Annual Report 2019 Aamal Company Q.P.S.C. Through Through Strength Strength Diversity

Aamal Company Q.P.S.C. Annual Report 2019 In the Name of Allah Most Gracious Most Merciful His Highness Sheikh Tamim Bin Hamad Al Thani Emir of the State of Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Overview 2 Highlights of the Year 4 At a Glance Aamal Company is one of the 6 Our Assets 8 Our Story region’s largest and most diversified 10 Investment Rationale companies, offering investors a Strategic Report 14 Chairman’s Statement high quality and balanced exposure 16 Market Review 20 Business Strategy 22 CEO and Managing Director’s Report to Qatar’s economic growth and 24 Executive Management development. 26 Operational Review Corporate Governance 54 Board of Directors 56 Corporate Governance 64 Board of Directors report on Corporate Governance 65 Independent Assurance Report on Compliance with QFMA Laws and relevant legislations 67 Board of Directors Report on Internal Controls over Financial Reporting 69 Independent Assurance Report on Internal Controls over Financial Reporting

Aamal’s Four Segments Corporate Responsibility 74 Corporate and Social Responsibility (CSR) report 76 Aamal Sustainability Framework and ESG Disclosures

Financial Statements 86 Independent Auditor’s Report 90 Financial Statements and Notes Industrial Manufacturing Trading and Distribution

Read more in the Read more in the Operational Review on page 26 Operational Review on page 36

Property Managed Services

Read more in the Read more in the Operational Review on page 42 Operational Review on page 46

This report refers to Aamal Company Q.P.S.C. (herein after referred to as “The Company”.)

1 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Highlights of the year

Generating revenues of QAR 1,294.1m, Aamal Company’s Strength Through diversified business model reflects resilience during Diversity economic slowdown. Financial Highlights

Three Year Financial Summary: Revenue (QARm) 2019 Segmental Breakdown: Revenue (%)

Industrial Manufacturing Managed Services (4.8%) 2019 1,294.1 (12.8%)

Property (21.9%)

2018 1,286.6

2017 1,604.2 Trading and Distribution (60.5%)

2019 Segmental Breakdown: Net Profit (%) Three Year Financial Summary: Net Profit (QARm)

Managed Services (1.5%) Industrial Manufacturing (13.8%) 2019 322.1

Non-Financial Highlights Trading and 2018 447.6 Distribution (25.9%) Operations Awards

• Renovation works at City Center progressed and now • Aamal Investor Relations website, was ranked 3rd place: Best Website Category - Qatar Stock Exchange 2019 Investor Property (58.8%) in final stages. 2017 523.1 Relations Excellence Programme. • Aamal Readymix awarded iconic projects for development of Lusail Boulevard and Doha Port. • Aamal Services has been awarded “The Best Supplier 2019”, by Qatar Rail. • Successful automation of Ebn Sina Medical’s warehouse. Equity Attributable to Share Holders (QARm) Shareholders Structure • Aamal Medical now a holistic supplier to the Ambulance Corporate Governance and Emergency Medical Services. • Governance strengthened • Aamal Real Estate completed renovation of 40 properties. –– Internal Controls over Financial Reporting (ICoFR) 2019 7,943.6 framework successfully established Corporate (20%) • Aamal Real Estate successfully secured major corporate rental –– Whistleblowing mechanism launched clients taking occupancy levels well above 90% –– Employee Code of Conduct established • Doha Cables expanded its exports activity to Philippines. Al Faisal –– New appointments to the Board and Management team 2018 8,007.4 Holding (45%) • Ebn Sina Robot Pharmacy opened at City Center Doha with Individual (10%) a third branch opened at Musheireb Railway Station.

2017 8,006.9

Sheikh Faisal Bin Qassim Al Thani (25%)

2 Aamal Company Q.P.S.C. Annual Report 2019 3 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

At a Glance

Aamal company offers investors a high quality and balanced exposure to Vision Mission Values Qatar’s growth and development. Our corporate strategy has always been To be recognised as a leader To deliver maximum growth Applying excellence to all our to create and enhance long-term shareholder value through profitable growth and innovator within the at minimum risk, through a activities by committing to the and diversification, with particular reference to: industry sectors we operate diversified structure, offering highest standards in governance, in; excelling in service delivery high quality exposure to the investment in human capital and professionalism to meet Qatar growth story. development, and encourage • Focus: Increasing focus on industrial manufacturing and • Being alert and responsive to the markets’ evolving needs. and exceed the expectations entrepreneurial spirit. high-growth sectors. • Geographical focus on Qatar at present with intentions to • Diversification & Innovation: continued growth, expand further in the region. of all stakeholders. diversification and innovation across existing businesses to • Acting as a socially responsible member of society, adopting enhance market positions and optimize performance. ethical and sustainable policies geared towards protecting • Operational Excellence: continue application of clear and the environment and looking after the welfare of our disciplined operational and financial principles underlying our employees. strategic growth initiatives. • Uniquely positioned to benefit from increased private and • Operations across 26 active business units with market public sector demand, particularly for infrastructure Number of Operations Total Major leading positions in key growth sectors including industrial development, as Qatar transforms into an advanced and employees (business units) Equity Shareholder manufacturing, real estate, managed services, and the self-sustaining economy. medical equipment and pharmaceutical sectors. • Strong backing from Al Faisal Holding Company, a long-term 2,300 26 QAR 8.0Bn Al Faisal Holding • Offering high quality products and services. major shareholder of Aamal.

Functional Chart Business units with effective Aamal ownership (%)

Aamal for Maritime Aamal Cement Transportation Services Ebn Sina Aamal Services Industries 74.7% 99% Aamal Medical Medical 100% Gulf Rocks 100% 100% Aamal Travel 74.5 % City Center Doha Aamal Real Estate and Tourism ECCO Gulf* Aamal Readymix Ebn Sina Health 100% 100% 100% 51% 100% Ci-San Trading Aamal Trading Care Pharmacy 50% and Distribution Solutions 100% 100%

Industrial Trading and Managed Property Manufacturing Distribution Services

Senyar Industries Qatar Holding* Al Farazdaq Family Frijns Structural 50% Aamal Car Foot Care Steel Middle East* Maintenance Centre Company Entertainment 20% El Sewedy Cables 100% 100% 65% Center Advanced Pipes Qatar* Legend for Winter 100% Aamal – ECE* and Casts 38.3% Trading and Wonderland 51% Company* Distribution 100% Doha Cables* 50% 100% 47.3%

Read more in the Operational Review on page 26 Read more in the Operational Review on page 36 Read more in the Operational Review on page 46 Read more in the Operational Review on page 42

* Equity accounted for investment in Associates and Joint Ventures

4 Aamal Company Q.P.S.C. Annual Report 2019 5 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Our Assets

Industrial Manufacturing 20

1 Aamal Readymix Aamal Readymix Facility. Aamal Readymix Manateq Industrial Zone in Mazroua – Bu-Qalila site.

2 Aamal Cement Industries Aamal Cement Industries, Industrial Area Facility. Managed Services 3 Advanced Pipes and

ADVANCED PIPES & CASTS CO. Casts Company APC Factory, Al Wakra Municipality. 14 Aamal Services Aamal Services Offices – New Al Hitmi 4 Frijns Structural Steel Middle East 15 Al Farazdaq FRIJNS Structural Steel ME W.L.L., Al Farazdaq Company – City Center Mesaieed Road, . Shopping Mall

5 Doha Cables 16 ECCO Gulf Doha Cables, Mesaieed Facility, ECCO Gulf Offices – Aamal Tower, Barwa Avenue Showroom. 21

6 Gulf Rocks 17 Aamal Travel Gulf Rocks Mesaieed Facility. Aamal Travel – City Center Shopping Mall 7 Aamal for Maritime 1 Transportation Services 18 Winter Wonderland AMTS Mesaieed – Hamad Sea Port Winter Wonderland – City Center Shopping Mall

19 Fun City/Family Trading and Entertainment Center Family Entertainment Center – City Distribution 15 Center Shopping Mall 17 12 18 8 Foot Care Center 26 8 16 19 8 Foot Care Center – Medina Centrale, Pearl 22 12 9 10 13 Foot Care Center – Al Gharrafa 24 10 12 14 23 9 Aamal Medical Aamal Medical Offices – Aamal Tower, 1 National assets West Bay 11 10 2 11 12 20 Ruwais Port 10 Ebn Sina Medical Hamad Port – Mesaieed Area Warehouse – Industrial Area Pharmacy – Branch 21 Sidra Hospital Pharmacy – City Center Branch Sidra Hospital – Al Gharrafa Pharmacy – Musheireb Branch 3 25 22 Qatar Foundation 11 Aamal Trading and 4 26 Qatar Foundation Head Quarters – Distribution Education City, Al Huqoul St ATD Salwa Road Showroom ATD Industrial Area Pit Stop Services 5 23 Qatar Stock Exchange 6 7 QSE – West Bay 24 Hamad Medical City – Al Rumailah East

Property QATAR 25 Hamad Port Hamad Port – Mesaieed Area

12 Aamal Real Estate 26 Manateq (Economic Free Zones) Souk Haraj Manateq Head Quarters – Al Massila The Gate Mall Madinat Khalifa Manateq Ras Bofantas Office – Al Markhiyeh Al Wakra Municipality Bin Mahmoud Al Nasr

13 City Centre City Center Shopping Mall – West Bay

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Our Story A History of Excellence 1993

Development of Souq Haraj Najma, which now forms a part of Aamal Real Estate. 2010 2007 Advanced Pipes and Casts Company is founded. 2019 1964 1998 Aamal Company Q.P.S.C. Aamal Cement Industries commences commercial Aamal Company Q.P.S.C. implements a listed on the Qatar Stock production. 10 for 1 stock split, in full compliance with Sheikh Faisal Bin Qassim Al Thani founds Real Services Qatar is founded, Exchange, with a market the stock split directive issued by the “Gettco” a small trading company providing which now operates as Aamal 2001 capitalisation of QAR 3.0bn. ECCO Gulf, a joint venture with ECCO Outsourcing, Qatar Financial Market Authority (QFMA). the initial platform for expansion across key Services. The listing of another commences trading. markets. Subsequently renamed Al Faisal Aamal Company successful family-owned Sheikh Mohamed Bin Faisal Al Thani Paid up share capital increases to QAR 4.5bn. Holding, the business has since grown rapidly, Another major milestone in is established as the business represents another appointed as Chief Executive Officer branching out into a number of sectors. Al Faisal Holding’s evolution is holding company for significant milestone in the of Aamal Company Q.P.S.C. reached with the development a select range of high Aamal Company acquires 49% of El Sewedy Cables development of Qatar’s Qatar, through Senyar Industries Qatar Holding. and opening of City Center quality operations economy. Doha, one of Qatar’s first malls across each of the 1969 and a powerful symbol of the main sectors of the Senyar Industries Qatar country’s economic success. Qatari economy Holding is established in Gettco Trading is and with the future partnership with El Sewedy 2016 founded, which would aim of independent Electric Group. later become Aamal Aamal company completes the listing on the Qatar acquisition of Family Entertainment 1964

Trading and Distribution. 2019 Exchange. Center and Winter Wonderland.

2000 1971 Gulf Rocks Company, which currently operates under Aamal’s subsidiary The company makes its first move Ci-San Trading, is established. into Qatar’s health sector through the establishment of Ebn Sina Medical. 2008 2015 Doha Cables begins commercial production as part of Senyar Industries Qatar Holding. Aamal for Maritime Transportation 1994 Services W.L.L. is established. Aamal paid up share capital increases to Gettco Readymix is created, QAR 3.795bn. Aamal Company partners with the which now operates as German Company ECE Projektmanagement Aamal Readymix. Frijns Steel Construction-Middle East, in which to launch Aamal – ECE to undertake Aamal has a 20% interest, is launched in shopping centers management. partnership with Frijns Industrial Group. Ci-San Trading is established in partnership 2018 1967 with Masraf Al Rayan. 2006 Aamal announces three industrial projects Gettco Travel is founded, through Senyar Industries Qatar Holding. which would later become Aamal Medical is formed as a separate Aamal Travel. entity from Ebn Sina Medical.

