an annual production capacity of approximately 25 million blocks or two million square metres of paving stones. The plant has one of the largest block and pavement making machines in Qatar.

Aamal Cement Industries W.L.L. “ACI”, had a successful year with regards to new products, launching �ve new curb stone products, and two new paving products during 2015; ACI now has 130 products in total, di�erentiated by shape, size, di-mension and colour. In 2016, ACI plan to install a second hydraulic wet press ma-chine and separate batching plant to streamline the operations further and expand its product range for the growing infrastructure build market, as well as installing extra capacity for paving products on the existing plant.

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Aamal has a 50% interest Ci-San Trading (the other 50% is held by Masraf Al Rayan). A partnership agreement between Aamal Company and Masraf Al Rayan was signed in 2008 creating Ci-San Trading Company. The Company is set-up to eval-uate investments in various sectors such as industrial, real estate, trading both in local and international markets. Ci-San’s operations include:

E�ective ownership by Aamal is 74.5%; in 2012, Ci-San Trading purchased 51%, with Aamal directly acquiring the remaining 49%. Gulf Rocks itself was established in 2000 by Al Faisal Holding, and is a leading importer and provider of high quality gabbro aggregates, which is widely used in concrete products.

Ci-San Trading W.L.L.

Gulf Rocks W.L.L.


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Aamal Maritime for Transportation Services W.L.L. (AMTS)

Innovative Lighting W.L.L.

Aamal holds 1% of the shares directly, with the remaining 99% held by Gulf Rocks. Aamal has an overall e�ective interest of 74.75% in Aamal Maritime Transportation Services (AMTS). AMTS vessels transport aggregates from Al Fujairah in the UAE to Mesaieed Industrial City in Qatar. AMTS ensures security of supply for Aamal subsidiary Gulf Rocks, and also makes capacity available to third party operators to optimise the vessels’ utilisation rates and pro�tability. The vessels are capable of shipping non-industrial commodities such as grains as well as aggregates and sim-ilar industrial raw materials. Commercial operations have begun with two vessels, bulk carriers with capacity of almost 57000 tonnes each.

Aamal owns 70% of Innovative Lighting ‘QLEDs’. Established in 2012 as a joint ven-ture with C&C Lightway of South Korea, Innovative Lighting currently trades in and distributes light emitting diodes (“LEDs”) and other lighting products (indoor, out-door and façade) for the Qatari market and other GCC countries. This JV is currently under re-evaluation.

36


Advanced Pipes & Casts Company W.L.L. (APC)

Aamal owns 50% of Advanced Pipes and Casts Company (APC). Established in July 2010 as a joint venture between the Company and a Saudi Arabian subsidiary of the Lokma Group, a leading pipe manufacturer in the Middle East.

Advance Pipes and Casts Company started commercial production at the end of 2014, with extensive production capacity that is largely automated and has the �exibility to respond swiftly to changes in end-market demand. APC is one of the manufacturer of precast box culvert and manholes in Qatar, a technology that saves customers signi�cant amounts of money, time and labour at superior levels of product quality.

APC will seek to grow its market share 2016 and introduce new products.


37

QAR m 2015 2014 Change %Revenue 779.4 728.8 6.9%

Net Pro�t 147.2 114.9 28.1%

Net Pro�t Margin 18.9% 15.8% +3.1 ppts

Net pro�t for the Trading and Distribution division rose by 28.1% to QAR 147.2m, principally due to a 3.1 percentage point improvement in the net margin to 18.9%.

The principal factors behind this signi�cant margin expansion were an expanding product line to ful�l grow-ing market demands alongside the wider geographical coverage of our distribution footprint.

Aamal Trading and Distribution operations currently include:

a. Ebn Sina Medical: the leading pharmaceutical distribution company in Qatarb. Aamal Medical: a leading medical equipment supplierc. Aamal Trading & Distribution: a leading distributor of automotive products, lubricanta, home appliancesd. Foot Care Centre: provider of a range of foot care services and productse. Ebn Sina Health Care Solutions: a modern chain of pharmacies located in City Center Dohaf. Aamal Optical Supplies W.L.L.: an importer, manufacturer and supplier of optical supplies and servicesg. Al Farazdaq Company: provider of printing solutions and trader of o�ce supply products

Trading and Distribution Division

38


Ebn Sina MedicalAamal owns 100% of Ebn Sina Medical, the leading provider of pharmaceutical, hospital supplies and consumer health products in Qatar, representing in excess of 50 international leading healthcare manufacturers from more than 20 countries in-cluding Roche, AstraZeneca, Novartis Pharma, B-Braun, Boston Scienti�c and Nuxe. Ebn Sina Medical also operates a retail chain that includes a pharmacy and tow Foot Care Centres providing a range of clinical foot care services, foot care products and specialist footwear In 2015, Ebn Sina Medical witnessed several operational and structural improve-ments including the establishment of several new business partnerships within the pharmaceutical and consumer health sectors, the registration of eight new repre-sentative companies with the Ministry of Health as well as 40 pharmaceutical prod-ucts, and the classi�cation of more than 80 consumer products. Ebn Sina Medical expanded its distribution �eet and vehicles, whilst also completing an upgrade of its warehouse facility that includes temperature mapping and the �xing of air cur-tains for greater control of the warehouse internal environment during the open-ing of doors during loading and o�oading.

In terms of quality control, Ebn Sina Medical successfully passed the ISO Surveil-lance Audit in November 2015 and updated its ISO Quality Management System, along with passing in excess of 10 quality audits of our warehouse and operations conducted by its multinational suppliers.


39

Aamal Medical

Aamal Optical Supplies W.L.L.

Aamal owns 100% of Aamal Medical, a leading medical equipment supplier in Qa-tar. Aamal Medical has exclusive distribution agreements with a number of leading international medical equipment suppliers. In addition to sales of medical equip-ment, Aamal Medical also provides consultancy on, and builds, operating room theatres, and installs hospital information systems.

In 2015 Aamal Medical has continued to supply equipment to Hamad Medical Cor-poration (HMC) and of particular note, expanded its o�ering to include the latest equipment available for the treatment of oncology-related illnesses.

Aamal has a 51% interest in Aamal Optical Supplies. A partnership agreement be-tween Aamal Company and Qatar Optics, one of Qatar’s leading companies in the optometry industry, was signed in 2014 establishing Aamal Optical Supplies W.L.L. The Company will be involved in the import, manufacture and distribution of pre-scription lenses, the import and distribution of contact lenses and other eye care products and services, and the opening of a specialised optical medical centre in the near term.

40


Foot Care Centre

Ebn Sina Health Care Solutions

Aamal has a 100% interest in Foot Care Centre, o�ering a broad range of biome-chanical, orthopaedic and therapeutic services for feet along with a variety of foot care products from the well-known brand SCHOLL.

Foot Care Centre is managed by Ebn Sina Medical and it has three branches in Qa-tar. Foot Care Centre is considered an important addition to the local market o�er-ing several popular therapeutic services. Foot Care Center is a registered trademark in Qatar.

In 2015, Foot Care Centre successful opened a new branch located at the Pearl, Medina Centrale.

Aamal has a 100% interest in Ebn Sina Health Care Solutions which was formerly known as Good Life Pharmacy. Ebn Sina Health Care Solutions is managed by Ebn Sina Medical and the rebranding was done in order to capitalise on the strong Ebn Sina brand ahead of expansion plans that are expected for this pharmacy chain.


41

Aamal Trading & Distribution (ATD)

Aamal owns 100% of Aamal Trading and Distribution, the exclusive distributor in Qatar of Bridgestone tyres since 1971 and a non-exclusive distributor of TOTAL oil and lubricant products since 1990; it is also involved with the supply, installation, commissioning of ‘GETTCO’ home appliances and maintenance of air conditioning and refrigeration equipment. In 2015 Aamal Trading and Distribution (ATD) launched a number of new product lines related to tyre related equipment such as tyre changers and wheel balancer alignment machines, multi-purpose �oor mounted car lifts and jacks, lubrication equipment, grease pumps, hydraulic press trolley jacks and C5 nitrogen genera-tors.

ATD plans to increase its market share in 2016 by opening new retail outlets for its automotive and home appliances o�erings, with a new showroom planned for GETTCO Home Appliances and GETTCO A/C & Refrigeration in Salwa Road in cen-tral Doha that will enhance customer coverage.

42


Aamal Company holds 65% of Al Farazdaq Company which started its operations in 2013 to provide printing solutions and trade in various o�ce supplies products. The printing press is equipped with state of the art printing machines, o�ering in-novative digital printing solutions to the business community

Al Farazdaq is also the sole agent of ‘GETTCO O�ce Supplies’, o�ering a wide range of a high quality stationery that is durable, innovative, reliable and competitively priced.

Al Farazdaq Company


43


Net pro�t* 268.7 223.3 20.3%

Net pro�t margin % 82.5% 77.3% +5.2 ppts* before fair value gains on investment properties

Underlying net pro�t for the Property division (ie. excluding fair value gains on investment properties) rose by 20.3% to QAR 268.7 million year on year, due to a combination of revenue growth of almost 13% year on year and signi�cant expansion in the margin to 82.5% (2014: 77.3%).

This very strong performance was driven by annual rental increases throughout the year, combined with bene�ts that still continue to accrue from Phase 1 of the redevelopment of the �agship City Cen-ter Doha shopping mall.

Fair value gains on investment properties for the year were down at QAR 135.4 million (2014: QAR 251.7m), in line with the hiatus in the redevelopment of City Center Doha (Phase 1 completed end-2013; Phase 2 permission received December 2015, expected completion date of 2018).

In 2015, this sector witnessed the addition of a new JV “Aamal-ECE W.L.L.” formed through a partner-ship agreement between Aamal Company and the German company ECE Projektmanagement, one of the leading retail mall and shopping centre operators in Europe and the current operator of City Center Doha. This new JV has been set-up to meet the growing demand for shopping centre property management services (including consultancy and letting), both within Qatar itself and the wider MENA region.

Occupancy rate at both City Center and Aamal Real Estate remained at a high level of 95%, with 5% held back as a strategic reserve in order to allow for active management.

Aamal Property division owns and leases retail and residential properties through three subsidiaries: a. City Center Doha, one of the largest shopping malls in Doha, b. Aamal-ECE W.L.L. commercially known as Qatar German Mall Managementc. Aamal Real Estate

Property Division

44


City Center Doha

Aamal ECE W.L.L. (Qatar German Mall Management)

Aamal Real Estate

Aamal owns 100% of City Center Doha (CCD), inaugurated in 2000, one of the �rst shopping malls in Doha and is widely regarded as the premier mall in Qatar.

2015 saw the opening of 36 new shops at CCD and also the start of Phase two of the redevelop-ment of the mall in order to keep abreast of competition and cement its status as the country’s number one retail destination. The redevelopment aims to expand the leasable retail space but also enhance overall operational e�ciency levels once completed.