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Investment Rationale

1. Operating in an attractive growing market Why invest in • Qatar is one of the world’s fastest growing and most –– Industrial development is an integral part of the successful economies Government’s plan to diversify the economy • Aamal has strong market positions in key high-growth –– QAR 90 billion has been earmarked for new Aamal Company? sectors projects, particularly in infrastructure – Aamal is very well positioned to capitalise on this • Significant growth opportunities as a result of: –– Government investment in downstream industries –– The Qatar National Vision 2030 related to oil and gas –– Qatar’s award of the 2022 FIFA World Cup

2. Strength through diversity

• Diversified for balanced exposure across the Qatari • Market leading positions in key growth sectors: economy –– Industrial Manufacturing • Operations across 26 active business units –– Real Estate • Each subsidiary managed as a standalone entity, –– Medical equipment and pharmaceuticals optimizing management’s operational focus and transparency –– Managed Services

3. Financial strength

• Strongly capitalised (QAR 8.0bn of shareholders’ • Strong, long-term supportive backing from Al Faisal funds, end of 2019) Holding Company and Sheikh Faisal Bin Qassim Al Thani, Aamal’s major shareholders • Low financial gearing • One of the highest dividend yield amongst QSE listed • Net cash position, low corporate indebtedness companies • Readily available access to debt capital markets, which in addition to strong cash flow generation, provides significant scope for future growth in terms of financing

4. Experienced, proven senior management team

• Proven capital allocation track record driving profit • Proven track record of successfully partnering with growth and value creation through a clear focus on leading international companies to build incremental returns on capital and capital discipline revenue streams by meeting growing domestic demand in new markets and sectors –– Highly effective corporate decision-making with short lines of communication with operational –– Talented and motivated managers with significant management – evidenced by Aamal’s agility in experience and strong customer relationships in establishing alternative supply chains in the face their respective areas of the blockade on Qatar

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14 Chairman’s Statement Strategic 16 Market Review 20 Business Strategy 22 CEO and Managing Director’s Report Report 24 Executive Management 26 Operational Review

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Chairman’s Statement

The diversity of Aamal’s business model undoubtedly Without doubt, Aamal would not be able to deliver the On behalf of myself and the Board provided great resilience in 2019. It is this diverse business diverse range of high quality products and services we platform that enables the Company to play an important provide without the dedication, passion and skill of our of Directors, I am pleased to present part in Qatar’s growing private sector and contribute to entire staff. On behalf of the Board, I would like to extend the growth of the country’s economy. my gratitude to our management teams and to all Aamal Company’s 2019 Annual Report. employees who have worked so hard to steer the business 2019 marked a year of significant development in terms of through this challenging environment. Although 2019 saw significant market how we embed environmental, social and governance considerations in the way we do business to achieve For Aamal, the outlook for the year ahead is mixed. A headwinds in the construction industry, sustainable growth. Most notably from a governance prolonged outbreak of COVID-19 is expected to have a Aamal responded positively in this very perspective, we developed a governance code to ensure negative impact on the Group’s financial results for 2020 challenging environment, growing revenue Aamal is aligned with the highest levels of corporate however, Aamal’s diverse business model continues to by 1% and delivering a net profit to Aamal’s standards and policies, implemented a code of conduct provide resilience in these challenging times and we are equity holders of QAR 322 million. policy and a whistleblowing mechanism for all employees, confident that our strategy remains appropriate for ensuring they are able to act if they encounter any potential long-term sustainable growth. It is against this backdrop that the Board breaches of our standards. Furthermore, in 2019 we recommends a cash dividend of QAR 0.04 successfully completed the design and testing of an Internal While the COVID-19 pandemic is having an unprecedented a share, subject to approval at the Annual Control Over Financial Reporting (ICOFR) framework and impact on global financial markets, the long-term General Assembly Meeting on 1 April 2020. received a clean audit opinion from our auditors, PwC. economic outlook is encouraging and we expect Aamal to leverage the opportunities generated by the Qatar The Board was delighted to welcome Sheikh Faisal Bin Fahed National Vision 2030, supported by the wise vision of our Al Thani as an Independent Director who brings more than Government under the leadership of HH Sheikh Tamim Bin 30 years’ experience from working in several international Hamad Al Thani, The Emir of Qatar. Our corporate strategy companies in the oil and gas industry as well as experience remains clear and consistent as we continue to focus on as a main board Director of a number of significant Qatari generating shareholder value through profitable growth listed companies. Further strengthening our executive and diversification. management capability, the Board approved the appointments of Sheikh Mohamed Bin Faisal Al Thani as Chief Executive Officer and Managing Director, Faisal Bin Qassim Al Thani Mr. Mohamed Ramahi as Advisor to the CEO, and Chairman Mr. Imran Chughtai as Chief Finance Officer.

I am also delighted to see the progress made by our Trading and Distribution segment, which achieved robust top line growth in the year, despite a challenging market. I am confident that we can transform the challenges the Company faces into opportunities as we continue to build our business across all segments. We enjoy a strong market position in all the areas we operate in, supported by a solid financial position and highly capable people across the business.

14 Aamal Company Q.P.S.C. Annual Report 2019 15 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Market Review

Highlights A Clear Framework for the Economic Development The Qatari Investments in the Non-Hydrocarbon Sectors of Qatar 2017 – 2019 • Increased government focus on the non-hydrocarbon • The construction industry will continue to expand The ‘Qatar National Vision 2030, with a series of distinct sector, execution of Qatar’s public investment program and their sectors in the run up to FIFA 2022 event. initiatives, priority sectors and enablers to support its and the public-private partnership (PPP), the benefits This is a result of projects worth QAR 90 billion implementation, guide capital expenditure and encourage of which are already emerging. involving road, electricity, sewage networks and mega private investment into several sectors. projects such as the expansion of Hamad International • Non-hydrocarbon activity accounts for more than half Oil and gas revenue reserves have spurred a boom in (1) Airport and the expansion of Hamad Sea Port. of Qatar’s GDP since 2014 . infrastructure and transport projects, many of which are Tourism Food Security • The Government has taken proactive steps to • Qatar plans to invest QAR 210 billion in 2020, 1.8% more nearing completion, while significant advancements have encourage both private and foreign investment, than in 2019. been made in healthcare, education and tourism. such as the single window system, free trade zones • Qatar’s Nominal GDP is forecast to grow to Non-Hydrocarbon with tax and duty incentives, improved procedures A combination of favourable movements in global oil prices in Sectors QAR 774.4 billion in 2020, up from QAR 695.4 billion for obtaining visas, and amending government policy 2019 compared to Qatar`s Budgeted oil price of QAR 200/Barrel, estimated for 2019. surrounding international investment to allow 100% strong export from non-hydrocarbon industries and an Logistics Manufacturing foreign ownership. • In 2020, inflation and real GDP growth are forecast improvement in fiscal balance have buoyed the Qatari economy. to be 2.4% and 3.2%, respectively. Qatar’s withdrawal from the Organization of the Petroleum Exporting Countries (‘OPEC’) has allowed the country to expand (1) According to a report recently published by the Ministry of Finance. oil and gas production capacities and enabled greater flexibility in the context of fuel prices.

Education Construction Qatar’s impressive journey of economic development over the past decades has of course been hydrocarbon-led and, with substantial reserves, the country will continue to increase Health liquefied natural gas (‘LNG’) production over the next decade.

Strong macroeconomic fundamentals

Qatar’s economy is forecasted to grow consistently whilst having well controlled government finances.

60.4% 60.7% 59.7% 59.1% 59.1% 59.7% 59.6% 59.2% 58.7% 56.9% 58.2% 49.8% 48.6% 480.3 442.1 407.2 374.6 344.9 316.8 289.6 262.5 236.4 212.7 191.4 191.0 166.9

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Government Debt (as % of Total GDP) Nominal GDP (Bn USD)

Strong and consistent Real GDP growth with low levels of inflation.

3.6% 3.6% 3.6% 3.6% 3.6% 3.6% 3.2% 3.5% 2.5% 2.3%

2.3% 2.4% 2.4% 2.2% 2.1% 2.0% 2.0% 2.0% 2.0% 0.0% 1.1%

-0.6% 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Real GDP YoY % Inflation YoY %

Source – Oxford Business Group

16 Aamal Company Q.P.S.C. Annual Report 2019 17 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Market Review continued

How we respond to these trends As set out in our Strategy (p.20), Aamal seeks to take advantage of the many opportunities provided by the Qatar National Vision 2030 and leverage its position as a leading participant across various key economic sectors.

Industrial Manufacturing Trading and Distribution Property Managed Services

• Beyond 2022, more than 150 large-scale projects • Within the framework of the Qatar National • Despite increasing competition amongst • Visitors to Qatar are expected to increase during are expected; focused on roads, hospitals Vision 2030, the second National Development shopping malls with several new malls recently the years leading up to FIFA 2022 World Cup and schools. Strategy aims to sustain economic prosperity opening, offering approximately 1.4 million sqm. tournament, with a peak of 1.7 million during the through infrastructure development, economic of retail space in Qatar. Aamal’s City Center Doha event. This will drive the demand for IT support • Continued growth of Qatar’s non-oil sectors diversification and private sector development. benefits from its strategic location and from the services, business process outsourcing and such as manufacturing. completion of major renovation works in 2020, other back-office services offered by ECCO Gulf. • Aamal’s Trading and Distribution activities, which will increase the leasable area of the mall. • Foreign investment is expected to rise following which incorporate significant pharmaceutical • The impetus given to the tourism sector by the Government’s revised policy permitting and medical devices and diagnostic distribution • Demand for quality living facilities and office the government, supported by simplified entry 100% foreign ownership. activities, stand to gain in particular from spaces in business districts, such as West Bay, visa policies with more than 80 countries, is significant investments being made in an and Lusail city, stabilized in 2019. expected to help the travel industry, especially integrated healthcare system. ticketing services. • In 2019, the Government launched Qatar Petroleum’s localisation programme, ‘Tawteen’, • The government is dedicated to modernizing and/ to raise the proportion of local firms in the • The division is expected to continue to benefit or replacing dilapidated buildings. These projects • Qatar plans to spend approximately QAR 22 country’s energy sector supply chain from 15% from Qatar’s high disposable incomes, strong will offer multiple opportunities in both the billion in the healthcare sector in 2020 and to 40% over the next 5 years. This is expected spending power and steady population growth. Industrial Manufacturing and Property segments. this is expected to increase demand for facility to create local manufacturing opportunities. management services, specifically, cleaning and • Furthermore, commodities necessary for • Asking rents for available housing units have waste management. • Further catalysts for industrial investment industrial infrastructure, food products dropped by between 5% and 12% between 2018 include the development of Hamad Sea Port, and personal belongings are exempt from and 2019 due to increased supply. In the long • Qatar is continuing to grow as a major meetings, Hamad Airport and expressways. customs duties. term, however, the housing market is expected to incentives, conferences and events (‘MICE’) improve, given Qatar’s rapid population growth destination in the region, raising the demand of around 8.8% per annum between 2000 to 2018. for various support services.

18 Aamal Company Q.P.S.C. Annual Report 2019 19 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Business Strategy

The Company seeks to take advantage of the growth opportunities Delivering enabled by the Qatar 2030 National Vision, and to leverage its position as a leading participant across various key economic sectors. Growth Aamal Company intends to achieve this by focusing on three clear pillars for profitable and sustainable growth:

1

An increased focus on industrial manufacturing and high-growth sectors to capitalise on significant 1 demand arising from wider industrialisation of the Sector Focus Qatari economy. Read more on page 16

2

2 Continued growth, diversification and innovation Strategic Diversification across existing businesses to strengthen market Pillars & Innovation positions and optimise performance. Read more on page 17

3

3 Disciplined application of clear operational and Operational financial principles which underpin our strategic Excellence growth initiatives. Read more on page 18

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CEO and Managing Director’s Report

Aamal’s performance in 2019 continued to be challenged by As highlighted by our Chairman, Sheikh Faisal bin Qassim Al Thani, one of Aamal’s top priorities in 2019 was to more changing market dynamics. Increased market competition and effectively embed environmental, social and governance considerations in the way we do business and enhance our customer ‘price sensitivity’ impacted business operations and ESG reporting. Although ESG reporting is not yet mandatory reduced profit margins across all four of Aamal’s business segments. in Qatar, Aamal Company is among the first listed companies to provide such disclosure, in accordance with our commitment to transparency as a critical driver of sustainable growth for Despite this backdrop, I am proud that Aamal remained competitive, delivered all our stakeholders. 0.6% revenue growth, won new contracts, introduced new products and services, The recent COVID-19 pandemic is having a significant impact on global markets. While the specific impact of the virus on Aamal and enhanced the performance of our real estate portfolio. remains unclear, each of our subsidiaries is closely monitoring developments and assessing the implications for their The performance of Aamal’s Industrial Manufacturing segment to increase customer loyalty and strengthen long-standing operations. The virus has the potential to disrupt supply chains reflects the combined effect of a slowdown in the Qatari relationships with partners. Meanwhile, Aamal Medical and operations as well as wider financial markets which could construction sector and increased competition in 2019. progressed its product-diversification strategy by partnering impact Aamal, That said, our priority is the health and safety of Despite these challenging conditions, we expect substantial with Olympus in the area of endoscopy and successfully our employees, supply chain partners and customers, we are improvement in 2020 as the government finalises infrastructure established a number of strategic partnerships, including with taking appropriate measures and abiding by the set rules and developments ahead of the 2022 FIFA world cup, which is already the Ambulance and Emergency Medical Services (EMS). These regulations of concerned authorities to ensure safety of Aamal being felt through a significant increase in new business partnerships position Aamal Medical as a holistic supplier for employees and external network. enquiries. The Industrial Manufacturing businesses successfully EMS and support the company’s objective to become a leading progressed several strategic investments from which we expect player in the field of ambulance vehicles. 2020 presents many Notwithstanding this, in 2020, we will gear Aamal towards to reap the benefits in 2020. Most notably, the expansion of opportunities for Aamal Medical, supported by a strong pipeline further growth and continue to improve efficiency and financial Doha Cables into new markets in Asia and the award of two of healthcare technology projects. control. Supported by a successful track record, solid financial iconic projects to Aamal Readymix, including a project related position and diverse business model, we are well placed to to the expansion of Doha Port. Aamal’s Property segment faced increased market competition remain resilient in these challenging times and capture new from new shopping mall openings, however, City Center Doha strategic investment opportunities that will add value and It was a year of mixed performance for the Trading and (‘CCD’) maintained its leading position. Renovation works at synergy to our diversified business model. Distribution segment which delivered strong top line growth CCD reached their final stages and, towards the end of the but a decline in net profit. This was the result of market year, renovation of the ground floor car park commenced. In Finally, I would like to take this opportunity to thank our competition and one-off challenges such as stock supply 2020, CCD expects to see new shop openings which will drive esteemed Board of Directors, respected partners, valued difficulties following technical issues at one of the company’s footfall through the mall and enhance the visitor experience. shareholders, management, staff and all other stakeholders suppliers, implementation of a stringent credit policy, which Furthermore, agreements have been signed to build two across the Aamal Group for their tremendous work, resulted in reduced sales to several large trade customers with pedestrian bridges, including one connecting the mall to the commitment and passion throughout 2019. overdue receivables and the liquidation of slow-moving and metro station, with construction scheduled to start in mid-2020. obsolete inventory impacted net profit. Mohamed Bin Faisal Al Thani The performance of the Managed Services segment was Chief Executive Officer and Managing Director Ebn Sina Medical also established several strategic partnerships impacted by the combined effect of increased competition with suppliers, enabling the company to diversify its product and the reclassification of ECCO Gulf from a subsidiary to a joint offering for generic, branded and biosimilar drugs. Ebn Sina venture following a review undertaken in accordance with our Medical completed the renovation of its pharmacy at City Internal Controls over Financial Reporting framework. In 2019, Center Doha, where the first ‘Robot’ pharmacy in Qatar was ECCO Gulf signed new contracts across a range of sectors and installed, and successfully upgraded its warehouse operations installed advanced systems to support the efficiency and quality during the year through the installation of automated systems of customer management. Meanwhile, Aamal Services also that enable it to store and dispense large volumes of drugs secured key contracts across a range of sectors and refocused accurately and efficiently. efforts on small to medium sized premium businesses which have an assiduous focus on quality. While Aamal Travel delivered Aamal Trading and Distribution continued to expand its a solid set of results in 2019, delivering a year-on-year growth in automotive product and service offerings through the launch net profit of 25%, Family Entertainment Center continued to feel of ‘Total Tyre Care’ and its ‘Dealer Loyalty Program’, which aim the effect of the renovation works at CCD.

22 Aamal Company Q.P.S.C. Annual Report 2019 23 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Executive Management

Sherif Baris Shehata Sezen Aamal Medical, City Center Doha Ebn Sina Medical, Ebn Sina Pharmacy, Foot Care Center

Parveez Keith Aslam Smith Aamal Ready Mix, Aamal Cement Aamal Maritime Industries for Transportation Services, Gulf Rocks

Ahmed Fathy Joseph Elsewedy Mc Mullan Senyar Industries Aamal Services Qatar Holding, El Sewedy Cables, Doha Cables Sheikh Mohamed Bin Faisal Al Thani CEO and Managing Director

Shambil Amr Gohar Basit Ecco Outsourcing Aamal Trading & Distribution

Mr. Nabil Shehada Chris Pakhanian Advanced Pipes Al Farazdaq & Casts Company

Mohammad Ramahi Imran Chughtai Advisor to the CEO Chief Financial Officer

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Operational Review – by Segment

Industrial In the Industrial Manufacturing segment, revenue was down 26.6% year-on-year to QAR 169 million and net profit declined by 48.2% Manufacturing year-on-year to QAR 53 million.

These numbers reflect the combined effect of The Industrial Manufacturing segment comprises Revenue (QARm) Net profit – fully consolidated activities (QARm) a slowdown in the Qatari construction sector the following operations: and increased competition which impacted all 1. Senyar Industries Qatar Holding W.L.L. 2019 169.1 2019 -1.5 companies in the segment. However, the outlook for the construction sector in 2020 is positive 2. Aamal Readymix W.L.L. based on a significant increase in enquiries related 6.9 3. Aamal Cement Industries 2018 230.5 2018 to infrastructure development and completions ahead of the FIFA 2022 World Cup. 4. Ci-San Trading W.L.L. Share of net profit of associates and joint ventures Net underlying profit margin (%) accounted for using the equity method (QARm) 5. Advanced Pipes and Casts Company W.L.L.

6. Frijns Structural Steel Middle East W.L.L. 2019 -0.9 2019 54.1

2018 3.0 2018 94.6

Total Net Profit (QARm)

2019 52.6

2018 101.5

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Operational Review – by Segment continued

Industrial Manufacturing continued

1. Senyar Industries Qatar Holding (‘Senyar’) 1. Senyar Industries Qatar Holding (‘Senyar’) Doha Cables

Senyar is a 50:50 joint venture between Aamal Doha Cables is the first and largest cables Company and El Sewedy Electric Company, a manufacturing facility in Qatar. The company leading producer of integrated cables and electrical specialises in the manufacture of power cables, products such as transformers, tools, and energy special cables, winding wires and cable accessories. and water measurement and management. In 2019, Doha Cables increased its production of High Voltage Senyar’s operations comprise: Cables, broadened its product range through the launch of new fire alarm cables, and successfully expanded its export activity • Doha Cables; to new markets in the Philippines and Hong Kong. Furthermore, to offset reduced local demand, Doha Cables opened a • El Sewedy Cables Qatar; dedicated showroom in Barwa City. • Senyar Drums Factory: A company specialized in manufacturing drums for cables, with planned production to Doha Cables will continue to target infrastructure projects start by Q3-2020; and related to energy and transportation services and will explore • Senyar Copper Factory: A company specialized in producing new markets in Asia and Eastern Europe. copper rods which is the main raw material for copper wires. Planned production to start in 2021.

28 Aamal Company Q.P.S.C. Annual Report 2019 29 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Operational Review – by Segment continued

Industrial Manufacturing continued

1. Senyar Industries Qatar Holding (‘Senyar’) 2. Aamal Readymix El Sewedy Cables Qatar

El Sewedy Cables Qatar specialises in the Aamal Readymix is one of the largest producers of distribution of electromechanical equipment, cables quality, ready-mixed concrete in Qatar, supplying of Doha Cables and third-party manufacturers as high strength concrete, high performance concrete, well as turn-key projects where design, testing and shotcrete, light weight concrete and sustainable commissioning are required by customers. green concrete with an annual production capacity of 600,000 cubic meters. In 2019, El Sewedy Cables completed the design, installation, testing and commissioning of the complex Interchange Although 2019 was a challenging year for Aamal Readymix, upgrade project. The company also completed the installation owing to increased competition and a slowdown in the of an underground cable line between Ras Abu Aboud Super construction sector, Aamal Readymix is encouraged by the and RAA-2, that began supplying electricity to Ras Abu Aboud outlook for 2020. In addition to several major projects being put Stadium, a venue of 2022 FIFA World Cup. out to tender which are expected to drive construction activity, Aamal Readymix has been awarded iconic projects for Lusail Boulevard and the expansion of Doha Port.

The supply of concrete for Lusail Boulevard and Doha Port projects will start in the first quarter of 2020. In order to fulfil the large production requirements of these projects, Aamal Readymix has leased an additional Readymix factory equipped with machinery, vehicle fleets and manpower. Due to market competition, margins are expected to remain subdued.

30 Aamal Company Q.P.S.C. Annual Report 2019 31 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Operational Review – by Segment continued

Industrial Manufacturing continued

3. Aamal Cement Industries (ACI) 4. Ci-San Trading

ACI is one of the largest producers of interlocking Further progress with highway safety concrete bollards and Ci-San Trading Company focuses on investments in various sectors such as industrial, real estate paving stones, concrete blocks, and tiles in the examination of GFRC (Glass Fiber Reinforced Concrete) and trading, in both local and international markets. Ci-San Trading owns two subsidiaries, Gulf Rocks urban street furniture for parks and recreational areas also Qatar, with an annual production capacity of remains ongoing. and Aamal for Maritime Services. approximately 25 million blocks or two million square metres of paving stones.

Despite 2019 being a challenging year due to a slowdown in the construction sector, ACI completed the replacement of 3,500 HESS steel block pallets which has improved the manufacturing process and increased production capacity of interlocking pavestones by 13%, concrete blocks by 9%, curbstones by 7% and precast materials by 5%.

Looking ahead, Aamal Cement Industries aims to further enhance its existing product portfolio through a number of Gulf Rocks Aamal Maritime for Transportation initiatives including: introducing a greater variety of concrete Gulf Rocks is a leading importer Services (AMTS) slabs in terms of design and colour, expanding the paving and provider of high-quality gabbro AMTS owns and operates two shipping product range; introducing a modern design of interlocking aggregates, which are widely used vessels, ‘Um Al Hanaya’ and ‘Al Rayyan’, paving stones through the launch of its Tegula and Amplio in concrete products. which are bulk carriers, each with capacity range; and progressing road barrier production and precast in excess of 56,000 tonnes. products. Furthermore, ACI’s product portfolio has been further Gulf Rocks faced a difficult year in 2019 expanded through the addition of drop curbstones, highway due to a slowdown in the construction In 2019, the vessels continued to operate curbstones, the Trief curb transition system and Radius curbs sector, although the outlook for 2020 is successfully in the Far East and Europe which are generating significant market demand. promising, as the company is exploring supported by strong demand in these potential investment opportunities markets. This demand is expected to in Oman. continue throughout 2020.

32 Aamal Company Q.P.S.C. Annual Report 2019 33 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Operational Review – by Segment continued

Industrial Manufacturing continued

5. Advanced Pipes and Casts Company (APC) 6. Frijns Structural Steel Middle East

APC is a leading pipe manufacturer in the Middle Frijns Structural Steel – Middle East started East. The company’s extensive production capacity operations in Qatar in 2009 by opening its first is largely automated and has the flexibility to production facility in the region, which produces respond swiftly to changes in end-market demand. steel for the petrochemical and process industries, including all associated engineering, production, APC encountered testing conditions in 2019 due to the slowdown in the construction sector. However, the company anti-corrosion, construction, and assembly work. has benefitted from increased enquiries and orders that will manifest itself in 2020. In addition, the company is evaluating Frijns has a 75,000 squared meters state of the art workshop the purchase of equipment for liners that would significantly in the Mesaieed area. reduce the manufactured product cost.

34 Aamal Company Q.P.S.C. Annual Report 2019 35 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Operational Review – by Segment continued

Trading and Revenue in the Trading and Distribution segment increased significantly, up 14.8% year-on-year to QAR 800 million, while net profit declined 21.1% distribution year-on-year to QAR 99 million.