A partnership agreement between Aamal and ECE Projektmanagement was signed in April, 2015 to establish Aamal ECE W.L.L., commercially known as Qatar German Mall Management. The Com-pany specialises in the property management of shopping centres and o�ering consultancy ser-vices both within Qatar and the wider MENA Region.

Aamal owns 100% of Aamal Real Estate which comprises a) the Souq Najma (Al Haraj) which was built in 1993 as a traditional Middle Eastern souq comprising 347 shops, 25 kiosks and 24 residen-tial �ats; b) the Markhiya residential complex; and c) four other residential buildings.


45


Net pro�t 5.5 8.3 (33.7)%

Net pro�t margin % 8.0% 12.9% (4.9 ppts)

Net pro�t for the Managed Services division fell by just over a third to QAR 5.5m, principally due to a steep decline in margins to 8.0% (2014: 12.9%), a re�ection of an increasingly competitive environment in this space.

The Managed Services operations focus primarily on providing commercial facilities management, out-sourcing and other business support services.

Managed Services division currently include:a. ECCO Gulf W.L.L.: business process outsourcerb. Aamal Services: general maintenance providerc. Aamal Travel and Tourism: travel agencyd. Johnson Controls Qatar W.L.L.: facilities managers, including energy customer solutions

Managed Services Division

46


Aamal Company owns 51% of ECCO Gulf which is a joint venture with ECCO Out-sourcing, the leading Egyptian contact centre operator and business process out-sourcer. ECCO Gulf commenced operations in 2010 o�ering the outsourcing of business processes, professional services and human resources to clients in Qatar.

In 2015, ECCO Gulf established a strategic partnership with a leading global service provider “Arvato”, the German leading international service provider that focuses on digital technology, design and implement customized solutions covering a wide range of business processes along integrated service chains. These solutions include digital marketing, �nancial services, customer relationship management, supply chain management and IT services.

Aamal owns 100% of Aamal Services which provides a wide range of services, in-cluding cleaning, hotel and hospitality services, waste collection and disposal (in-cluding medical waste and solid waste), pest control and �eet/car washing.

In 2015, Aamal Services enhanced its operation through applying number of initia-tives and started the ISO certi�cation process.

ECCO Gulf W.L.L.

Aamal Services


47

Aamal Travel and Tourism

Johnson Controls Qatar W.L.L.

Aamal owns 100% of Aamal Travel and Tourism, which is an International Air Trans-port Association (IATA) accredited travel agency providing a range of travel ser-vices, including airline reservations and ticketing, worldwide hotel bookings and holiday packages.

Aamal Company owns 51% of Johnson Controls Qatar which provides facility im-provement and energy solutions to customers in Qatar.

48


Aamal Company Q.S.C.CONSOLIDATED FINANCIAL STATEMENTS

31 DECEMBER 2015

50 Independent auditors’ report

51 Consolidated �nancial statements

52 Consolidated statement of income

52 Consolidated statement of pro�t or loss and other com-prehensive income

53 Consolidated statement of cash �ows

54 Consolidated statement of changes in equity

55 Notes to the consolidated �nancial statements

Contents

50


INDEPENDENT AUDITORS’ REPORTTO THE SHAREHOLDERS OF AAMAL COMPANY Q.S.C.

Report on the consolidated �nancial statementsWe have audited the accompanying consolidated �nancial statements of Aamal Company Q.S.C. (the “Company”), which com-prise the consolidated statement of �nancial position as at 31 December 2015, the consolidated statements of income, pro�t or loss and other comprehensive income, cash �ows and changes in equity for the year then ended, and notes, comprising a summary of signi�cant accounting policies and other explanatory information.

Board of Directors’ responsibility for the consolidated �nancial statementsThe Board of Directors is responsible for the preparation and fair presentation of these consolidated �nancial statements in accordance with International Financial Reporting Standards and, for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated �nancial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibilityOur responsibility is to express an opinion on these consolidated �nancial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical require-ments and plan and perform the audit to obtain reasonable assurance about whether the consolidated �nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated �nancial statements. The procedures selected depend on our judgement, including the assessment of the risks of material mis-statement of the consolidated �nancial statements, whether due to fraud or error. In making those risk assessments, we con-sider internal control relevant to the entity’s preparation and fair presentation of the consolidated �nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the e�ectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors, as well as evaluating the overall presentation of the consolidated �nancial statements.

We believe that the audit evidence we have obtained is su�cient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated �nancial statements present fairly, in all material respects, the consolidated �nancial position of the Company as at 31 December 2015 and its consolidated �nancial performance and consolidated cash �ows for the year then ended in accordance with International Financial Reporting Standards.

Report on other legal and regulatory requirementsWe have obtained all the information and explanations which we consider necessary for the purposes of our audit. The Compa-ny has maintained proper accounting records and its consolidated �nancial statements are in agreement therewith. We con�rm that physical count of inventories was carried out in accordance with established principles. We have reviewed the accompany-ing report of the Board of Directors and con�rm that the �nancial information contained therein is in agreement with the books and records of the Company. We are not aware of any violations of the provisions of the Qatar Commercial Companies Law No. 11 of 2015 or the terms of the Company’s Articles of Association during the year which might have had a material adverse e�ect on the business of the Company or on its consolidated �nancial position as at 31 December 2015.

15 February 2016 Gopal Balasubramaniam

Doha KPMG

State of Qatar Qatar Auditors Registry Number 251


51

Aamal Company Q.S.C.CONSOLIDATED FINANCIAL STATEMENTS31 December 2015

Note 2015QR

2014QR

ASSETSCurrent assetsCash and bank balances 4 642,210,740 554,659,257Accounts receivable and prepayments 5 780,060,152 496,890,938Amounts due from related parties 6 112,907,906 318,597,869Inventories 7 237,346,337 300,570,431

1,772,525,135 1,670,718,495

Non-current assetsRetention and other non-current assets 53,147,371 21,521,549Equity-accounted investees 8 192,842,183 150,304,676Investment properties 9 6,832,332,107 6,669,136,000Property, plant and equipment 10 586,809,332 553,338,058

7,665,130,993 7,394,300,283

TOTAL ASSETS 9,437,656,128 9,065,018,778

LIABILITIES AND EQUITYCurrent liabilitiesBank overdrafts 4 1,302,167 2,346,320Accounts payable and accruals 11 394,941,366 413,573,770Amounts due to related parties 12 359,540,264 38,405,073Interest bearing loans and borrowings 13 751,312,750 671,682,995

1,507,096,547 1,126,008,158

Non-current liabilitiesInterest bearing loans and borrowings 13 180,927,119 232,698,286Employees’ end of service bene�ts 14 25,013,967 22,011,182

205,941,086 254,709,468

Total liabilities 1,713,037,633 1,380,717,626

EQUITYShare capital 15 6,300,000,000 6,000,000,000Legal reserve 16 495,946,222 435,842,111Treasury shares (2,075,865) (2,075,865)Retained earnings 655,528,295 1,031,009,690

Equity attributable to equity holders of the parent 7,449,398,652 7,464,775,936Non-controlling interests 275,219,843 219,525,216

Total equity 7,724,618,495 7,684,301,152

TOTAL LIABILITIES AND EQUITY 9,437,656,128 9,065,018,778

Sheikh Faisal Bin Qassim Al-Thani Tarek Mahmoud El Sayed Mohammad Ramahi

Chairman Managing Director Chief Financial O�cer

52


Aamal Company Q.S.C.CONSOLIDATED STATEMENT OF INCOME31 December 2015

Note2015 2014

QR QRRevenue 17 2,881,955,016 2,139,104,614

Direct costs 18 (2,239,839,441) (1,633,072,684)

GROSS PROFIT 642,115,575 506,031,930

Other income 19 24,504,680 11,785,913

Marketing and promotion expenses (19,347,973) (23,508,622)

General and administrative expenses 20 (132,084,475) (125,134,749)

Depreciation (8,258,576) (8,569,845)

Finance costs 21 (28,065,798) (30,238,041)

Share of pro�ts of equity-accounted investees 8 42,435,507 18,122,554

PROFIT BEFORE FAIR VALUE GAINS ON 521,298,940 348,489,140

INVESTMENT PROPERTIES

Net fair value gains on investment properties 9 135,436,796 251,692,874

PROFIT FOR THE YEAR 656,735,736 600,182,014

Pro�t attributable to:

Equity holders of the parent 601,041,109 577,095,585

Non-controlling interests 55,694,627 23,086,429

656,735,736 600,182,014

Basic and diluted earnings per share (QR)(attributable to equity holders of the parent) 22 0.95 0.92

Aamal Company Q.S.C.CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFor the year ended 31 December 2015

2015 2014QR QR

Pro�t for the year 656,735,736 600,182,014

Other comprehensive incomeItems that are or may be reclassi�ed to pro�t or lossUnrealised loss on available-for-sale investments - (5,461)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR 656,735,736 600,176,553

Total comprehensive income attributable to:Equity holders of the parent 601,041,109 577,091,516

Non-controlling interests 55,694,627 23,085,037

656,735,736 600,176,553



53

CONSOLIDATED STATEMENT OF CASH FLOWSFor the year ended 31 December 2015

Note2015 2014

QR QROPERATING ACTIVITIESPro�t for the year 656,735,736 600,182,014

Adjustment for:

Net fair value gains on investment properties 9 (135,436,796) (251,692,874)

Depreciation 10 53,132,486 44,137,864

Provision for employees’ end of service bene�ts 14 5,159,523 4,520,855

Allowance for impairment of trade accounts receivable 20 1,126,114 2,694,547

Loss / (pro�t) on disposal of property, plant and equipment 19 100,056 (287,032)

Provision for slow moving inventories 7 1,425,659 78,431

Interest income 19 (5,068,317) (3,315,399)

Finance costs 21 28,065,798 30,238,041

Gain on sale of available-for-sale investments - (6,550)

Share of pro�t of equity-accounted investees 8 (42,435,507) (18,122,554)

Operating pro�t before working capital changes: 562,804,752 408,427,343

Inventories 61,798,435 16,050,683

Accounts receivable and prepayments (315,921,150) (11,017,195)

Accounts payable and accruals (35,050,797) (46,477,353)

Net movement in amounts due from and due to related parties 526,825,154 (113,952,437)

Cash from operations 800,456,394 253,031,041

Finance costs paid (29,614,443) (30,540,830)

End of service bene�ts paid 14 (2,156,738) (2,467,649)

Net cash from operating activities 768,685,213 220,022,562

INVESTING ACTIVITIESInterest income received 19 5,068,317 3,315,399

Proceeds from disposal of property, plant and equipment 447,282 1,036,890

Proceeds from sale of available-for-sale investments - 26,072

Dividends received from a joint venture - 924,785

Investment in equity-accounted investees (102,000) -

Additions to investment properties 9 (27,759,311) (14,957,126)

Additions to property, plant and equipment 10 (85,602,453) (77,952,101)

Net cash used in investing activities (107,948,165) (87,606,081)

FINANCING ACTIVITIESNet movement in interest bearing loans and borrowings 27,858,588 (10,524,020)

Contributions from non-controlling interests - 1,120,000

Dividends paid (600,000,000) -

Net cash used in �nancing activities (572,141,412) (9,404,020)

INCREASE IN CASH AND CASH EQUIVALENTS 88,595,636 123,012,461

Cash and cash equivalents at 1 January 552,312,937 429,300,476

CASH AND CASH EQUIVALENTS AT 31 DECEMBER 4 640,908,573 552,312,937

54


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55

Aamal Company Q.S.C.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 31 December 2015

1 CORPORATE INFORMATION AND PRINCIPAL ACTIVITIESAamal was formed on 13 January 2001 as a private shareholding company with limited liability (W.L.L.) under the Commercial Registration Number 23245 in the State of Qatar. On 12 July 2007, the private shareholders resolved to transform Aamal into a Qatari Shareholding Company (Q.S.C.) (the “Company”). Accordingly, the Company was listed on Qatar Exchange on 5 Decem-ber 2007. The Company’s registered o�ce is at P.O. Box 22477, Doha, State of Qatar.