Revenue (QARm) Net profit (QARm) The outlook for the Trading and Distribution The Trading and Distribution segment comprises segment is positive with new supplier agreements the following operations: at Ebn Sina Medical, Aamal Medical, and Aamal 1. Ebn Sina Medical 2019 799.6 2019 98.9 Trading and Distribution. 2. Ebn Sina Pharmacy

2018 696.4 2018 125.3 3. Foot Care Centre

4. Aamal Medical

Net profit margin (%) 5. Aamal Trading and Distribution

2019 12.4 6. Legend for Trading

2018 18.0

36 Aamal Company Q.P.S.C. Annual Report 2019 37 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Operational Review – by Segment continued

Trading and distribution continued

2. Ebn Sina Pharmacy

Ebn Sina Pharmacy, which is managed by Ebn Sina Medical, is a modern chain of pharmacies located in City Center Doha and The Center. In 2019, a new Ebn Sina Pharmacy opened at Musherieb Rail Station, renovation works of Ebn Sina Pharmacy at City Center Doha shopping mall was completed, and the first ‘Pharmacy Robot’ in the State of Qatar has been installed.

A rebrand has recently been undertaken ahead of expansion 1. Ebn Sina Medical plans for the pharmacy chain. In 2020, we expect Ebn Sina Pharmacy to benefit significantly from developments at City Branch of Aamal Q.S.C. Center Doha, such as the new shop openings which are expected to drive increased footfall. Ebn Sina Medical is the leading provider of In the past year, Ebn Sina Medical successfully completed the pharmaceutical, hospital supplies and consumer installation of the first Robotic Pharmacy in Qatar at Ebn Sina Pharmacy in City Center Shopping Mall and opened of a third health products in Qatar, and represents in pharmacy at Musheireb Rail Station. The installation of the robotic excess of 50 international leading healthcare pharmacy is a catalyst to promote this technology in Qatar and manufacturers from more than 20 countries. encourage further installations. Such healthcare manufacturers include Roche, Ebn Sina Medical progressed its efforts to upgrade warehouse 3. Foot Care Centre AstraZeneca, Novartis Pharma, B-Braun, Boston operations and successfully obtained the ‘GDP Certification’ Scientific and Nuxe. Ebn Sina Medical also operates which is valid until 2022. Warehouse automation has now been installed which enables Ebn Sina Medical to store large volumes a chain of pharmacies and three Foot Care Centres. of drugs and accurately dispense them at high speed. Foot Care Centre provides a range of foot care services and products including a broad range of Ebn Sina Medical continues to source pharmaceutical products In 2019, Ebn Sina Medical successfully established several new biomechanical, orthopedic and therapeutic services strategic partnerships with suppliers, enabling the company to directly from the countries of origin, for example in Europe, instead diversify its product offering for generic, branded and biosimilar of via blockade countries. In doing so, Ebn Sina Medical has now for feet and a variety of foot care products from drugs. These partnerships include: established several new strategic partnerships with suppliers, the well-known brand SCHOLL. Foot Care Centre • Genpham Avexis Company – Switzerland, Gene Therapy enabling it to deliver vital medication for the treatment of rare, life-threatening diseases in Qatar. is managed by Ebn Sina Medical and has three • Leosons Company – USA, Pharmaceutical and Operating Theatre Products operating branches opening its last branch • Surveal – Belgium, Pharmaceutical and Food Supplement in City Center Doha in 2019. Foot Care Centre • Getz Company – Pakistan, Pharmaceutical Company is a registered trademark in Qatar. • EKIP Pharma – Turkey, Generic Pharmaceutical Company • KADY Company – Canada, Herbal Pharmaceutical Company • Luye Pharma Company- Hong Kong

38 Aamal Company Q.P.S.C. Annual Report 2019 39 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Operational Review – by Segment continued

Trading and distribution continued

4. Aamal Medical 5. Aamal Trading and Distribution

Aamal Medical is a leading medical equipment In 2019, Aamal Medical pursued a broad and multi-stage Aamal Trading and Distribution is a leading strengthen its long-standing relationship with its retail partners. supplier in Qatar. The company has exclusive approach to the Qatari market, increasing its market penetration distributor of automotive products and home The company continues to explore opportunities for new through Masimo, GE and Stryker, known for their market and partnerships which enable it to further expand its tyre-related distribution agreements with several leading quality leadership. appliances and is the exclusive distributor of products and services. international medical equipment suppliers. Bridgestone tyres in Qatar. The company is also Aamal Medical also provides consultancy The company has also been developing a product-diversification involved in the supply, installation, commissioning strategy through which Aamal Medical has partnered with services focused on the development of Olympus in the area of endoscopy. Aamal Medical has also and maintenance of air conditioning and operating room theatres and the installation benefitted from up-selling new products to Ambulance and refrigeration equipment. of hospital information systems. Emergency Medical Services (EMS), an existing market segment, and signed a contract with a leading Irish Company ‘ACETECH’ 2019 continued to be a challenging year for Aamal Trading and for RFID tracking, positioning Aamal Medical as a holistic Distribution owing to stock supply challenges in the first quarter supplier for EMS and enabling the business to fulfil its goal of due to some system issues at the supplier, as well as strong price becoming a leading player in the field of ambulance vehicles. competition. Also in the year, the company took the decision to close-down its home appliances division, ‘Gettco Home 2020 presents many opportunities for Aamal Medical, supported Appliances’, as it proved to be an unviable business with low by a strong pipeline of promising projects. Aamal Medical margins in a highly competitive and saturated market. Aamal will continue to explore the introduction to Qatar of the latest Trading and Distribution also liquidated obsolete stock, of tyres healthcare technologies such as Artificial Intelligence (‘AI’), stem and home appliances. cell therapy, mobile health and telemedicine. In response to these challenges, Aamal Trading and Distribution Aamal Medical is a respected supplier of Healthcare IT for many introduced several initiatives such as increasing its product years and it will continue to explore and bring to Qatar the latest offerings and promoting the longer lifespan of its quality brands. healthcare technologies. Furthermore, Aamal Trading and Distribution launched ‘Total Tyre Care’, a solution-based business offering after sales services, which aims to increase customer loyalty and drive sales growth, and also launched its ‘Dealer Loyalty Program’ to further

40 Aamal Company Q.P.S.C. Annual Report 2019 41 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Operational Review – by Segment continued

Revenue in the Property segment declined marginally from QAR 295 million in 2018 to QAR 290 million in 2019, while net profit was down 7.1% to Property QAR 224 million.

This reflects the tougher retail environment The Property segment comprises the Revenue (QARm) Net profit – fully consolidated activities (QARm) following the blockade, increases in maintenance, following operations: utility and insurance costs together with an 1. City Center Doha Shopping Mall 2019 290.1 2019 218.4 absence of lease termination penalties that benefitted 2018. 2. Aamal Real Estate

3. Aamal ECE 2018 295.4 2018 235.7

Share of net profit of associates and joint ventures Net underlying profit margin (%) accounted for using the equity method (QARm)

2019 75.3 2019 5.6

2018 79.8 2018 5.4

Net profit* (QARm)

2019 223.9

2018 241.1

* No fair value gains on investment properties in 2018 and 2019.

42 Aamal Company Q.P.S.C. Annual Report 2019 43 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Operational Review – by Segment continued

Property continued

1. City Center Doha 2. Aamal Real Estate

City Center Doha (‘CCD’) was one of the first Aamal Real Estate comprises; Souq Haraj Najma, shopping malls in Doha and is still widely regarded a traditional souq comprising 376 shops and as a leading mall in Qatar. This is supported by its 24 residential flats; four residential compounds twin virtues of size and prime location in the heart with 69 villas; and six residential buildings with of the West Bay area of Doha, the city’s central 227 apartments. business district with a high density of both residential towers and hotels. In 2019, Aamal Real Estate completed the renovation of 40 apartments located in Bin Mahmoud, Madinat Khalifa and Against a backdrop of increased market competition due to the Al Massila and renovation work started at Souq Harraj which opening of new shopping centres, City Center Doha was able to will be completed in mid-2020. maintain its leading position with no change to overall footfall levels. In 2019, the renovation work at City Center Doha reached its final stages and, towards the end of the year, renovation of the ground floor car park commenced.

In 2020, City Center Doha expects to see new shop openings which will drive footfall through the mall and enhance the visitor experience. Furthermore, an agreement has been signed with Ashgal Public Works Authority to build a pedestrian bridge which will directly connect to the mall’s first floor with construction scheduled to start in mid-2020 with a second bridge planned to connect the mall to the DECC metro station.

44 Aamal Company Q.P.S.C. Annual Report 2019 45 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Operational Review – by Segment continued

Managed In the Managed Services segment, revenues decreased by 34.7% to QAR 63 million and net profit decreased by QAR 2 million year-on-year Services to QAR 6 million. This is largely due to the deconsolidation of ECCO Gulf, stemming from the findings of a review undertaken in accordance with

Revenue (QARm) Net profit – fully consolidated activities (QARm) our Internal Controls over Financial Reporting framework.

As a result, ECCO Gulf is now treated as a joint The Managed Services segment comprises the 2019 63.2 2019 3.1 venture entity and accounted for as an equity following operations: accounted investee. The financial statements for 1. Aamal Services

2018 96.7 2018 8.2 2018 have not been restated due to immateriality. On a like-for-like basis, net profit of the Managed 2. Ecco Gulf * 2019 adjusted for the deconsolidation of ECCO Gulf, now accounted as equity Services segment is down 7.9% compared to 2018, accounted investees. 3. Aamal Travel Share of net profit of associates and joint ventures reflecting the impact of increased competition. Net underlying profit margin (%) accounted for using the equity method (QARm) 4. Al Farazdaq

5. Family Entertainment Center 2019 5.0 2019 2.6 6. Winter Wonderland

2018 8.4 2018 0

Net profit (QARm)

2019 5.7

2018 8.2

46 Aamal Company Q.P.S.C. Annual Report 2019 47 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Operational Review – by Segment continued Operational Review – by Segment continued

Managed Services continued

1. Aamal Services 2. ECCO Gulf W.L.L.

Aamal Services provides a wide range of ECCO Gulf is one of the region’s leading contact housekeeping services including cleaning, hotel and center operators and business process outsourcers. hospitality services, waste collection and disposal The company offers the outsourcing of business (including medical waste and solid waste), ground processes, professional services and human maintenance and landscaping, pest control and resources to clients in Qatar. fleet/car washing. In 2019, ECCO Gulf signed new contracts with key organisations 2019 was a challenging year for the industry in terms from various sectors including retail, telecommunications, of increased competition and budget constraints. However, banking and finance, government institutions and more. Aamal Services managed to successfully secure key contracts Furthermore, ECCO Gulf has installed advanced systems such within different sectors and increased its headcount by 15%. as Microsoft Dynamics 365 CRM, Omni Channel Center Solution, Aamal Services increased the number of employees for its Hootsuite Social Media platform to fulfill client’s needs. Façade Cleaning services which is expected to improve the performance of this segment. In 2020, ECCO Gulf aims to offer new innovative solutions to better serve their clients and improve their customers’ journeys. Looking ahead, Aamal Services aims to focus on small to medium sized premium businesses which have an assiduous focus on quality.

48 Aamal Company Q.P.S.C. Annual Report 2019 49 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Operational Review – by Segment continued

Managed Services continued

3. Aamal Travel (also known as Aamal Travel 5. Family Entertainment Center ‘Fun City’ Lufthansa City Center)

Family Entertainment Center, otherwise known Aamal Travel is an International Air Transport as ‘Fun City’, is an indoor amusement center Association (IATA) accredited travel agency with a mixed range of rides. It is located on the providing a range of travel services, including entertainment level of City Centre Doha (CCD). airline reservations and ticketing, worldwide With a reputation for hi-tech entertainment, Fun hotel bookings and holiday packages. City offers a varied mix of rides, games and sports. In 2019, the company established new connections with several The Family Entertainment Center installed new amusement football-playing South American countries which contributed rides, VR games, a trampoline park and inflatable games, which significantly to the company’s positive performance in the year. helped to attract more customers and boost revenues by 18% year-on-year. These were supported by a number of successful In 2020, Aamal Travel plans to open a new Aamal Travel branch promotional activities. and boost its activity and exposure in the Qatar travel market to ensure the company is optimally positioned to take advantage In 2020, Fun City will continue with its aggressive marketing of the opportunities presented by the rising popularity of Qatar campaign to attract and retain customers as well as plan for as a tourism destination. upgrading to the facilities and customer experience.

4. Al Farazdaq Company W.L.L. 6. Winter Wonderland

Al Farazdaq Company provides printing Winter Wonderland, which is also located in City solutions and trades in various office supply Center Doha, is a family-friendly place devoted products. The printing press is equipped with to the pursuit of excitement, fun and comfort. state-of-the-art printing machines enabling the It features winter adventures for the entire family company to offer innovative digital printing to enjoy indoor and includes an ice-skating rink, solutions to the business community. a 10-pin strike bowling alley and billiard tables.

In 2019, Al Farazdaq installed the first eco-friendly printer The ice rink at City Centre Doha remained closed throughout in Qatar which uses ink made from bamboo oil. This printer 2019 due to the ongoing renovation works, leading to a decline has created many opportunities with regard to printing food- in revenue and net profit, respectively. The ice rink is expected related items such as trays, sandwich paper and NCR books to reopen in late 2020. (No Carbon Required, is a type of coated paper designed to transfer information written on the front onto sheets beneath). Al Farazdaq also broadened its offering of printing services through the introduction of digital spot UV foiling.

50 Aamal Company Q.P.S.C. Annual Report 2019 51 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

54 Board of Directors 56 Corporate Governance 64 Board of Directors’ Report on Corporate Governance Corporate 65 Independent Assurance Report on Compliance with Qatar Financial Markets Authority Laws and relevant legislations 67 Board of Directors’ Report on Internal Controls Governance over Financial Reporting 69 Independent Assurance Report on Internal Controls over Financial Reporting

52 Aamal Company Q.P.S.C. Annual Report 2019 53 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Board of Directors

1 2 3 4 5 6 7 8 9

Sheikh Faisal Bin Qassim Al Thani Sheikh Mohammed Bin Faisal Sheikha Al Jazi Bint Faisal Al Thani Sheikh Abdullah Bin Hamad Sheikh Jabor Bin Mr. Kamel Muhammad Mr. Yousef Bin Rashid Mr. Faisal Bin Abdulla Bin Sheikh Faisal Bin Fahed Bin Al Thani Al Thani Abdulrahman Al Thani Al Agla Al Khater Zaid Al Mahmoud Jassim Al Thani Chairman of the CEO and Managing Director Board Member Board Member Board Member Board Member Board Member Board Member Board Member Board of Directors Non-Executive Executive Non-Executive Non-Executive Non-Executive Non-Executive Non-Executive Non-Executive Non-Executive

Term of office Term of office Joined the Board in 2007. Joined the Board in 2009. Joined the Board in 2016. Joined the Board in 2010. Joined the Board in 2017. Joined the Board in 2017. Joined the Board in 2018. Joined the Board in 2018 Joined the Board in 2019. Independent Independent No No Yes Yes Yes No No No No Committee membership Committee membership

Board Committees Chair Audit Executive Nomination and Remuneration

1 2 4 6 8

3 5 7 9

54 Aamal Company Q.P.S.C. Annual Report 2019 55 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Organisational Structure Corporate Governance Framework

1. Corporate Governance Framework 1.1. Objective The Board of Directors (the “Board”) and the Executive Management of Aamal Company Q.P.S.C. (the “Company” or “Aamal”) believe that a strong corporate governance framework is critical to ensuring high performance across all activities of the Company and its subsidiaries (together the Board of Directors “Group”), and is essential to building investor trust and providing safeguards against any misguided corporate activity.

The Board has adopted a Corporate Governance Framework which relates to the way in which the affairs of Aamal are governed and managed by the Board, the committees of the Board and the Executive Management team. It is a governance ecosystem by which Aamal is directed and controlled, taking into consideration the interests of all its stakeholders, not just its shareholders.

Aamal’s Corporate Governance Framework, together with its associated policies, comply with all relevant rules and regulations issued by the Qatar Nomination and Financial Markets Authority (“QFMA” or the “Authority”) including the Governance Code for Companies and Legal Entities Listed in the Main Market Remuneration Committee No. (5), 2016 (the “Code”), the Company’s Articles of Association (or “AoA”), and the Commercial Companies Law No. (11), 2015 (the “Companies Law”). 1.2. Commitment to comply with Corporate Governance The Board and Executive Management are committed to the best practices detailed in Aamal Corporate Governance Framework, in order to achieve Board Secretary Executive Committee the Company’s objectives.

1.3 Scope The goal of the Annual Corporate Governance Report is to ensure transparency and disclosure of the governance practices within Aamal. Audit Committee It represents the values of the Company and the policies that all parties must abide by. 2. Corporate Governance milestones for the year ended 31 December 2019 In order to enhance the Corporate Governance culture across the Group, Aamal has developed its corporate governance practices. These CEO and Managing Chief Internal Auditor developments target both organizational aspects as well as other governance processes. In connection with the adoption and implementation of the new regulatory developments issued by the QFMA, Aamal has developed and Director commenced implementing numerous initiatives in line with the new requirements of the Code, including but limited to the following: 1. Amended Articles of Association to comply with the Code and best practices. 2. Continued to enhance its Corporate Governance Framework with the aim of achieving full compliance with the Code. 3. Improved its Internal Control over Financial Reporting Framework. 4. Restructured the Board and its committees in accordance with the requirements of the Code: a. The size of the Board was increased from 6 to 9 Directors and a third of the seats were allocated to Independent Directors. b. Elections were held to appoint Independent Directors who shall serve until the end of the current Board’s tenor. c. Independent Directors were appointed to Board committees in accordance with the Company’s new Corporate Governance Framework and the requirements of the Code. d. The Compensation Committee was subsumed into the Nomination Committee to constitute a single committee referred to as the Nomination and Remuneration Committee. e. The Corporate Governance Committee was dissolved and the responsibility to draft the Corporate Governance Report was delegated to Executive Management. Chief Risk Chief Legal & Chief Chief Finance Chief Business Head of Human 5. During the year 2019, Executive management updated the company internal risk controls including implementing segregation of duties, Officer Compliance Investment Officer Support Officer Resources modifying work flows and processes, updating policies and procedures, service level agreements and applying fundamental and procedural Officer Officer changes. 6. Implemented the Whistleblowing Policy as part of company’s commitment to apply best Corporate Governance practices, emphasize honesty, Risk Management Legal Affairs Industrial Accounting Marketing & Recruitment & Talent integrity, ethical dealing, transparency and accountability. Manufacturing Communication Retention Internal Controls Compliance Financial Planning & Medical & Trading Budgeting Information Payroll & People 3. Board of Directors Corporate Technology Services 3.1. Size and charter Governance Real Estate & Treasury & Corporate Members of the Board are elected by the shareholders at the Annual General Assembly for a three-year term. As of 31 December 2019, the Board has Managed Services Finance Admin & Procurement nine (9) Board members, of which three (3) are independent, as required by the Articles of Association. Investor Relations The Board members of Aamal, whether in person or representing a legal entity, do not hold directorship roles on the boards of more than three (3) publicly listed companies in total that have headquarters located in the State of Qatar, or combine two directorships of two companies that conduct similar business activities.

The Chairman does not hold any executive position in the Company.

The Board meets as often as necessary, but not less than six times a year and three months have not elapsed without convening a meeting.

The Board members shall act in good faith, exercise diligence and care, speak out and be loyal to the Company. The Board member should also take all reasonable steps to be fully aware of potential issues in the Company.

56 Aamal Company Q.P.S.C. Annual Report 2019 57 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Corporate Governance Framework continued

The Board Charter of Aamal, in compliance with the Code, defines the respective roles, responsibilities and authorities of the Board of Directors, 3.4. Changes in the Board’s directorships during 2019 both individually and collectively, and includes the following: In accordance with the Code, three new Independent Directors were elected to the Board, following the elections held during the Company’s AGM • Key functions and tasks of the Board held on 22 April 2018. The composition of the Board remained the same throughout 2019. • Induction program for the new Board members • Board responsibilities 3.5. Non-Executive Board members • Chairman responsibilities During the year ended 31 December 2019, the majority of the Board members were non-executive members. The Company applies the strict • Formation and composition of committees definition of “Non-executive Board member” according to the Code i.e. “Non-executive Board members are those who are not performing • Conflicts of interest executive management duties in the Company, who are not dedicated full time and who do not receive monthly or yearly remuneration from • Share dealing the Company other than remuneration received as a Board member.” • Financial reporting 3.6. Independence 3.2. Board qualifications The Company acknowledges that as per the corporate governance rules, at least one third of the Board members are independent. During the year The directors of the Board have the required expertise and management skills to conduct their duties in the Company’s best interests. The Board ended 31 December 2019, the Board comprised of 9 members, of which, 3 members are independent. members have been selected based on these skills. The current independent Board members are not under the influence of any factor that limits their capacity to deliberate on Company matters The Board members demonstrate commitment by devoting the necessary time and care towards performing their duties for the duration of their term. in an unbiased and objective manner based on known and existing facts.

3.3. Board composition 3.7. Prohibition of combining positions The Board is composed of the following members for the year ended 31 December 2019: The Board members will refrain from combining prohibited positions, in compliance with Article 7 of the Code. Breakdown of shares Date of Election/Reelection/Appointment/ Member The Board members provide the Board secretary with an Independence and Conflict of Interest Declaration annually, to declare whether they hold Director Name Party Represented Release/leave Position classification Units % any legally prohibited positions. Sheikh Faisal In his personal Elected on 17 April 2016, re-elected on 15 April Chairman Non-executive 1,588,610,382 25.22 Bin Qassim capacity 2019 until the date of the General Assembly 3.8. Board members’ Experience and membership in other boards Al Thani for the financial year ending 31 December 2021 Director Name Experience and membership in other boards Sheikh In his personal Elected on 17 April 2016, re-elected on 15 April Chief Executive Executive 63,000,0001 1.00 Mohammed capacity 2019 until the date of the General Assembly Officer and Sheikh Faisal Bin Qassim Al Thani • Founder and Chairman of Aamal Bin Faisal for the financial year ending 31 December 2021 Managing • Chairman of Board since the listing on the Qatar Stock Exchange in 2007 Al Thani Director • Chairman of Al Faisal Holding Company W.L.L. Sheikh Jabor Bin Al Faisal Elected on 4 February 2017, re-elected on Ordinary Non-executive 10,5001 45.00 • Chairman of the Qatari Businessmen Association 2 Abdulrahman Holding 15 April 2019 until the date of the General Member 2,835,000,000 • Member of the Board of Trustees at Qatar University Al Thani Company W.L.L. Assembly for the financial year ending • Founder and Chairman of Al Faisal without Borders Foundation 31 December 2021 • Founder and Chairman of the board of trustees of Sheikh Faisal Qassim Al Sheikh Abdullah Al Jazi Real Elected on 17 April 2016, re-elected on 15 April Ordinary Non-executive 63,000,0002 1.00 Thani Museum Bin Hamad Estate 2019 until the date of the General Assembly Member • Chairman of the Gulf Qatari Classic Cars Association Al Thani Investment for the financial year ending 31 December 2021 • Member of the Board of Trustees at the College of Business in DePaul Company W.L.L. University in Chicago Sheikha Al Jazi Al Rayyan Elected on 17 April 2016, re-elected on 15 April Ordinary Non-executive 31,500,0001 1.00 Bint Faisal International 2019 until the date of the General Assembly Member 63,000,0002 Sheikh Mohammed Bin Faisal Al Thani • Chief Executive Officer (CEO) and Managing Director of Aamal Al Thani Educational for the financial year ending 31 December 2021 • Board member of Aamal since 2009 Company W.L.L. • Board member of Al Khaliji Bank Q.P.S.C. Mr. Kamel City Limousine Elected on 4 February 2017, re-elected on Ordinary Non-executive 63,000,0002 1.00 • Chairman of Optimized Holding W.L.L. Muhammad Company W.L.L. 15 April 2019 until the date of the General Member • Holds a Bachelor’s degree in Business Administration from Carnegie Mellon Al Agla Assembly for the financial year ending University, Qatar 31 December 2021 • Honorary President of the Italian Chamber of Commerce in Qatar Sheikh Faisal In his personal Elected on 15 April 2019 until the date of the Independent Non-executive 200,0001 0 Bin Fahed Bin capacity General Assembly for the financial year Member Sheikh Jabor Bin Abdulrahman Al Thani • Board member of Aamal since February 2017 Jassim Al Thani1 ending 31 December 2021 (Representative of Al Faisal Holding Company W.L.L.) • Vice Chairman and Managing Director of Transind Group Mr. Yousef In his personal Elected on 21 April 2018, re-elected on 15 April Independent Non-executive 0 0 • Founder and Managing Director of Al-Bayan Insurance Broker Bin Rashid capacity 2019 until the date of the General Assembly Member • Managing Director of Al Arabi Sports Club Al Khater for the financial year ending 31 December 2021 • Holds a Bachelor of Business Administration from European University, Mr. Faisal In his personal Elected on 21 April 2018, re-elected on 15 April Independent Non-executive 0 0 Geneva, Switzerland Bin Abdullah capacity 2019 until the date of the General Assembly Member • Certified Financial Analyst from the American Academy of Financial Bin Zaid for the financial year ending 31 December 2021 Management Al Mahmoud • Holds a Professional Diploma in Financial Management and Banking from Mr. Hamad In his personal Elected on 21 April 2018 until the date of the Independent Non-executive 0 0 the Arab Academy for Banking and Financial Sciences Rashid Ali capacity General Assembly Meeting on 15 April 2019 Member Al Mansoor Sheikh Abdullah Bin Hamad Al Than • Board member of Aamal since 2010 Al Nuaimi (Representative of Al Jazi Real Estate Investment Company W.L.L.) • Attained the rank of Major in the Qatari Armed Forces • Holds a Bachelor’s degree in Business from Kingston University, UK (1) Held directly in personal capacity (2) Held by the business entity whom the director is the representative