The Company is organised into a head o�ce (Aamal) and branches and operates in the State of Qatar. The following table sets out the principal activities of the branches:

Branch Principal activities

City Center Qatar Branch Leasing the facilities of the retail outlet complex in City Center Doha.

Aamal Real Estate Branch Residential and commercial real estate investment and property rental.

Aamal Readymix Branch Production and sale of readymix concrete.

Ebn Sina Medical Branch Wholesale and retail distribution of pharmaceuticals and general consumable products.

Aamal Medical Branch Wholesale distribution of medical equipment.

Aamal Trading and Distribution Branch Sale of tyres, lubricants, batteries and home appliances.

Aamal Services Branch Providing facilities management and cleaning services.

Aamal Travels Branch Operating a travel agency.

Aamal for Industrial Projects Branch Industrial investments.

Ebn Sina Heath Care Solutions City Center Pharmacy (Good Life Pharmacy Branch)

Sale of pharmaceuticals, baby care products, medicine and general consumable products.

Foot Care Center Branch Sale of footwear, clinical activities and general commercial trading products.

The consolidated �nancial statements were authorised for issue by the representatives of the Board of Directors of Aamal Company Q.S.C. on 15 February 2016.

2 BASIS OF CONSOLIDATIONThe consolidated �nancial statements comprise the �nancial statements of Aamal Company Q.S.C. (the “Company”) and its subsidiaries, associates and joint controlled entity (together referred to as the “Group”).

SubsidiariesSubsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns of its involvement with the entity and has the ability to a�ect those returns through its power over the entity. The �nan-cial statements of subsidiaries are included in the consolidated �nancial statements from the date on which control commences until the date on which control ceases. When the Group loses control over a subsidiary, it dereognises the assets and liabilities of the subsidiary, and any related non-controlling interest and other components of equity. Any resulting gain or loss is recognised in consolidated statement of income. Any interest retained in the former subsidiary is measured at fair value when control is lost.

Set out below are the Group’s principal subsidiaries at 31 December 2015. Unless otherwise stated, the subsidiaries as listed below have share capital consisting solely of ordinary shares, which are held directly by the group and the proportion of owner-ship interests held equals to the voting rights held by Group. The country of incorporation or registration is also their principal place of business:

56



2 BASIS OF CONSOLIDATION (continued)

Subsidiaries (continued)

Company nameCountry of

incorporation Principal activity

Proportion of ownership held by the

Group

Non controlling

interest

Aamal Cement Industries W.L.L. Qatar

Development and management of fac-tories and the production of curb stone, interlock slabs and cement bricks.

99% 1%

IMO Qatar Company W.L.L. Qatar

Construction and repair of power plant, establishment and management of in-dustrial enterprises and acting as a rep-resentative for the international compa-nies.

60% 40%

Senyar Industries Qatar Holding W.L.L. Qatar

Management of subsidiaries and asso-ciates, owning of patents, businesses and subletting them and provision of investment portfolio management for its subsidiaries and associates. Under the shareholders agreement signed be-tween the Group and the other share-holders, the Group is able to appoint the chairman and two other members to the Board of Directors (out of six members) and is able to govern the �-nancial and operating policies of Senyar Industries Qatar Holding W.L.L. Accord-ingly, the company is considered as a subsidiary of the Group.

50% 50%

Doha Cables Qatar W.L.L. Qatar

Maintenance and manufacture of elec-tric cables, equipment and tools. Doha Cables Qatar W.L.L. is 91.875% (e�ec-tively) owned by Senyar Industries Qa-tar Holding W.L.L., a subsidiary of the Group. The Group has the power, indi-rectly through Senyar Industries Qatar Holding W.L.L., to govern �nancial and operating policies of Doha Cables Qa-tar W.L.L. and accordingly the company was considered as a subsidiary of the Group.

45.9% 54.1%

Ecco Gulf Company W.L.L. QatarO�ers professional and business pro-cess outsourcing and call center ser-vices.

51% 49%


57

Company nameCountry of

incorporation Principal activity

Proportion of ownership held by the

Group

Non controlling

interest

Advanced Pipes and Casts Company W.L.L. Qatar

Manufacturing of wide cement and glass reinforced pipes systems for in-frastructure and pipeline projects. The Group has the power to govern the �nancial and operating policies of Ad-vanced Pipes and Casts Company W.L.L. by virtue of a shareholders’ agreement. Thus the Company has been considered as a subsidiary of the Group.

50% 50%

Johnson Controls Qatar W.L.L. Qatar

Provision of facilities management services, energy services and building maintenance and cleaning services to corporate clients.

51% 49%

Ci-San Trading W.L.L. Qatar

Selling, buying, renting and develop-ing real estate, investment in shares, management of real estate properties, owning the patent and trademark and trading in equipment and vehicles. The Group has the power to govern the �-nancial and operating policies of Ci-San by virtue of a shareholders’ agreement.

50% 50%

Gulf Rocks Qatar Retail distribution of aggregates. 74.5% 25.5%

Innovative Lighting Company W.L.L. Qatar Trading of Light Emitting Diode (LED)

Lamps and other lighting products. 70% 30%

Al Farazdaq Company W.L.L. Qatar Trading of o�ce supplies and providing

printing and laminating services. 65% 35%

Aamal Optical Supplies W.L.L. Qatar Trading of optical supplies 51% 49%

Aamal For Maritime Transportation ServicesW.L.L.

QatarPurchasing and leasing of ships for transportation of goods 74.7% 25.3%

Non-controlling interestsNon-controlling interests are measured at their proportionate share of the acquiree’s identi�able net assets at the acquision date. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transac-tions.

Transactions eliminated on consolidationIntra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are elim-inated. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unreaslised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.



Subsidiaries (continued)

58




Interests in joint arrangements and associatesDetails of each of the Group’s material joint ventures and associates at the end of the reporting period are as follows

Company nameCountry of incorpora-tion

Principal activityProportion of owner-ship and voting power held by the Group

El Sewedy Cables Qatar W.L.L. Qatar

Trading in electro-mechanical equipment and providing related services. El Sewedy Cables Qa-tar W.L.L. is 49% owned (with 55% share of prof-its / (losses) by Senyar Industries Qatar Holding W.L.L., a subsidiary of the Group. However due to a revised shareholders agreement, the enti-ty has become a joint venture e�ective from 1 January 2012 which is accounted for under the equity method.

55%

Frijns Structural Steel Middle East W.L.L. Qatar Entity is engaged in steel fabrications. Group

measure the associate under equity method. 20%

Aamal ECE L.L.C. Qatar

Entity is joint venture between the Group and ECE Projektmanagement International G.m.b.H, and is engaged in property management ser-vices.

51%

3 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1 BASIS OF PREPARATION

The consolidated �nancial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).

The consolidated �nancial statements have been presented in Qatari Riyals (QR), which is the Company’s functional and presen-tation currency and have been rounded to the nearest Qatari Riyal. The consolidated �nancial statements are prepared under the historical cost convention modi�ed to include the measurement at fair value of investment properties and available-for-sale investments.

3.2 CHANGES IN ACCOUNTING POLICIES

The accounting policies adopted are consistent with those of the previous �nancial year except for the following standards e�ective for the annual period beginning on or after 1 January 2015. These standards and amendments, did not have any ma-terial impact to the Group.

Amendments to IAS 19 “De�ned Bene�t Plans: Employee Contributions”The amendments to IAS 19 clarify how an entity should account for contributions made by employees or third parties to de�ne bene�t plans, based on whether those contributions are dependent on the number of years of service provided by the employ-ee.

For contributions that are independent of the number of years of service, the entity may either recognize the contributions as a reduction in the service cost in the period in which the related service is rendered, or to attribute them to the employees periods of service using the project unit credit method; whereas for contributions that are dependent on the number of years of service, the entity is required to attribute them to the employees periods of service.


59


3 BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

3.2 CHANGES IN ACCOUNTING POLICIES (continued)

Annual Improvements to IFRSs 2010–2012 Cycle and 2011-2013 CycleFollowing table includes the recent changes to IFRS that are required to be adopted in the current period.

Standard Clari�cations brought about by amendments Cycle

IFRS 1 First-time Adoption of International Finan-cial Reporting Standards IFRS version that a �rst-time adopter can apply 2011-2013

IFRS 2 Share-based Payment Meaning of “vesting condition” 2010-2012

IFRS 3 Business Combination

Classi�cation and measurement of contingent con-siderationScope exclusion for the formation of joint arrange-ments

2010-2012

2011-2013

IFRS 8 Operating Segments Disclosures on the aggregation of operating seg-ments 2010-2012

IFRS 13 Fair Value Measurement Measurement of short-term receivables and payablesScope of portfolio exception

2010-20122011-2013

IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets

Restatement of accumulated depreciation (amortiza-tion) on revaluation 2010-2012

IAS 24 Related Party Disclosures De�nition of “related party” 2010-2012

IAS 40 Investment Property Inter-relationship of IFRS 3 and IAS 40 2011-2013

3.3 IASB STANDARDS AND INTERPRETATIONS ISSUED BUT NOT ADOPTED

The following IASB standards/amendments have been issued but are not yet mandatory, and have not been early adopted by the Group:

Standard/Interpretation Content E�ective

dateIFRS 9 Financial Instruments (new standard) 1 January 2018

IFRS 15 Revenue from Contracts with Customers (new standard) 1 January 2018

IAS 1 Disclosure Initiative (amendments) 1 January 2016

IFRS 11 Accounting for Acquisitions of Interests in Joint Operations (amendment) 1 January 2016

IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and itsAssociate or Joint Venture (amendments) 1 January 2016

IFRS 10, IFRS 12 and IAS 28 Investment Entities: Applying the Consolidation Exception (amendments) 1 January 2016

IAS 16 and IAS 38 Clari�cation of Acceptable Methods of Depreciation and Amortisation (amend-ments) 1 January 2016

The Group is considering the implications of the above standards, and the timing of adoption by the Group.

60




3.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business combinationsThe Group accounts for business combinations using the acquisition method when control is trnasferred to the Group. The consideration transferred in the acquisition is generally measured at fair value, as are the identi�able net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in pro�t or loss immedi-ately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are recognised in pro�t or loss.

Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is clas-si�ed as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in pro�t or loss.

Cash and cash equivalents For the purpose of the consolidated statement of cash �ows, cash and cash equivalents consist of cash and bank balances and short term bank deposits with an original maturity of three months or less, net of outstanding bank overdrafts.

Accounts receivableAccounts receivable are stated at original invoice amount less an allowance for any uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written o� when there is no possibility of recovery.

InventoriesInventories are stated at the lower of cost and net realisable value. Costs are those expenses incurred in bringing each product to its present location and condition.

Goods for resale/work in progress - Cost of direct materials and labour plus attributable overheads based on a normal level of activity.

Raw material and spare parts - Purchase cost on a weighted average basis. Net realisable value is based on estimated selling price less any further costs expected to be incurred to completion and dis-posal.

Interests in equity-accounted investeesThe Groups, interest in equity-accounted investees comprise interest in associates and joint venture.

Associates are those entities in which the Group has signi�cant in�uence, but not control or joint control, over the �nancial and operating policies. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.

Interests in associates and the joint venture are accounted for using the equity method. They are recognised initially at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated �nancial statements include the Group’s share of the pro�t or loss and other comprehensive income of equity-accounted investees, until the date on which signi�cant in�uence or joint control ceases.

The reporting dates of the equity-accounted investees and the Group are identical and the equity-accounted investees’ ac-counting policies conform to those used by the Group for like transactions and events in similar circumstances.


61



3.4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Investment propertiesLand and buildings are considered as investment properties only when they are being held to earn rentals or for capital appre-ciation or for both.

Investment properties are measured initially at cost, including transaction costs and borrowing costs that are directly attribut-able to construction of the asset. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met; and excludes the costs of day-to-day servicing of an investment property. Subsequent to initial recognition, investment properties are stated at fair value, which re�ects market conditions at the reporting date. Gains or losses arising from changes in the fair values of investment properties are included in the consoli-dated statement of income in the year in which they arise.

Investment properties are derecognised when either they have been disposed o� or when the investment property is perma-nently withdrawn from use and no future economic bene�t is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognised in the consolidated statement of income in the year of retirement or disposal.

Property under construction is dealt with under IAS 40 and recorded at cost less accumulated impairment losses until either its fair value becomes reliably determinable or construction is completed (whichever is earlier). At that time, it is reclassi�ed as investment property and a fair value adjustment is recognised in the consolidated statement of income.

Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. If owner occupied property becomes an investment property, the di�erence between the carrying value and the fair value at the date of transfer is recognised as a revaluation reserve in the equity and is released to the consolidated statement of income upon disposal of such property.

Property, plant and equipmentProperty, plant and equipment is stated at cost including borrowing costs that are eligible for capitalisation and excluding the costs of day-to-day servicing, less accumulated depreciation and any impairment in value. Depreciation is provided on a straight-line basis on all property, plant and equipment. The rates of depreciation are based upon the following estimated useful lives:

Buildings 20 years

Leasehold improvements 2-8 years

Truck mixers and motor vehicles 4-15 years

Plant and machinery 8-25 years

Furniture, �xtures and o�ce equipment 3-5 years

Computers and related software 3-5 years

Vessel 20 years

Capital work in progress Not depreciated

The carrying amounts are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets are written down to their recoverable amount, being the higher of their fair value less costs to sell and their value in use. Expenditure incurred to replace a component of an item of property, plant and equipment that is accounted for sepa-rately is capitalised and the carrying amount of the component that is replaced is written o�. Other subsequent expenditure is capitalised only when it increases future economic bene�ts of the related item of property, plant and equipment. All other expenditure is recognised in the consolidated statement of income as the expense is incurred.

62





Property, plant and equipment (continued)An item of property, plant and equipment is derecognised upon disposal or when no future economic bene�ts are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the consolidated statement of income in the year the asset is derecognised. The asset’s residual values, useful lives and method of depreciation are reviewed, and adjusted if appropriate, at each �nancial year end.

Borrowing costsBorrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes substan-tial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the year they incur. Borrowing costs consist of the interest and other costs that the Group incurs in connection with the borrowing of funds.

Accounts payable and accrualsLiabilities are recognised for amounts to be paid in the future for goods or services received, whether billed by the supplier or not.

Interest bearing loans and borrowingsInterest bearing loans and borrowings are recognised initially at fair value of the amounts borrowed, less directly attributable transaction costs. Subsequent to initial recognition, interest bearing loans and borrowings are measured at amortised cost using the e�ective interest method, with any di�erences between the cost and �nal settlement values being recognized in the consolidated statement of income over the period of borrowings. Instalments due within one year at amortised cost are shown as a current liability.

Gains or losses are recognised in the consolidated statement of income when the liabilities are derecognised. Interest relating to interest bearing loans and borrowings is expensed in the year in which it is incurred except those qualify for capitalisation.

Tenant depositsTenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material. Any di�erence between the initial fair value and the nominal amount is included as a component of rental income and rec-ognised on a straight-line basis over the lease term.

Derecognition of �nancial assets and liabilities

a) Financial assets

A �nancial asset (or, where applicable a part of a �nancial asset or part of a group of similar �nancial assets) is derecognised where:

• The rights to receive cash �ows from the asset have expired;• The Group has transferred its rights to receive cash �ows from the asset or has assumed an obligation to pay the received

cash �ows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substan-tially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash �ows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuing involvement in the asset.

In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that re�ects the rights and obligations that the Group has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.


63




Derecognition of �nancial assets and liabilities (continued)

b) Financial liabilitiesA �nancial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. Where an existing �nancial liability is replaced by another from the same lender on substantially di�erent terms, or the terms of an exist-ing liability are substantially modi�ed, such an exchange or modi�cation is treated as a derecognition of the original liability and the recognition of a new liability, and the di�erence in the respective carrying amounts is recognised in the consolidated statement of income.

Impairment and uncollectibility of �nancial assetsAn assessment is made at each reporting date to determine whether there is objective evidence that a speci�c �nancial asset may be impaired. If such evidence exists, any impairment loss is recognised in the consolidated statement of income. Impair-ment is determined as follows:

a. For assets carried at fair value, impairment is the di�erence between cost and fair value;b. For assets carried at cost, impairment is the di�erence between cost and the present value of future cash

�ows discounted at the current market rate of return for a similar �nancial asset.c. For assets carried at amortised cost, impairment is the di�erence between carrying amount and the present

value of future cash �ows discounted at the original e�ective interest rate.

ProvisionsProvisions are recognised when the Group has an obligation (legal or constructive) arising from a past event, and the costs to settle the obligation are both probable and able to be reliably measured.

Employees’ end of service bene�tsThe Group provides end of service bene�ts to all employees in accordance with employment contracts and Qatar Labour Law. The entitlement to these bene�ts is based upon the employees’ �nal salary and length of service, subject to the completion of a minimum service period. The expected costs of these bene�ts are accrued over the period of employment.

Revenue Revenue is recognised to the extent that it is probable that the economic bene�ts will �ow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received excluding discounts, rebates and duty. The following speci�c recognition criteria must also be met before revenue is recognised:

Sale of goodsSales are recognised when signi�cant risks and rewards of ownership of the goods have passed to the buyer and the amount of revenue can be measured reliably.

Rental incomeRental income from investment properties is accounted for on a time proportion basis over the period of tenancy. Incentives for leases to enter into lease agreements are spread evenly over the lease term, even if the payments are not made on such basis. Income arising from expenses recharged to tenants is recognised in the year in which the expenses can be contractually received. Service charges and other such receipts are included gross of related costs in revenues as the Group acts as princi-pal in this regard. Premiums received to terminate leases are recognised in the consolidated statement of income when they arise.

Service incomeService income is recognised when the service is rendered and the outcome of the transactions can be estimated reliably.

Commission Commission is accounted for on an accrual basis, when the right to receive the income is established.

64





Income on travel agenciesIncome on travel agencies is accounted for in the year in which the airline tickets are sold.

Interest incomeInterest income is recognised as the interest accrues using the e�ective interest rate method.

Foreign currenciesTransactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the reporting date. All di�erences are recognised in the statement of income.

Use of estimatesThe preparation of the Group’s consolidated �nancial statements in conformity with International Financial Reporting Stan-dards (IFRS) requires management to make estimates and assumptions that a�ect the reported amounts of assets and liabil-ities and disclosure of contingent assets and liabilities at the reporting date and the reported amounts of revenues and ex-penses during the reporting period. Although these estimates are based on management’s best knowledge of current events and actions, actual results may ultimately di�er from those estimates. (Signi�cant assumptions, accounting judgments and estimates used in preparing these consolidated �nancial statements are disclosed in Note 30).

The estimates and underlying assumptions are reviewed regularly. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision a�ects only that period or in the period of the revision and future periods if the revision a�ects both current and future periods.

Fair valuesA number of Group’s accounting policies and disclosures require the measurement of fair values, for both �nancial and non-�-nancial assets and liabilities. The Group has an established control framework with respect to the measurement of fair values. When measuring the fair value of an asset or a liability, the Group uses market observable data for the valuation. Fair values are categorised into di�erent levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

i. Level 1 – Unadjusted quoted prices in active markets for identical assets and liabilities,ii. Level 2 – Other observable inputs not included within level 1 of the fair value hierarchyiii. Level 3 – Unobservable inputs (including entity’s own data, which are adjusted if necessary to re�ect the assump-

tions market participants would use in the circumstances.)

The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Treasury sharesWhen share capital recognized in equity is repurchased (by the Company or any of its subsidiaries), the amount of the con-sideration paid, which includes directly attributable costs, is recognized as a deduction from equity. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or de�cit on the transaction is presented in share premium.


65


4 CASH AND CASH EQUIVALENTS

For the purpose of consolidated statement of cash �ows, cash and cash equivalents comprise the following balances:

2015QR

2014QR

Bank accounts 311,620,406 200,575,677

Short term bank deposits 330,590,334 354,083,580

Cash and bank balances 642,210,740 554,659,257

Bank overdrafts (1,302,167) (2,346,320)

Cash and cash equivalents 640,908,573 552,312,937

The short term bank deposits are made for varying periods between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short term deposit rates.