58 Aamal Company Q.P.S.C. Annual Report 2019 59 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Corporate Governance Framework continued

3.9. Board’s Role Sheikha Al Jazi Bint Faisal Al Thani • Board member of Aamal since 2016. The Board independently oversees the activities of the Company with the objective of sustainable creation of value, considering the interests (Representative of Al Rayyan International Educational • Holds a Master’s degree in International Peace and Security from King’s of the shareholders, its employees and other stakeholders. Company W.L.L.) College London, UK. • Holds a Bachelor’s degree in Culture and Politics from Georgetown The Board members act in good faith and in such a manner, as they reasonably believe, to be in the best interests of the Company. University, Qatar. The Directors also: Mr. Kamel Muhammad Al Agla • Board member of Aamal since February 2017. • Comply with all applicable laws, regulations, confidentiality obligations and other corporate policies of the Company. (Representative of City Limousine Company W.L.L.) • Chief Real Estate Officer of Al Faisal Holding. • Follow all policies, procedures and internal control systems of the Company. • Joined Al Faisal Holding in 1985, since then he has spearheaded most of Al • Act with honesty, good faith and in the best interests of the Company, and not in the interest of the group it represents, or who voted for him. Faisal’s construction projects, including the development of the company’s iconic real estate assets. The Board commits to complying with the principles of justice and equality among stakeholders without discrimination among them on basis • Holds a Bachelor’s degree in Civil Engineering from Al Azhar University, Egypt. of race, gender and religion; and transparency.

Sheikh Faisal Bin Fahed Bin Jassim Al Thani1 • Board member of Aamal since 2019. 3.10. Segregation of the Chairman and the Chief Executive Officer and Managing Director roles • Over 30 years of experience working in several international companies in the Oil and Gas industry, including SHELL, Qatar Petroleum, Arco Petroleum, In accordance with the QFMA Code, the role of the Chairman and Chief Executive Officer (CEO) and Managing Director (MD) are distinct and British Petroleum, Anadarko Petroleum, and Maersk Oil Qatar. separate. The same person should not hold or exercise the positions of Chairman and Chief Executive Officer (CEO) and Managing Director (MD) at the same time. There is a clear segregation of responsibilities between the two positions in Aamal. • Board member at Commercial Bank Qatar. • Chairman of Qatar Petroleum Engineers Society. All Board members are compliant with Article 7 of QFMA’s Code regarding their abstinence from holding or combining prohibited positions. • Chairman of Doha Petroleum Club. The Board’s composition is balanced and the Company’s structure limits having one person in the company holding unfettered powers to • Chairman of Al Namaa Real Estate. make decisions. • Chairman of Al wataniya International Holding Company. • Chairman of Qatar National Import and Export (QNIE). 4. Board Committees Mr. Yousef Bin Rashid Al Khater • Board Member of Aamal since 2018. The Board forms committees with sufficient expertise. The committees serve to increase the efficiency of the Board’s work and the handling • Over 29 years’ experience in executive and public management, and project of complex issues. The nominated committee chairmen report regularly to the Board on the work of their respective committees. management with Qatar Petroleum Company (QP) and several other international companies in the oil and gas industry such as Exxon Mobil and In order to comply with the Code, the Board reorganized the committees and their composition and constituted the following three (3) committees Conoco Philips, Occidental Petroleum Qatar, and Total. on 28 April 2019: • In 2011, appointed as an Economic Consultant in HE’s the Prime Minister’s • Executive Committee Office in Qatar to manage Elan Company and the restructuring of the • Audit Committee company from June 2012 to April 2014. • Nomination & Remuneration Committee • CEO of Barwa Real Estate from April 2009 to March 2011. • CEO and Board member of Gulf Drilling International and Board member During 2018, the Board approved the revised committees’ charters and issued decisions to nominate the chairman and members of each of Gulf International Services Company from December 2004 to April 2009. committee, identifying its responsibilities, duties, and work provisions and procedures. In 2019 the same process was followed and rigorously • Board member of Qatar’s Advisory Council (Shura Council) since October 2004. implemented. • Member of Arab Interim Parliament and International Union Parliament. • Holds a Bachelor’s degree in Industrial Engineering (with honors) from 4.1. Changes in the Committee’s membership during 2019 Fairleigh Dickinson University, New Jersey, USA. On 15 April 2019, all committee members were removed to make way for reconstituting the Board committee in a manner compliant with the Code. Mr. Faisal Bin Abdullah Bin Zaid Al Mahmoud • Board Member of Aamal since 2018. After the election of the new Board members during the General Assembly Meeting on 15 April 2019, the Board on 28 April 2019, appointed new Chairs and committee members in accordance with the requirements of the Code. • Owner of Baytak for Development Company. • Board member in Al Madaen Company. 4.2. Executive Committee • Previous held the roles of Minister in the Ministry of Endowments and Islamic Affairs, Deputy Minister in the Ministry of Endowments and The Executive Committee is largely responsible for handling the Company’s strategy, investments and financing by reviewing, evaluating and Islamic Affairs. recommending the strategic plans and decisions taken by the Board. • Chairman of the Administration of the General Authority of Endowments. The Committee was composed of the following members for the year ended 31 December 2019: • Chairman of the Administration of the General Authority for Minors and their rule. Name of Director Position Member status • Chairman of Mawashi Company and a Board member of Al Jazeera for Sheikh Mohammed Bin Faisal Al Thani Committee Chairman Non-independent Investments. • Holds a Bachelor’s degree in Sharia and Islamic Studies from the College of Sheikha Al Jazi Bint Faisal Al Thani Member Non-independent Sharia and Islamic Studies at Qatar University, Qatar. Sheikh Jabor Bin Abdulrahman Al Thani Member Non-independent

Mr. Hamad Rashid Ali Al Mansoor Al Nuaimi • Resigned as Board member of Aamal on 15 April 2019. Mr. Faisal Bin Abdullah Bin Zaid Al Mahmoud Member Independent • Currently works at Ministry of Endowments and Islamic Affairs. • Owner of IT Company in Doha. During the year ended 31 December 2019, the Executive Committee did not convene and therefore no formal reports or recommendations were • Owner of Mobile Link for Security Systems. submitted to the Board. • Owner of Trust for Oils Company. • Holds a Bachelor’s degree in Library Sciences from Qatar University, Qatar.

(1) Sheikh Faisal Fahad Jassim Al Thani was appointed to the Board of Directors at the Annual General Meeting of the company held on 15th April 2019.

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Corporate Governance Framework continued

4.3. Audit Committee 5. Senior Management The Audit Committee handles issues related to financial reporting, risk management, compliance, the appointment and work of the external 5.1 Key personnel auditor (including determining the independence of the external auditor, issuing the audit mandate to the external auditor, determining auditing Chief Executive Officer (CEO) and Managing Director (MD) – The MD is responsible for the day-to-day management of the Company and focal points and negotiating the fee agreement with the external auditor subject to the approval of the General Meeting). coordinating with the Board on the Company’s strategy and tactical plans, ensuring the fulfilment of the strategic objectives of the Company and that business processes are aligned with shareholder interests. The Committee was composed of the following members for the year ended 31 December 2019:

Name of Director Position Member status Sheikh Mohammed Bin Faisal Al Thani has held the position of Managing Director since 4 February 2017. On 26 February 2019, Sheikh Mohammed Bin Faisal Al Thani was appointed as the CEO of Aamal in addition to his capacity as the Company’s MD. Mr. Yousef Bin Rashid Al Khater Chairman Independent

Sheikh Faisal Bin Fahed Bin Jassim Al Thani1 Member Independent Advisor to the CEO – is responsible for advising the CEO on strategic matters related to the company’s activities. The position of Advisor to the CEO is held by Mohammad Abdul Qader Al-Ramahi, the previous CFO of Aamal, the appointment took effect on 25 April 2019. Mr. Kamel Muhammad Al Agla Member Non-independent

Mr. Hamad Rashid Ali Al Mansoor Al Nuaimi2 Member Independent Chief Financial Officer (CFO) – The CFO is responsible for the finance, treasury, administration and investors relation activities of Aamal, under the supervision of the CEO and Managing Director.

(1) Sheikh Faisal Fahad Jassim Al Thani was appointed to the Board of Directors at the Annual General Meeting of the company held on 15th April 2019 and subsequently appointed to the Audit Committee 28th April 2019. Sheikh Faisal attended all of the four subsequent Board meetings held in 2019. The position of CFO is held by Mr. Imran Chughtai who has over 30 years’ corporate finance experience, and replaced Mohammad Abdul Qader Al-Ramahi, the appointment took effect on 25 April 2019. (2) Mr. Hamad Al Nuaimi resigned from the Board of Directors at the Annual General Meeting of the company held on 15th April 2019, the respected member had attended the two previous Board meetings held in 2019. Chief Legal Officer (CLO) – The CLO is responsible for helping the Company to minimize its legal risks by advising the Company’s other officers and Board members on any major legal and regulatory issues the Company encounters. He/she also oversees the Company’s in-house attorneys and is 4.4. Nomination & Remuneration Committee under the direct supervision of the CEO and Managing Director. The position was vacant for the year ended 31 December 2019. However, the service The Nomination and Remuneration Committee shall identify, screen and recommend nominees for Board elections and recommend nominees is provided by Al Faisal Holding Legal Department governed by a newly implemented service level agreement. for Executive Management positions. The Committee aims to sustain long-term value for shareholders by ensuring that the Company can attract, develop and retain high-performing and motivated directors and senior executive management in a competitive international market. Chief Operating Officer (COO) – The COO is responsible for overseeing the activities and performance of the subsidiary companies. The COO ensures that annual business plans and targets are in place and follows up on the execution of these by managing the reporting from subsidiary The Committee was composed of the following members for the year ended 31 December 2019: companies on monthly/quarterly/annual basis in terms of operational and management performance. The position was vacant for the year ended 31 December 2019. Name of Director Position Member status Mr. Kamel Muhammad Al Agla Chairman Non-Independent