5 ACCOUNTS RECEIVABLE AND PREPAYMENTS

2015QR

2014QR

Trade accounts receivable 637,190,936 435,448,524

Less: Impairment of trade accounts receivable (26,815,749) (27,267,833)

610,375,187 408,180,691

Advances to suppliers and prepayments 109,716,560 55,455,801

Retention receivables 47,776,525 26,364,554

Other receivables 12,191,880 6,889,892

780,060,152 496,890,938

As at 31 December 2015, trade accounts receivable amounting to QR 26,815,749 (2014: QR 27,267,833) were impaired. Move-ments in the allowance for impairment of trade accounts receivable were as follows:

2015QR

2014QR

At 1 January 27,267,833 26,901,412

Charge for the year (Note 20) 1,126,114 2,694,547

Amounts written o� - (2,262,731)

Unused amounts reversed (1,578,198) (65,395)

At 31 December 26,815,749 27,267,833

66



5 ACCOUNTS RECEIVABLE AND PREPAYMENTS (continued)

As at 31 December, the ageing of unimpaired trade accounts receivable was as follows:

Past due but not impairedNeither

past due nor impaired

QR

Up to 30 daysQR

31-60daysQR

61-90daysQR

91-120daysQR

> 120 daysQR

TotalQR

2015 610,375,187 309,195,789 166,345,916 49,655,085 12,394,533 6,497,321 66,286,5432014 408,180,691 222,197,686 73,174,740 25,964,086 23,817,278 10,564,995 52,461,906

Unimpaired receivables are expected, on the basis of past experience, to be fully recoverable. It is not the practice of the Group to obtain collateral over receivables.

6 AMOUNTS DUE FROM RELATED PARTIES

2015 2014

QR QR

Al Faisal Holding Company W.L.L. - 155,825,487

El Sewedy Cables Qatar W.L.L 83,043,696 129,179,996

Al Jazi Real Estate Investment Company W.L.L.- Al Jazi Real Estate Branch 127,088 678,817

Deliopolis W.L.L. 13,595 -

El Sewedy Electric Egypt W.L.L. - 4,359,010

Maintenance Management Group Qatar W.L.L. 2,167,717 1,048,749

EL Sewedy Cables – Dubai 3,484,958 2,887,101

Al-Arabia Land Transporting Company W.L.L. 127,700 352,135

El Sewedy Holding Egypt 4,516,814 57,627

Frijns Structural Steel Middle East W.L.L. - 55,104

Al Farman for Investment & International Trading Company W.L.L. 133,707 158,645

Qatar Bahrain International Cinema W.L.L. 79,954 78,302

Gulf English School 44,515 44,557

Al Rayyan Tourism Investment Company W.L.L. 13,592,059 18,714,551

Other related parties 5,576,103 5,157,788

112,907,906 318,597,869


67


6 AMOUNTS DUE FROM RELATED PARTIES (continued)

Notes:i. Transactions with related parties are carried out through open account and Directors do not consider any receivables to

be past due or impaired.ii. Related party transactions are disclosed in Note 25.

7 INVENTORIES

2015 2014

QR QR

Goods for resale 139,688,712 176,135,660

Raw materials and spare parts 53,598,649 55,494,154

Work in progress 26,056,911 8,649,899

Goods in transit 21,287,212 62,473,125

240,631,484 302,752,838

Less: Provision for obsolete and slow moving inventories (3,285,147) (2,182,407)

237,346,337 300,570,431

Movements in the provision for obsolete and slow moving inventories were as follows:

2015 2014

QR QR

At 1 January 2,182,407 3,851,692

Charge for the year (Note 18) 1,425,659 78,431

Reversals (22,000) (1,227,254)

Amounts written o� (300,919) (520,462)

At 31 December 3,285,147 2,182,407

8 EQUITY-ACCOUNTED INVESTEES

The Group has the following investments in equity-accounted investees.

2015 2014

QR QR

Interests in joint venture 183,913,196 144,371,432

Interests in associates 8,928,987 5,933,244

At 31 December 192,842,183 150,304,676

Group’s share of pro�ts from the equity-accounted investees are as follows:

Pro�t share from investment in joint venture 39,439,764 15,834,033

Pro�t share from investment in associates 2,995,743 2,288,521

42,435,507 18,122,554

68



8 EQUITY-ACCOUNTED INVESTEES (continued)

Country ofincorporation Relationship Proportion of ownership and voting

power held by the Group2015 2014

El Sewedy Cables Qatar W.L.L. Qatar Joint venture 55% 55%

Frijns Structural Steel Middle East W.L.L. Qatar Associate 20% 20%

Aamal ECE L.L.C. Qatar Joint venture 51% -

9 INVESTMENT PROPERTIES

a) Reconciliation of carrying amount

2015 2014

QR QR

At 1 January 6,669,136,000 6,402,486,000

Additions 27,759,311 14,957,126

Net gain from fair value adjustment 135,436,796 251,692,874

At 31 December 6,832,332,107 6,669,136,000

b) Measurement of fair valueThe fair values of the Group’s investment properties as at 31 December 2015 and 31 December 2014 have been arrived at on the basis of valuations carried out on the respective dates by professionally quali�ed, independent valuer not related to the Group. The independent valuer has appropriate quali�cations and recent experience in the valuation of properties in the rel-evant locations. The fair value was determined based on market comparable approach that re�ects recent transaction prices for similar properties.

Details of the Group’s investment properties and information about the fair value hierarchy as at 31 December are as follows:

Investment properties - Level 3 fair value

2015 2014

At 1 January 6,669,136,000 6,402,486,000

Additions and transfers from property, plant and equipment 27,759,311 14,957,126

Gain included in pro�t and lossNet gain from fair value adjustment 135,436,796 251,692,874

At 31 December 6,832,332,107 6,669,136,000

The Group recognizes transfers between levels of fair value hierarchy as of the end of the reporting period during which the transfer has occurred. There were no transfers between the fair value hierarchy during the year.

Valuation technique and signi�cant unobservable inputs

The valuer has applied comparable method to determine the market value of the properties. The comparable method of valuation comprises:• The identi�cation of the transacted evidence for the same or similar type of property within nearby vicinity;• Comparative analysis of the listed properties in the market;• Discussions with active real estate agents within the locality.


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0,93

9,88

821

,511

,285

18,0

02,5

83-

44,8

13,6

6680

6,20

3,60

1

Addi

tions

777,

254

2,98

3,16

27,

743,

266

8,33

5,08

81,

992,

659

1,08

0,62

745

,698

,382

18,7

09,9

4487

,320

,382

Rela

ting

to d

ispo

sals

/w

rite-

o�

-(5

,671

,539

)(4

5,75

8)(1

,450

,094

)(1

06,0

31)

(721

,982

)-

-(7

,995

,404

)

Tran

sfer

from

cap

ital

wor

k in

pro

gres

s5,

733,

997

4,32

3,99

622

,123

,926

10,9

46,3

86-

59,1

53-

(43,

187,

458)

-

At 3

1 D

ecem

ber 2

015

224,

744,

848

47,7

76,1

3512

6,38

3,50

037

8,77

1,26

823

,397

,913

18,4

20,3

8145

,698

,382

20,3

36,1

5288

5,52

8,57

9

Dep

reci

atio

n:-

At 1

Janu

ary

2015

30,4

83,2

8422

,934

,476

54,3

71,0

4611

3,55

1,99

316

,738

,268

14,7

86,4

76-

-25

2,86

5,54

3

Char

ge fo

r the

yea

r9,

364,

411

3,30

0,54

47,

392,

697

28,8

49,9

772,

424,

455

1,45

2,45

651

7,23

0-

53,3

01,7

70

Rela

ting

to d

ispo

sals

/w

rite-

o�

-(5

,624

,634

)(4

5,75

8)(9

98,9

57)

(64,

147)

(714

,570

)-

-(7

,448

,066

)

At 3

1 D

ecem

ber 2

015

39,8

47,6

9520

,610

,386

61,7

17,9

8514

1,40

3,01

319

,098

,576

15,5

24,3

6251

7,23

0-

298,

719,

247

Net

car

ryin

g am

ount

s:

At 3

1 D

ecem

ber 2

015

184,

897,

153

27,1

65,7

4964

,665

,515

237,

368,

255

4,29

9,33

72,

896,

019

45,1

81,1

5220

,336

,152

586,

809,

332

Not

es:

i. D

epre

ciat

ion

char

ge fo

r the

yea

r am

ount

ing

to Q

R 44

,873

,910

(201

4: Q

R 35

,568

,019

) is

incl

uded

in th

e di

rect

cos

ts a

nd a

n am

ount

of Q

R 16

9,28

4 (2

014:

QR

157,

621)

has

bee

n ca

pita

lised

un

der c

apita

l wor

k in

pro

gres

s.ii.

Th

e ca

pita

l wor

k in

pro

gres

s in

clud

es c

apita

lised

bor

row

ing

cost

s am

ount

ing

to Q

R 1,

548,

645

(201

4: Q

R 30

2,78

9).

iii.

The

build

ings

are

con

stru

cted

on

a pl

ot o

f lan

d ta

ken

on a

long

term

ope

ratin

g le

ase.

70


Aam

al C

ompa

ny Q

.S.C

.N

OTE

S TO

TH

E CO

NSO

LID

ATED

FIN

AN

CIA

L ST

ATEM

ENTS

For t

he y

ear e

nded

31

Dec

embe

r 201

5

10 P

ROPE

RTY,

PLA

NT

AN

D E

QU

IPM

ENT

(con

tinu

ed)

Build

ings

QR

Leas

ehol

d im

prov

e-m

ents

Q

R

Truc

k m

ixer

s an

d m

otor

veh

i-cl

es QR

Plan

t and

m

achi

nery

QR

Furn

itur

e,

�xtu

res

and

o�ce

eq

uipm

ent

QR

Com

pute

rs

and

rela

ted

soft

war

eQ

R

Capi

tal w

ork

in p

rogr

ess

QR

Tota

l Q

R

Cost

:A

t 1 Ja

nuar

y 20

1413

9,37

5,43

637

,258

,191

94,1

85,7

3527

0,73

3,86

519

,700

,865

16,9

78,3

1915

2,45

6,03

773

0,68

8,44

8

Addi

tions

1,00

5,89

32,

289,

343

4,02

7,25

02,

672,

695

2,36

5,25

51,

176,

948

64,8

75,1

2778

,412

,511

Rela

ting

to d

ispo

sals

/writ

e-o�

-

-(1

,650

,919

)(1

23,9

44)

(554

,835

)(1

75,6

34)

(392

,026

)(2

,897

,358

)

Tran

sfer

from

cap

ital w

ork

in p

rogr

ess

77,8

52,2

686,

592,

982

-87

,657

,272

-22

,950

(172

,125

,472

)-

At 3

1 D

ecem

ber 2

014

218,

233,

597

46,1

40,5

1696

,562

,066

360,

939,

888

21,5

11,2

8518

,002

,583

44,8

13,6

6680

6,20

3,60

1

Dep

reci

atio

n:A

t 1 Ja

nuar

y 20

1423

,193

,720

19,4

74,9

7050

,161

,313

90,3

08,5

4014

,276

,232

13,3

02,7

83-

210,

717,

558

Char

ge fo

r the

yea

r7,

289,

564

3,45

9,50

65,

751,

561

23,3

37,1

502,

837,

020

1,62

0,68

4-

44,2

95,4

85

Rela

ting

to d

ispo

sals

/writ

e-o�

--

(1,5

41,8

28)

(93,

697)

(374

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)(1

36,9

91)

-(2

,147

,500

)

At 3

1 D

ecem

ber 2

014

30,4

83,2

8422

,934

,476

54,3

71,0

4611

3,55

1,99

316

,738

,268

14,7

86,4

76-

252,

865,

543

Net

car

ryin

g am

ount

s:

At 3

1 D

ecem

ber 2

014

187,

750,

313

23,2

06,0

4042

,191

,020

247,

387,

895

4,77

3,01

73,

216,

107

44,8

13,6

6655

3,33

8,05

8


71


11 ACCOUNTS PAYABLE AND ACCRUALS2015

QR2014QR

Trade accounts payable 196,059,778 257,041,556

Advances from customers and tenants 48,760,202 35,378,605

Accruals 60,140,637 38,275,855

Other payables 89,980,749 82,877,754

394,941,366 413,573,770

12 AMOUNTS DUE TO RELATED PARTIES 2015 2014

QR QR

Al Faisal Holding Company W.L.L. 308,368,728 -

Arab Company for Fiber Products 18,469,595 18,513,862

El Sewedy Cables Egypt 749,045 -

Egyplast Egypt 2,804,831 6,264,525

Aamal ECE L.L.C. 16,838,254 -

United Industries Company W.L.L. 548,629 5,430,856

El Sewedy Cables Egypt - 892,937

United Wire Company W.L.L. 3,506,673 460

Gettco Company W.L.L. – Gettco Refrigeration and Airconditioning 650,556 783,009

C&C Lightway, Inc. 3,563,070 2,951,512

Integrated Information Systems 475,328 -

Al Shaab Group of Companies 52,338 149,505

Other related parties 3,513,217 3,418,407

359,540,264 38,405,073

Note:Related party transactions are disclosed in Note 25.

72



13 INTEREST BEARING LOANS AND BORROWINGS

Notes Maturity 2015QR

2014QR

Loan 1 (i) September 2016 246,150,891 330,795,335

Loan 2 (ii) September 2016 220,000,000 220,000,000

Loan 3 (iii) December 2016 25,042,187 50,084,375

Loan 4 (iii) April 2017 104,721,875 174,536,458

Loan 5 (iv) November 2017 9,696,036 14,808,036

Loan 6 (v) December 2017 3,060,548 4,766,379

Loan 7 (vi) October 2022 142,577,598 95,325,991

Loan 8 (vii) September 2019 23,933,602 14,707,281

Bills payable (viii) 157,605,046 -

932,787,783 905,023,855

Less: Deferred �nancing cost (547,914) (642,574)

932,239,869 904,381,281

Presented in the consolidated statement of �nancial position as follows:

2015 2014

QR QR

Current portion 751,312,750 671,682,995

Non-current portion 180,927,119 232,698,286

932,239,869 904,381,281

The deferred �nancing costs consist of arrangement fees. The movements in the deferred �nancing costs were as follows:

2015 2014

QR QR

At 1 January 642,574 771,503

Additions during the year - 2,500

Amortised during the year (94,660) (131,429)

At 31 December 547,914 642,574


73


13 INTEREST BEARING LOANS AND BORROWINGS (continued)

Notes:i. Loan 1 is a USD 93,000,000 import loan facility obtained to re�nance the letters of credit. The loan carries interest at com-

mercial rate and the interest is paid at monthly intervals. The facility is repayable within 270 days including the usage period under letter of credits.

ii. Loan 2 is a secured bridge loan obtained to settle an existing loan and working capital requirements of the Company. The loan carries interest at commercial rates and interest is to be paid on quarterly basis.

iii. Loan 3 and 4 represent a loan facility obtained in two separate tranches amounting to QR 309,583,750 (USD 85 million) for the purpose of refurbishment and construction of facilities in one of the investment properties. The loan consist from tranche A amounting to QR 100,168,750 (USD 27.5 million) and tranche B amounting to QR 209,415,000 (USD 57.5 million). The tranche A is repayable in 16 equal quarterly instalments and tranche B is repayable in 12 equal quarterly instalments, commencing from March 2013 and July 2014 respectively. The loan carries interest at commercial rates.

iv. Loan 5 represents a secured loan obtained from a commercial bank which is payable by 50 equal instalments of QR 426,000 with a last instalment of QR. 324,036 with e�ect from 01 October 2013. The loan carries interest at commercial market rates.

v. Loan 6 represents a secured loan obtained from a commercial bank which carries interest at commercial market rates and is payable by 57 equal instalments of QR 160,000 with a last instalment of QR 142,255 with e�ect from 31 December 2012.

vi. Loan 7 is an Islamic Financing Arrangement obtained for construction of a manufacturing plant. The yearend balance represents partially drawn amount out of total facility. The loan is secured by joint corporate guarantee by the sharehold-ers. The loan carries pro�t at Islamic Financing rates and re-payable in quarterly instalments starting from the end of the 24 months grace period from the date of loan drawn.

vii. Loan 8 represents secured loans obtained from a commercial bank on 04 May 2014, to �nance the purchase of heavy equipment and machines. The loan is payable by 18 quarterly instalments of QR 1,672,059 with a last instalment of QR 524,778 with e�ect from 31 March 2015 and carries interest at commercial market rates.

viii. Bills payable is a loan facility from banks. The purpose of the arrangement is to re�nance the letter of credit. This facility carries interest at commercial rate and is paid at monthly intervals. The facility is repayable within 180 days including usage period under letter of credits.

74



14 EMPLOYEES’ END OF SERVICE BENEFITS

Movements in the provision re�ected in the consolidated statement of �nancial position were as follows:

2015 2014

QR QR

At 1 January 22,011,182 19,957,976

Provision made during the year 5,159,523 4,520,855

End of service bene�ts paid during the year (2,156,738) (2,467,649)

At 31 December 25,013,967 22,011,182

15 SHARE CAPITAL

2015 2014

QR QR

Authorised

630,000,000 (2014: 600,000,000) shares of QR 10 each 6,300,000,000 6,000,000,000

2015 2014

Number of shares QR Number of

shares QR

Issued and fully paidAt 1 January 600,000,000 6,000,000,000 600,000,000 6,000,000,000

Issue of bonus shares 30,000,000 300,000,000 - -

At 31 December 630,000,000 6,300,000,000 600,000,000 6,000,000,000

All shares are of same class and carry equal voting rights.

16 LEGAL RESERVE

As required by Qatar Commercial Companies’ Law No. 11 of 2015, 10% of the pro�t for the year as a minimum should be trans-ferred to legal reserve until it reaches 50% of the share capital. The reserve is not normally available for distribution except in the circumstances stipulated in the above mentioned law.

17 REVENUE

2015 2014

QR QR

Sale of goods 2,403,710,455 1,745,712,619

Rental income 302,908,512 259,517,661

Service income 94,565,230 65,074,214

Commission, incentives and agency fees 80,770,819 68,800,120

2,881,955,016 2,139,104,614



75

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 31 December 2015

18 DIRECT COSTS2015 2014

QR QR

Cost of inventories recognised as an expense 2,009,396,445 1,445,318,032

Direct salaries and wages 85,314,523 61,856,540

Operating expenses on real estate properties 36,304,878 39,383,866

Depreciation (Note 10) 44,873,910 35,568,019

Operator’s management fees 16,061,548 16,740,659

Provision for obsolete and slow moving inventories (Note 7) 1,425,659 78,431

Other operating expenses 46,462,478 34,127,137

2,239,839,441 1,633,072,684

19 OTHER INCOME2015 2014

QR QR

Interest income 5,068,317 3,315,399

(Loss)/Pro�t on disposal of property, plant and equipment (100,056) 287,032

Miscellaneous income 19,536,419 8,183,482

24,504,680 11,785,913

20 GENERAL AND ADMINISTRATIVE EXPENSES2015 2014

QR QR

Management and employees’ costs 68,634,196 58,468,791

Rent 22,612,629 25,501,638

Allowance for impairment of trade accounts receivable (Note 5) 1,126,114 2,694,547

Insurance and professional fees 3,772,054 2,841,518

Communication costs 1,647,147 1,950,344

Training and business development 1,667,878 1,530,354

Repairs and maintenance 1,840,273 1,423,607

Postage, printing and stationery 847,085 594,879

Miscellaneous expenses 29,937,099 30,129,071

132,084,475 125,134,749

21 FINANCE COSTS2015 2014

QR QR

Interest expense 27,971,138 30,106,612

Amortisation of deferred �nancing costs 94,660 131,429

28,065,798 30,238,041

76



22 BASIC AND DILUTED EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the pro�t for the year attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. During the year, the Company issued and capital-ized bonus shares and accordingly, the previously reported earnings per share have been restated.

2015 2014

Pro�t for the year attributable to equity holders of the parent (QR) 601,041,109 577,095,585

Weighted average number of shares outstanding during the year (i) 629,842,934 629,842,934

Basic and diluted earnings per share (QR) 0.95 0.92

Notes:(i) The weighted average number of shares for the purpose of calculating earnings per share has been calculated as follows:

2015 2014

Qualifying shares at the beginning of the year 600,000,000 600,000,000

E�ect of bonus shares issued and capitalised 30,000,000 30,000,000

630,000,000 630,000,000

Less: Treasury shares (157,066) (157,066)

Weighted average number of shares at the end of the year 629,842,934 629,842,934 (ii) There were no potentially dilutive shares outstanding at any time during the year and hence the diluted earnings per share is equal to the basic earnings per share.

23 COMMITMENTS

2015 2014

QR QR

Estimated capital expenditure approved and contracted for at the year end but not provided for:

Investment properties 234,088,842 14,000,000

Property, plant and equipment 21,707,851 23,632,758

255,796,693 37,632,758

Operating lease commitments, under non-cancellable lease agreements:

Payable within one year 819,931 4,079,410

Payable after one year but not more than �ve years 1,713,548 -

2,533,479 4,079,410


77


24 CONTINGENT LIABILITIES

The Group had the following contingent liabilities from which it is anticipated that no material liabilities will arise.

2015 2014

QR QR

Letters of guarantee 497,089,379 337,600,323

Letters of credit 14,235,851 24,148,721

Notes:i. Letters of guarantee include performance, tender and bid bonds and payment guarantees given to suppliers and contrac-

tors by the Group in the ordinary course of business, which will mature within twelve months from the reporting date.

ii. Letters of credit are provided by lodging documents to the bank for purchase of trading goods from foreign suppliers, which will mature within three to six months from the date of the transaction.