Sheikh Mohammed Bin Faisal Al Thani Member Non-Independent

Mr. Faisal Bin Abdullah Bin Zaid Al Mahmoud Member Independent

62 Aamal Company Q.P.S.C. Annual Report 2019 63 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements Board of Directors’ Report on Corporate Governance Independent Assurance Report on Compliance with Qatar Financial Board of Directors’ Assessment of Compliance with the QFMA’s Requirements Markets Authority Laws and relevant legislations Independent Assurance Report to the Shareholders of Aamal Company Q.P.S.C. For the Year Ended 31 December 2019 Report on compliance with the Qatar Financial Markets Authority’s (QFMA’s) law, related legislation, including the Governance Code for Companies 31 December 2019 & Legal Entities Listed on the Main Market (the “Code”) Issued by the QFMA’s Board pursuant to the QFMA’s Decision No. (5) of 2016, and on the Report on Compliance with Qatar Financial Markets Authority’s (QFMA’s) law and relevant legislation, including the Governance Code for suitability of design and operating effectiveness of internal controls over financial reporting Companies & Legal Entities Listed on the Main Market Issued by the QFMA’s Board pursuant to the QFMA’s Decision No. (5) of 2016, as at 31 December 2019. 1. Board of Directors’ Assessment of Compliance with the QFMA’s Requirements The Board of Directors of Aamal Company Q.P.S.C (“Aamal” or the “Parent”) and its subsidiaries (together are referred to as the “Group”) has carried Introduction an assessment of compliance as at 31 December 2019 with the Qatar Financial Market Authority (‘QFMA’) law and relevant legislations, Governance In accordance with the requirements of Article 24 of the Governance Code for Companies & Legal Entities Listed on the Main Market (the Code for Companies & Legal Entities Listed on the Main Market (“QFMA’s Requirements”) issued pursuant to Decision No. (5) of 2016 (the ‘Code’) “Governance Code” or the “Code”) issued by the Qatar Financial Markets Authority (QFMA) Board pursuant to Decision No. (5) of 2016, we have and other relevant legislations where applicable. carried out a limited assurance engagement over the accompanying “Board of Directors’ Assessment of Compliance with the QFMA’s Requirements” of Aamal Company Q.P.S.C. (the “Company”) and its subsidiaries (together the “Group”) as at 31 December 2019, as presented in the 2. The Board Corporate Governance section of the Annual Report. 2.1. Responsibilities of the Board The Board of Directors is committed to implement the following Governance principles set out in the Code: Responsibilities of the directors and those charged with governance • Justice and equality among Stakeholders without discrimination among them on basis of race, gender, and religion; The Board of Directors of the Group is responsible for preparing the accompanying ‘Corporate Governance Report’ that covers at a minimum the requirements of Article 4 of the Code. • Transparency, disclosure, and providing Information to the QFMA and Stakeholders at the right time and in the manner that enables them to make decisions and undertake their duties properly; The Board of Directors is also responsible for ensuring the Group’s compliance with the QFMA’s law and relevant legislations and the Governance • Upholding the values of corporate social responsibility; Code (the “QFMA’s Requirements”, the “Requirements”) for Companies & Legal Entities Listed on the Main Market issued by the QFMA’s Board • Providing the public interest of the Group and Stakeholders over the personal interest; and pursuant to Decision No. (5) of 2016 and preparing the accompanying “Board of Directors’ Assessment of Compliance with the QFMA’s • Performing duties, tasks and functions in good faith, integrity, honour and sincerity and taking the responsibility arising therefrom to the Requirements”. Stakeholders and society. The Board of Directors is also responsible for identification of areas of non-compliance and related justifications, where mitigated. 2.2. Management evaluation of compliance These responsibilities include the design, implementation and maintenance of adequate internal financial controls that if operating effectively In accordance with Article 2 of the Code, we have conducted an evaluation of the Group’s compliance with the QFMA’s Law, the Code and other would ensure the orderly and efficient conduct of its business, including compliance with applicable laws and regulations. relevant legislations. The Compliance function of the Group has completed an extensive checklist, which enumerates the articles of the QFMA’s Law, the Code and other relevant legislations to establish bases for our conclusion. Responsibilities of the Assurance Practitioner 2.3. External auditors Our responsibilities are to issue a limited assurance conclusion on whether anything has come to our attention that causes us to believe that the accompanying “Board of Directors’ Assessment of Compliance with the QFMA’s Requirements” – as presented in the Corporate Governance section In accordance with the Code, PricewaterhouseCoopers Qatar Branch, the external audit firm of the Group, has been appointed to issue a limited of the Annual Report – do not present fairly, in all material respects, the Group’s compliance with the QFMA’s law and relevant legislations, assurance report on the management’s assessment of compliance with the QFMA’s law, the Code and other relevant legislations as at 31 December including the Code, based on our limited assurance procedures; 2019 in accordance with International Standard on Assurance Engagements 3000 (Revised) ‘Assurance Engagements Other Than Audits or Reviews of Historical Financial Information’ issued by the International Auditing and Assurance Standards Board (‘IAASB’). We conducted our engagement in accordance with International Standard on Assurance Engagements 3000 (Revised) ‘Assurance Engagements Other Than Audits or Reviews of Historical Financial Information’ issued by the International Auditing and Assurance Standards Board (‘IAASB’). This 2.4. Compliance exceptions standard requires that we plan and perform our procedures to obtain limited assurance about whether anything has come to our attention that As at 31 December 2019, there are no matters identified that are not in compliance with QFMA’s Corporate Governance Code, and that there is a causes us to believe that the “Board of Directors’ Assessment of Compliance with the QFMA’s Requirements”, taken as a whole, is not prepared, in process in place to ensure compliance with QFMA’s relevant regulations. all material respects, in accordance with the QFMA’s law and relevant legislations, including the Code.

2.5. Board of Directors’ Conclusion The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable Based on our assessment of and results of procedures performed, the Board of Directors confirm compliance with the Compliance Requirements as assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance at 31 December 2019. that would have been obtained had a reasonable assurance engagement been performed. We did not perform procedures to identify additional procedures that would have been performed if this were a reasonable assurance engagement.

Faisal Bin Qassim Al Thani A limited assurance engagement involves assessing the risks of material misstatement of the “Board of Directors’ Assessment of Compliance with Chairman of the Board the QFMA’s Requirements”, whether due to fraud or error and responding to the assessed risks as necessary in the circumstances. A limited Doha, 18 February 2020 assurance engagement is substantially less in scope than a reasonable assurance engagement in relation to both the risk assessment procedures, including an understanding of internal control, and the procedures performed in response to the assessed risks. Accordingly, we do not express a reasonable assurance conclusion about whether the “Board of Directors’ Assessment of Compliance with the QFMA’s Requirements”, taken as a whole has been prepared, in all material respects, in accordance with the QFMA’s law and relevant legislations, including the Code.

The procedures we performed were based on our professional judgment and included inquiries, observation of processes performed, inspection of documents, evaluating the appropriateness of reporting policies for the Group and agreeing with underlying records.

Given the circumstances of the engagement, in performing the procedures listed above we: • made inquiries of management to obtain an understanding of the processes followed to identify the requirements of the QFMA law and relevant legislations, including the Code (the ‘Requirements’); the procedures adopted by management to comply with these Requirements and the methodology adopted by management to assess compliance with these Requirements, to understand the key processes and controls for reporting compliance with the Requirements; • considered the disclosures by comparing the contents of the ‘Corporate Governance Report’ against the requirements of Article 4 of the Code; • agreed the relevant contents of the ‘Corporate Governance Report’ to the underlying records maintained by the Group; and

64 Aamal Company Q.P.S.C. Annual Report 2019 65 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements Independent Assurance Report on Compliance with Qatar Financial Board of Directors’ Report on Internal Controls over Financial Reporting Markets Authority Laws and relevant legislations (continued) Board of Directors’ Assessment of Suitability of Design and Operating Effectiveness of Internal Control over Financial Reporting of Significant Processes Independent Assurance Report to the Shareholders of Aamal Company Q.P.S.C. For the Year Ended 31 December 2019 • performed limited substantive testing on a selective basis, when deemed necessary, to assess compliance with the Requirements, and observed Report on compliance with the Qatar Financial Markets Authority’s (QFMA’s) law, related legislation, including the Governance Code for Companies evidences gathered by management; and assessed whether violations of the Requirements, if any, have been disclosed by the Board of Directors, & Legal Entities Listed on the Main Market (the “Code”) Issued by the QFMA’s Board pursuant to the QFMA’s Decision No. (5) of 2016, and on the in all material respects. suitability of design and operating effectiveness of internal controls over financial reporting.

Our limited assurance procedures do not involve assessing the qualitative aspects or effectiveness of the procedures adopted by management to 1. Requirements Board of Directors’ Assessment of Internal Control Framework over Financial Reporting comply with the Requirements. Therefore, we do not provide any assurance as to whether the procedures adopted by management were of Significant Processes functioning effectively to achieve the objectives of the QFMA’s law and relevant legislations, including the Code. The Board of Directors of Aamal Company Q.P.S.C (“Aamal” or the “Parent”) and its subsidiaries (together are referred to as the “Group”) has carried an assessment of internal control framework over financial reporting as at 31 December 2019 in accordance with the Governance Code Our independence and quality control for Companies & Legal Entities Listed on the Main Market Issued by the Qatar Financial Markets Authority’s (QFMA’s) Board pursuant to Decision In carrying out our work, we have complied with the independence and other ethical requirements of the Code of Ethics for Professional No. (5) of 2016 (the ‘Code’). Accountants issued by the International Ethics Standards Board for Accountants (“IESBA”), which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour and the ethical requirements that are relevant in 2. The Board Qatar. We have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. 2.1. Responsibilities of the Board Our firm applies International Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control including The Board of Directors of the Group is responsible for establishing and maintaining effective internal controls over financial reporting. documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Internal control over financial reporting is a process designed by, or under the supervision of the Group’s Chief Executive and Chief Financial Officers, and approved and monitored by the Group’s Board of Directors, management and other competent personnel, to provide reasonable Inherent limitations assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and includes those policies and Many of the procedures followed by entities to adopt governance and legal requirements depend on the personnel applying the procedure, their procedures that: interpretation of the objective of such procedure, their assessment of whether the compliance procedure was implemented effectively, and in certain cases would not maintain audit trail. It is also noticeable that the design of compliance procedures would follow best practices that vary • Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of from one entity to another and from one country to another, which do not form a clear set of criteria to compare with. the Group; • Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, Non-financial performance information is subject to more inherent limitations than financial information, given the characteristics of the and that receipts and expenditures of the Group are being made only in accordance with the authorizations of management and Board of ‘Corporate Governance Report’ and the methods used for determining such information. Directors of the Group; and • Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Group’s assets that Because of the inherent limitations of internal financial controls over compliance with relevant laws and regulations, including the possibility of could have a material effect on the financial statements. collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. The Board of Directors of the Group are responsible for design, implementation and maintenance of adequate internal controls that when Other information operating effectively, would ensure of the orderly and efficient conduct of its business, including: The Board of Directors are responsible for the other information. The other information comprises the Annual Report (but does not include the • Adherence to Group’s policies; accompanying “Board of Directors’ assessment on compliance with QFMA’s Requirements” report which we obtained prior to the date of this • The safeguarding of its assets; assurance report. • The prevention and detection of frauds and errors; Our conclusions on the accompanying “Board of Directors’ assessment on compliance with QFMA’s Requirements” do not cover the other • The accuracy and completeness of the accounting records; information and we do not, and will not express any form of assurance conclusion thereon. • The timely preparation of reliable financial information; and • Compliance with applicable laws and regulations, including the QFMA’s law, relevant legislations and the Code, applicable to Companies & Legal In connection with our assurance engagement on the accompanying “Board of Directors’ assessment on compliance with QFMA’s Requirements”, Entities Listed on the Main Market issued by the QFMA’s Board pursuant to Decision No. (5) of 2016. our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the ‘“Board of Directors’ assessment on compliance with QFMA’s Requirements” or our knowledge obtained in the engagement, Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management or otherwise appears to be materially misstated. override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Further, projections of any evaluation of effectiveness of the internal control over financial reporting to future periods are subject to the risks that If, based on the work we have performed, on the other information that we obtained prior to the date of this report, we conclude that there is a controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. deteriorate.

Conclusion 2.2. Management assessment Based on our limited assurance procedures described in this report, nothing has come to our attention that causes us to believe that the “Board of In this section, we provide a description of the scope covered by the assessment of the suitability of design and operating effectiveness of the Directors’ assessment on compliance with QFMA’s Requirements”, do not present fairly, in all material respects, the Group’s compliance with the Group’s internal control over financial reporting, including the significant processes addressed, control objectives and the approach followed by QFMA’s law and relevant legislations, including the Code as at 31 December 2019. management to conclude its assessment.

For and on behalf of PricewaterhouseCoopers – Qatar Branch The Group is required to report on the suitability of the design and operating effectiveness of internal controls over financial reporting (“ICOFR”) in Qatar Financial Market Authority registration number 120155 connection with the Governance Code for Companies & Legal Entities Listed on the Main Market (the “Code”) issued by the Qatar Financial Markets Authority’s (QFMA’s) Board pursuant to Decision No. (5) of 2016.