25 RELATED PARTY DISCLOSURES

Related party transactionsRelated parties represent major shareholders, directors and key management personnel of the Group, and entities controlled, jointly controlled or signi�cantly in�uenced by such parties. Pricing policies and terms of these transactions are approved by the Group’s management.

Transactions with related parties included in the consolidated �nancial statements were as follows:

2015 2014

QR QR

Sale of goods and services 713,285,045 623,028,207

Rental income 1,400,510 2,456,945

Purchase of goods and services 114,633,458 48,468,965

Rental expense 9,375,332 13,922,708

Related party balancesAmounts due from and due to related parties are disclosed in Notes 6 and 12 respectively. These balances do not carry interest and are repayable on mutually agreed dates, generally within one year.

The Group did not record any impairment of receivables relating to amounts due from related parties in either year. This assess-ment is undertaken each �nancial year through examining the �nancial position of the related party and the market in which the related party operates.

ParentThe Group’s ultimate parent is Al Faisal Holding Company W.L.L.

Compensation of key management personnelThe remuneration of key management during the year was as follows:

2015 2014

QR QR

Short-term bene�ts 8,735,395 8,835,615

Employees’ end of service bene�ts 506,349 753,514

9,241,744 9,589,129

78



26 BONUS SHARES AND DIVIDEND

The Board of Directors of the Company has proposed no bonus shares or cash dividend distribution for the year 2015. (During the year 2015, the Group issued a bonus share of 5% of the paid up share capital as at 31 December 2014, amounting to QR 300,000,000 and a cash dividend of 10% of the share capital amounting to QR 600,000,000 using retained earnings as of 31 December 2014).

27 SEGMENT INFORMATION

For management purposes, the Group is organised into business units based on their nature of activities and has four report-able segments and the Head O�ce as follows:

Property: The segment consists of City Center Qatar Branch and Aamal Real Estate Branch which are involved in leasing the facilities of retail outlet complex, real estate investments, property rental businesses and property management.

Trading and distribution:The segment involves wholesale and/or retail distribution of pharmaceutical and consumable items, home appliances, medi-cal equipment, tyres and lubricants and industrial printing. The segment includes the following entities:

• Ebn Sina Medical Branch• Aamal Medical Branch • Aamal Trading and Distribution Branch• Foot Care Center Branch• Ebn Sina Health Care Solutions City Center Pharmacy (Good Life Pharmacy Branch)• Al Farazdaq Company W.L.L.• Aamal Optical Supplies Company W.L.L.

Industrial manufacturing: The segment involves manufacturing, wholesale and/or retail distribution of electric cables and tools, aggregates, ready-mix concrete and cement blocks and provision of services in relation to industrial investment, repair and construction of pow-er plants, trading of LED lighting products, management of industrial enterprises and leasing of ships for transportation of goods. The segment includes the following entities:

• Aamal Cement Industries W.L.L.• Aamal Readymix Branch• Doha Cables Qatar W.L.L. • Senyar Industries Qatar Holding W.L.L.• Advanced Pipes and Casts Company W.L.L.• Gulf Rocks Company W.L.L.• Ci-San Trading Company W.L.L.• Innovative Lighting Company W.L.L.• Aamal For Maritime Transportation Services W.L.L.

Managed services: The segment involves provision of housekeeping and cleaning services, facilities management services, energy services, call centre services, building maintenance and acting as travel agents. The segment includes the following entities:

• Aamal Service Branch • Aamal Travels Branch• Ecco Gulf Company W.L.L.• Johnson Controls Qatar W.L.L.

Head O�ce:It provides corporate services to the branches and subsidiaries of the Group.

The managing director of the Group monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating pro�t or loss of these segments. Transfer pricing between operating segments are on arm’s length basis in a manner similar to transactions with third parties.


79

Aam

al C

ompa

ny Q

.S.C

.N

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ATEM

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For t

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5

27 S

EGM

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(con

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afte

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com

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, is

pres

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follo

ws:

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he y

ear e

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31

Dec

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5Pr

oper

tyQ

R

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and

dist

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QR

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QR

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325,

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--

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268,

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147,

151,

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126,

393,

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135,

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796

--

--

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6

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282,

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--

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4

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er s

egm

ents

5,98

2,76

3 5

,137

,889

65

,223

,136

472

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-

(76,

816,

588)

(i)-

288,

750,

476

728

,805

,513

1

,134

,167

,251

64,

197,

962

-(7

6,81

6,58

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139,

104,

614

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ratin

g re

sults

223

,323

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1

14,8

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56

51,

683,

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74

(49,

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918)

-

348

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valu

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ins

251

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-

-

-

-

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2

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oss)

for t

he y

ear

475

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1

14,8

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56

51,

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989

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74

(49,

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918)

-

600

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reci

atio

n 1

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4

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7,37

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1

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-

4

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5

Not

e:i.

Inte

r-se

gmen

t rev

enue

s ar

e el

imin

ated

on

cons

olid

atio

n.

80


Aam

al C

ompa

ny Q

.S.C

.N

OTE

S TO

TH

E CO

NSO

LID

ATED

FIN

AN

CIA

L ST

ATEM

ENTS

For t

he y

ear e

nded

31

Dec

embe

r 201

5

27 S

EGM

ENT

INFO

RMAT

ION

(con

tinu

ed)

Ass

ets

and

liabi

litie

s:

At 3

1 D

ecem

ber 2

015

Prop

erty

QR

Trad

ing

and

dist

ribu

tion

QR

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stri

al m

anu-

fact

urin

gQ

R

Man

aged

se

rvic

esQ

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d O

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QR

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inat

ions

QR

Tota

lQ

R

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ent a

sset

s41

3,94

6,44

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168

9,29

2,76

462

,013

,098

195,

484,

422

(211

,545

,623

) (i)1,

772,

525,

135

Non

-cur

rent

ass

ets

6,85

1,11

6,94

416

,864

,154

778,

791,

683

4,07

1,82

216

,483

,743

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97,3

53) (i)

7,66

5,13

0,99

3

Tota

l ass

ets

7,26

5,06

3,38

764

0,19

8,18

51,

468,

084,

447

66,0

84,9

2021

1,96

8,16

5(2

13,7

42,9

76)

9,43

7,65

6,12

8

Curr

ent l

iabi

litie

s28

2,31

8,10

917

6,03

8,29

562

8,83

6,69

417

,100

,117

614,

346,

955

(211

,543

,623

) (i)1,

507,

096,

547

Non

-cur

rent

liab

ilitie

s 36

,116

,379

8,95

0,21

315

4,92

8,91

83,

750,

560

2,19

5,01

6-

205,

941,

086

Tota

l lia

bilit

ies

318,

434,

488

184,

988,

508

783,

765,

612

20,8

50,6

7761

6,54

1,97

1(2

11,5

43,6

23)

1,71

3,03

7,63

3

Capi

tal e

xpen

ditu

re (i

i)27

,854

,659

6,59

4,07

679

,341

,775

1,19

6,39

092

,793

-11

5,07

9,69

3

At 3

1 D

ecem

ber 2

014

Prop

erty

QR

Trad

ing

and

dist

ribu

tion

QR

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rvic

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d O

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QR

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inat

ions

QR

Tota

lQ

R

Curr

ent a

sset

s39

0,91

8,92

249

7,69

1,38

160

9,46

1,17

956

,053

,682

381,

327,

953

(264

,734

,622

) (i)1,

670,

718,

495

Non

-cur

rent

ass

ets

6,68

9,12

0,24

514

,711

,495

680,

473,

181

4,67

4,23

67,

593,

353

(2,2

72,2

27) (i)

7,39

4,30

0,28

3

Tota

l ass

ets

7,08

0,03

9,16

751

2,40

2,87

61,

289,

934,

360

60,7

27,9

1838

8,92

1,30

6(2

67,0

06,8

49)

9,06

5,01

8,77

8

Curr

ent l

iabi

litie

s31

8,60

7,74

715

3,05

5,09

262

1,53

4,73

716

,444

,125

281,

099,

087

(264

,732

,630

) (i)1,

126,

008,

158

Non

-cur

rent

liab

ilitie

s 13

0,82

6,81

58,

215,

884

110,

401,

603

3,47

1,61

01,

793,

556

-25

4,70

9,46

8

Tota

l lia

bilit

ies

449,

434,

562

161,

270,

976

731,

936,

340

19,9

15,7

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2,89

2,64

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1,38

0,71

7,62

6

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ditu

re (ii

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,066

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6,88

0,15

557

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,174

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6,49

318

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,369

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es:

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ter-

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alan

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are

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lant

and

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nd in

vest

men

t pro

pert

ies.


81


28 FINANCIAL RISK MANAGEMENT

Objectives and policiesThe Group’s principal �nancial liabilities comprise interest bearing loans and borrowings, bank overdrafts, amounts due to related parties and trade accounts payable. The main purpose of these �nancial liabilities is to raise �nance for the Group’s op-erations. The Group has various �nancial assets such as trade accounts and other receivable, amounts due from related parties and bank balances which arise directly from its operations.

The main risks arising from the Group’s �nancial instruments are market risk, credit risk and liquidity risk. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

Market riskMarket risk is the risk that changes in market prices, such as interest rates and foreign currency exchange rates will a�ect the Group’s pro�t, equity or value of its holding of �nancial instruments. The objective of market risk management is to manage and control the market risk exposure within acceptable parameters, while optimising return.

Interest rate riskThe Group’s �nancial assets and liabilities that are subject to interest rate risk comprise bank deposits, interest bearing loans and borrowings and bank overdrafts. At the reporting date, the interest rate pro�le of the Group’s interest bearing �nancial instruments was as follows:

2015QR

2014QR

Fixed interest rate instruments:

Financial assets - -

Financial liabilities (142,029,684) (94,683,417)

(142,029,684) (94,683,417)

Floating interest rate instruments:

Financial assets 331,499,622 376,877,117

Financial liabilities (866,418,000) (942,012,968)

(534,918,378) (565,135,851)

The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s �nancial assets and liabilities with �oating interest rates.

The following table demonstrates the sensitivity of the consolidated statement of income to reasonably possible changes in interest rates by 25 basis points, with all other variables held constant. The sensitivity of the consolidated statement of income is the e�ect of the assumed changes in interest rates for one year, based on the �oating rate �nancial assets and �nancial liabilities held at 31 December. The e�ect of decreases in interest rates is expected to be equal and opposite to the e�ect of the increases shown.

Changes in basis points

E�ect on pro�t QR

2015Floating interest rate instruments +25 b.p. (1,337,296)

2014

Floating interest rate instruments +25 b.p. (1,412,840)

82



28 FINANCIAL RISK MANAGEMENT (continued) Foreign currency riskForeign currency risk is the risk that the value of the �nancial instruments will �uctuate due to changes in foreign exchange rates.

Trade accounts payable and accrued expenses include amounts due in foreign currencies, mainly US Dollars, UAE Dirhams, Great Britain Pounds (GBP) and Euros, of which the Group has a currency risk primarily on the balances payable in Euros and GBP amounting to QR 49,557,381 (2014: QR 52,640,528).

The Group does not hedge its foreign currency exposure. As both Qatari Riyal and UAE Dirhams are pegged to the US Dollar, balances in US Dollars and UAE Dirhams are not considered to represent signi�cant currency risk to the Group.

The table below indicates the Group’s foreign currency exposure on its monetary assets and liabilities. The analysis calculates the e�ect of a reasonably possible movement of the QR currency rate against the Euro and GBP, with all other variables held constant, on the consolidated statement of income (due to the fair value of currency sensitive monetary assets and liabilities). The e�ect of decreases in foreign currency exchange rates is expected to be equal and opposite to the e�ect of the increases shown.

Increase in foreign currency rate to the

QR

E�ecton pro�t

QR

2015 +5% (2,477,869)

2014 +5% (2,632,026)

Credit riskCredit risk is the risk that one party to a �nancial instrument will fail to discharge an obligation and cause the other party to incur a �nancial loss. The Group’s exposure to credit risk is indicated by the carrying amount of its �nancial assets, which consist principally of trade accounts receivable, retention receivable, amounts due from related parties, other receivables and bank balances.

The Group sells its products and provides services to various parties. It is the Group’s policy that all customers who wish to obtain on credit terms are subject to credit veri�cation procedures to ensure credit worthiness. Each new customer is analysed individually for creditworthiness before the delivery of products or services. Customers that fail to meet the creditworthiness may transact with the Group only on prepayment basis. Property rentals are mostly received in advance or contracted with post dated cheques. In addition, receivable balances are monitored on an ongoing basis and the purchase limits are estab-lished for each credit customer, which are reviewed regularly based on the level of past transactions and settlement. The Group’s maximum exposure with regard to trade accounts receivable, net of allowance re�ected at the reporting date, was as follows:

2015 2014

Business segment: QR QR

Property 21,327,881 14,083,250

Trading and distribution 261,420,649 240,890,368

Industrial manufacturing 305,318,370 129,982,358

Managed services 22,308,287 23,224,715

610,375,187 408,180,691


83


28 FINANCIAL RISK MANAGEMENT (continued)

Credit risk (continued)With respect to credit risk arising from the other �nancial assets of the Group, the Group’s exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments as follows:

2015 2014

QR QR

Bank balances 642,210,740 554,659,257

Amounts due from related parties 112,907,906 318,597,869

Retention and other receivables 113,115,776 54,775,995

868,234,422 928,033,121

The group reduces the exposure of credit risk arising from other �nancial assets by maintaining bank accounts in reputed banks and providing services only to creditworthy related parties.

The management considers the bank balances and amounts due from related parties as high grade �nancial assets and trade accounts receivable and other receivables as standard grade �nancial assets. When a �nancial asset is identi�ed to be im-paired, the management downgrades such assets to impaired category and provides adequate allowances.

Liquidity riskLiquidity risk is the risk that the Group will not be able to meet its �nancial obligations as they fall due. The Group’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have su�cient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation and is to maintain a balance between continuity of funding and �exibility through the use of bank overdrafts and bank loans and borrowings.

The Group monitors its risk to a shortage of funds using a recurring liquidity planning tool. This tool considers the maturity of �nancial assets (e.g. accounts receivable) and projected cash �ows from operations. The Group’s terms of sales or services require amounts to be paid within 30-90 days from the invoiced date.

84


Aam

al C

ompa

ny Q

.S.C

.N

OTE

S TO

TH

E CO

NSO

LID

ATED

FIN

AN

CIA

L ST

ATEM

ENTS

For t

he y

ear e

nded

31

Dec

embe

r 201

5

28 F

INA

NCI

AL

RISK

MA

NA

GEM

ENT

(con

tinu

ed)

Liqu

idit

y ri

sk (c

onti

nued

)

The

tabl

e be

low

sum

mar

ises

the

mat

urity

pro

�le

of th

e G

roup

’s �n

anci

al li

abili

ties

at 3

1 D

ecem

ber b

ased

on

cont

ract

ual u

ndis

coun

ted

paym

ents

.

On

dem

and

QR

Less

than

3

mon

ths

QR

3 to

12

mon

ths

QR

1 to

5 y

ears

QR

> 5

year

sQ

RTo

tal

QR

2015

Inte

rest

bea

ring

loan

s an

d bo

rrow

ings

-37

3,02

7,78

637

0,17

5,81

118

4,38

6,14

66,

355,

957

933,

945,

700

Bank

ove

rdra

fts

1,30

2,16

7-

--

-1,

302,

167

Trad

e ac

coun

ts p

ayab

le8,

786,

465

164,

792,

521

22,4

80,7

92-

-19

6,05

9,77

8O

ther

pay

able

s-

2,05

8,32

787

,922

,422

--

89,9

80,7

49A

mou

nts

due

to re

late

d pa

rtie

s-

32,9

73,3

3032

6,56

6,93

4-

-

359,

540,

264

10,0

88,6

3257

2,85

1,96

480

7,14

5,95

918

4,38

6,14

66,

355,

957

1,58

0,82

8,65

8

On

dem

and

QR

Less

than

3

mon

ths

QR

3 to

12

mon

ths

QR

1 to

5 y

ears

QR

> 5

year

sQ

RTo

tal

QR

2014

Inte

rest

bea

ring

loan

s an

d bo

rrow

ings

-37

3,02

7,78

629

7,21

5,20

924

5,39

5,30

86,

355,

957

921,

994,

260

Bank

ove

rdra

fts

2,34

6,32

0-

--

-2,

346,

320

Trad

e ac

coun

ts p

ayab

le-

128,

496,

709

27,6

22,2

2110

0,92

2,62

6-

257,

041,

556

Oth

er p

ayab

les

-74

,982

,626

5,03

4,74

32,

860,

385

-82

,877

,754

Am

ount

s du

e to

rela

ted

part

ies

-25

,862

,892

11,7

84,3

5675

7,82

5-

38,4

05,0

73

2,34

6,32

060

2,37

0,01

334

1,65

6,52

934

9,93

6,14

46,

355,

957

1,30

2,66

4,96

3


85


28 FINANCIAL RISK MANAGEMENT (continued)

Capital managementThe Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market con�dence and to sustain future development of the business. The Board of Directors monitors the capital, which the Group de�nes as total shareholders’ equity, excluding non-controlling interests and the level of dividends to ordinary shareholders.

The Board also seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security a�orded by a sound capital position. The Group’s target is to achieve a return on shareholders’ equity (excluding non-controlling interests) greater than the weighted average interest expense on interest bearing loans and borrowings.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic and business conditions and shareholders’ expectation. No changes were made in the objectives, policies or processes during the years ended 31 De-cember 2015 and 31 December 2014.

The Group monitors the capital using a gearing ratio, which is debt divided by capital plus debt. The Group’s policy is to keep the gearing ratio below 40%. The Group includes within debt, interest bearing loans and borrowings, less cash and cash equiv-alents. Capital includes equity attributable to the equity holders of the parent.

2015 2014

QR QR

Interest bearing loans and borrowings 932,239,869 904,381,281

Less: Cash and cash equivalents (640,908,573) (552,312,937)

Net debt 291,331,296 352,068,344

Total capital 7,449,398,652 7,464,775,936

Capital and net debt 7,740,729,948 7,816,844,280

Gearing ratio 3.8% 4.5%

29 FAIR VALUES OF FINANCIAL INSTRUMENTS

Financial instruments comprise �nancial assets and �nancial liabilities.

Financial assets consist of bank balances, short term bank deposits, amounts due from related parties, retention and other re-ceivables and trade accounts receivable. Financial liabilities consist of bank overdrafts, interest bearing loans and borrowings, amounts due to related parties and trade accounts payable.

The fair values of these �nancial instruments except for interest bearing loans and borrowings approximate their carrying val-ues due to the short term maturities of these instruments.

The fair value of interest bearing loans and borrowings are estimated based on discounted cash �ows using interest rate cur-rently available for the debt or similar terms and remaining maturities.

86



30 SIGNIFICANT ASSUMPTIONS, ACCOUNTING JUDGEMENTS AND ESTIMATES

Impairment of accounts receivableAn estimate of the collectible amount of trade accounts receivable is made when collection of the full amount is no longer probable. For individually signi�cant amounts, this estimation is performed on an individual basis. Amounts which are not individually signi�cant, but which are past due, are assessed collectively and an allowance applied according to the length of time past due, based on historical recovery rates.

Impairment of inventoriesInventories are held at the lower of cost and net realisable value. When inventories become old or obsolete, an estimate is made of their net realisable value. For individually signi�cant amounts this estimation is performed on an individual basis. Amounts which are not individually signi�cant, but which are old or obsolete, are assessed collectively and a provision is ap-plied according to the inventory type and the degree of ageing or obsolescence, based on anticipated selling prices.

Impairment of goodwillGoodwill embedded in the cost of acquisition of subsidiaries and equity-accounted investees are tested for impairment annu-ally. The calculations of value in use for cash generating units relating to real estate projects are most sensitive to the following assumptions:

Gross margin: Gross margins are based on average values achieved in the period preceding the start of the budget period. These are increased over the budget period for anticipated e�ciency improvements.

Discount rates: Discount rates represent the current market assessment of the risks speci�c to each cash generating unit, re-garding the time value of money and individual risks of the underlying assets which have not been incorporated in the cash �ow estimates. The discount rate calculation is based on the speci�c circumstances of the Group and its operating segments and derived from its weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the Group’s investors. The cost of debt is based on the borrow-ings the Group is obliged to service. Segment-speci�c risk is incorporated by applying individual beta factors. The beta factors are evaluated annually based on publicly available marked data.

Fair value of investment propertiesThe fair value of investment properties is determined by external, independent property valuers, having appropriate rec-ognised professional quali�cations and recent experience in the location and category of the property being valued.

Useful lives of property, plant and equipmentThe Group’s management determines the estimated useful lives of its property, plant and equipment for calculating depre-ciation. This estimate is determined after considering the expected usage of the asset, physical wear and tear, technical or commercial obsolescence.

Going concernThe Group’s management has made an assessment of the Group’s ability to continue as a going concern and is satis�ed that the Group has the resources to continue in business for the foreseeable future. Furthermore, the management is not aware of any material uncertainties that may cast signi�cant doubt upon the Group’s ability to continue as a going concern. Therefore, the consolidated �nancial statements continue to be prepared on a going concern basis.

31 INCOME TAX

Certain subsidiaries of the Group, which have non-GCC ownership, are subject to income tax under Qatar Income Tax Law No. 21 of 2009. The income tax is charged on the share of pro�ts attributable to non-GCC shareholders. For the purpose of these consolidated �nancial statements, the income tax liability of the foreign shareholders has been excluded, given that the non-GCC shareholders have agreed, under the shareholder agreements signed with the Group, to bear the full liability and make necessary payments.

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