Mohamed Elmoataz We have conducted an evaluation of the design of internal control over financial reporting, as of December 31, 2019, based on the framework and Auditor’s registration number 281 the criteria established in Internal Control – Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Doha, State of Qatar Commission (“COSO”). 18 February 2020

66 Aamal Company Q.P.S.C. Annual Report 2019 67 Strategic Corporate Corporate Financial Board of Directors Report on Internal Controls over Financial Reporting Overview Report Governance Responsibility Statements (continued) Independent Assurance Report on Internal Controls over Financial Reporting Board of Directors’ Assessment of Suitability of Design and Operating Effectiveness of Internal Control over Financial Reporting of Significant Processes Independent Assurance Report to the Shareholders of Aamal Company Q.P.S.C.

2.3. Scope of assessment 31 December 2019 Our internal control framework over financial reporting is the process designed to provide reasonable assurance regarding the reliability of financial Report on the suitability of design and operating effectiveness of internal controls over financial reporting of significant processes as at reporting and the preparation of the Group’s consolidated financial statements for external reporting purposes in accordance with 31 December 2019.

International Financial Reporting Standards (IFRS). ICOFR includes controls over disclosure in the financial statements and procedures designed to Introduction prevent misstatements. In accordance with the requirements of Article 24 of the Governance Code for Companies & Legal Entities Listed on the Main Market (the “Governance Code” or the “Code”) Issued by the Qatar Financial Markets Authority (QFMA) Board pursuant to Decision No. (5) of 2016, we have In assessing suitability of design and operating effectiveness of ICOFR, Management has determined significant processes as those processes in carried out a reasonable assurance engagement over the accompanying “Board of Directors’ Assessment of Internal Control over Financial respect of which misstatement in the stream of transactions including those caused by fraud or error would impact the financial statement Reporting of Significant Processes” – as presented in the Corporate Governance section of the Annual Report of Aamal Company Q.P.S.C. (the amounts, including those caused by fraud or error would reasonably be expected to impact the decisions of users of the financial statements. “Company”) and its subsidiaries (together the “Group”) as at 31 December 2019, based on the framework issued by the Committee of Sponsoring Organisations of the Treadway Commission “COSO framework”. The significant processes of the Group at 31 December 2019 are: revenue and receivables, investments properties, purchasing, payables and payments, cash and treasury management, property and equipment management, inventory management, human resources and payroll, entity level controls, information technology, and general ledger and financial reporting. Responsibilities of the directors and those charged with governance The Board of Directors of the Group is responsible for presenting the accompanying “Board of Directors’ Assessment of the Suitability of Design and 2.4. External auditors Operating Effectiveness of Internal Controls over Financial Reporting of Significant Processes” report, and the report includes: In accordance with the Code, PricewaterhouseCoopers Qatar Branch, the Group’s independent external audit firm has issued a reasonable • the Board of Directors’ assessment of the suitability of design of internal controls framework over financial reporting; assurance report on Management’s assessment and the suitability of design and operating effectiveness of the Group’s internal control framework • description of the identification of significant process and internal controls over financial reporting: over financial reporting. A process is considered significant if a misstatement due to fraud or error in the stream of transactions or financial statement amount would reasonably be expected to impact the decisions of the users of financial statements. The processes that were determined as significant are: 2.5. Board of Directors’ Conclusion revenue and receivables, investment properties, purchasing, payables and payments, cash and treasury management, property and equipment Based on Management’s assessment, the Board of Directors concluded that, as at 31 December 2019, the Group’s internal control over financial management, inventory management, human resources and payroll, entity level controls, information technology, and general ledger and reporting is appropriately designed and operating effectively to achieve relevant control objectives based on the criteria established in Internal financial reporting (“significant processes”). Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). • the control objectives; including identifying the risks that threaten the achievement of the control objectives; • designing and implementing controls that are suitably designed and operating effectively to achieve the stated control objectives; and

Faisal Bin Qassim Al Thani • identification of control gaps and failures; how they are remediated; and procedures set to prevent such failures or to close control gaps. Chairman of the Board Doha, 18 February 2020 The Group’s Board of Directors is also responsible for establishing and maintaining internal financial controls based on COSO framework selected by them as a suitable criteria for internal control over financial reporting.

These responsibilities include the design, implementation and maintenance of adequate internal financial controls that if operating effectively would ensure the orderly and efficient conduct of its business, including: • adherence to Group’s policies; • the safeguarding of its assets; • the prevention and detection of frauds and errors; • the accuracy and completeness of the accounting records; • the timely preparation of reliable financial information; and • compliance with applicable laws and regulations.

Responsibilities of the Assurance Practitioner Our responsibilities are to express a reasonable assurance conclusion based on our assurance procedures on the accompanying “Board of Directors’ Assessment of Suitability of Design and Operating Effectiveness of Internal Controls over Financial Reporting of Significant Processes” report, as presented in the Corporate Governance section of the Annual Report, based on the COSO framework.

We conducted our engagement in accordance with International Standard on Assurance Engagements 3000 (Revised) ‘Assurance Engagements Other Than Audits or Reviews of Historical Financial Information’ issued by the International Auditing and Assurance Standards Board (‘IAASB’). This standard requires that we plan and perform our procedures to obtain reasonable assurance on the Board of Directors’ assessment of suitability of the design and operating effectiveness of the internal controls over financial reporting of significant processes of revenue and receivables, investment properties, purchasing, payables and payments, cash and treasury management, property and equipment management, inventory management, human resources and payroll, entity level controls, information technology, and general ledger and financial reporting, as presented in the Corporate Governance section of the Annual Report, in all material respects, to achieve the related control objectives stated in the description of the relevant processes by management, based on the COSO framework.

A process is considered significant if a misstatement due to fraud or error in the stream of transactions or financial statement amount would reasonably be expected to impact the decisions of the users of financial statements. For the purpose of this engagement, the processes that were determined as significant are: revenue and receivables, investment properties, purchasing, payables and payments, cash and treasury management, property and equipment management, inventory management, human resources and payroll, entity level controls, information technology, and general ledger and financial reporting.

68 Aamal Company Q.P.S.C. Annual Report 2019 69 Strategic Corporate Corporate Financial Independent Assurance Report on Internal Controls over Financial Reporting Overview Report Governance Responsibility Statements (continued) Independent Assurance Report to the Shareholders of Aamal Company Q.P.S.C.

An assurance engagement to report on the design and operating effectiveness of controls at an organisation involves performing procedures Other information to obtain evidence about the suitability of design and operating effectiveness of the controls. Our procedures on internal controls over financial The Board of Directors is responsible for the other information. The other information comprises the Annual Report (but does not include the reporting included: “Board of Directors’ assessment on the suitability of design and operating effectiveness of internal controls over financial reporting for significant • obtaining an understanding of internal controls over financial reporting for significant processes; processes”, and our report thereon), which we obtained prior to the date of this assurance report. • assessing the risk that a material weakness exists; and Our conclusions on the accompanying “Board of Directors’ assessment of suitability of the design and operating effectiveness of internal controls • testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. over financial reporting for significant processes” do not cover the other information and we do not and will not express any form of assurance conclusion thereon. In carrying out our engagement, we obtained understanding of the following components of the control system:

• Control Environment In connection with our assurance engagement on the accompanying “Board of Directors’ assessment of suitability of the design and operating • Risk Assessment effectiveness of internal controls over financial reporting for significant processes”, our responsibility is to read the other information identified • Control Activities above and, in doing so, consider whether the other information is materially inconsistent with our knowledge obtained in the engagement, or otherwise appears to be materially misstated. • Information and Communication • Monitoring If, based on the work we have performed, on the other information that we obtained prior to the date of this report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the suitability of design and operation, whether due to fraud or error. Our procedures also included assessing the risks that the controls were not suitably designed to achieve Conclusion the related control objectives stated in the accompanying “Board of Directors’ Assessment of Suitability of Design and Operating Effectiveness of the Internal Controls over Financial Reporting of Significant Processes”. Our procedures included testing the operating effectiveness of those In our opinion, based on the results of our reasonable assurance procedures, the “Board of Directors’ Assessment of Suitability of Design and controls that we consider necessary to provide reasonable assurance that the related control objectives were achieved. Operating Effectiveness of the Internal Controls over Financial Reporting of Significant Processes”, based on the COSO framework and as presented in the Corporate Governance section of the Annual Report is presented fairly, in all material respects, as at 31 December 2019. An assurance engagement of this type also includes evaluating Board of Directors’ assessment of the suitability of the control objectives stated therein. It further includes performing such other procedures as considered necessary in the circumstances. For and on behalf of PricewaterhouseCoopers – Qatar Branch Qatar Financial Market Authority registration number 120155 We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion on the Board of Directors’ assessment of the suitability of design and operating effectiveness of the Group’s internal financial controls over financial reporting. Mohamed Elmoataz Our independence and quality control Auditor’s registration number 281 Doha, State of Qatar In carrying out our work, we have complied with the independence and other ethical requirements of the Code of Ethics for Professional 18 February 2020 Accountants issued by the International Ethics Standards Board for Accountants (“IESBA”), which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour and the ethical requirements that are relevant in Qatar. We have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code.

Our firm applies International Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Meaning of internal controls over financial reporting An entity’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with International Financial Reporting Standards (“IFRSs”). An entity’s internal control over financial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the entity; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with the generally accepted accounting principles, and that receipts and expenditures of the entity are being made only in accordance with authorizations of the management of the entity; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the entity’s assets that could have a material effect on the financial statements.

Inherent limitations Non-financial performance information is subject to more inherent limitations than financial information, given the characteristics of the “Board of Directors’ Assessment of Internal Controls over Financial Reporting” report and the methods used for determining such information.

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Furthermore, the controls activities designed, implemented and operated as of 31 December 2019 covered by our assurance report will not have retrospectively remedied any weaknesses or deficiencies that existed in relation to the internal controls over the financial reporting for significant processes prior to the date those controls were placed in operation.

70 Aamal Company Q.P.S.C. Annual Report 2019 71 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

74 Corporate Social Responsibility (CSR) activities 76 Aamal Sustainability Framework and ESG Corporate Disclosures Responsibility

72 Aamal Company Q.P.S.C. Annual Report 2019 73 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Corporate Social Responsibility (CSR) activities

Investor Relations (IR) Conference: Aamal Trading and Distribution: • Aamal supported the 10th Annual Investor Relation Conference. Aamal Trading and Distribution has held the “Checked by Bridgestone” This conference aimed to encourage all listed companies to adopt campaign, where the staff checked the tires of Woqood petrol station best international investor relations and corporate governance visitors free of charge, aiming to raise awareness on the importance of practices. This year, the Conference discussed a number of important tire safety and maintenance. subjects such as environmental, social, governance (ESG), and sustainability communications, measuring IR program effectiveness, Doha Cables: important challenges in disclosure, and integrating IR in public • Doha Cables organized a voluntary blood donation campaign at relations and communications. Mesaieed Factory in partnership with Hamad Medical Corporation (HMC) with the objective to contribute and support the Blood Bank Belgian King’s Day: in Qatar and to raise awareness for blood donation. Hamad Medical • Aamal Company has supported the Belgian King’s Day and Corporation awarded Doha Cables a Certificate of Appreciation for its accompanying activities, organised by the Belgian Embassy. their endeavour during the Blood Donation Campaign. This event highlights and underpins the cultural and commercial • Sponsored the 2019 Institute of Integrated Electrical Engineers, exchange between Belgium and Qatar. Qatar Chapter (IIEE SCQ) for Midyear Conference, Technical Seminar and General Membership Meeting. 1.2 Aamal Company Subsidiaries CSR initiatives: • Sponsored the 2019 Institute of Integrated Electrical Engineers, Aamal Readymix: Qatar Chapter (IIEE SCQ) for 14th Annual Conference and Election Aamal Readymix strictly implements a recycling policy for the waste of 2020 Board of Directors. generated by its factories. The activities include: Family Entertainment Center (Fun City): • Recycling wastewater and re-using it for washing mixer vehicles. • Arranged visits for kids with special needs from Shafallah Center • Segregating solid concrete waste into its ingredients and re-using to enjoy the rides at Fun City between six to eight times a year. them. • Kids with special needs are, allowed to play free of charge at Fun City. • Using oil and filters sent to recycling factories. • Special prices for school trips including meals for the kids. Aamal Readymix has been re-certified for achieving ISO 9001 (Quality Management System), 14001 (Environmental Management System), Aamal will continue to build upon its core values of responsibility and Participants in the “Checked by Bridgestone” campaign at a Woqod Petrol Station. and 18001 (Health and Safety Management Systems) standards, after sustainability, implementing strategies to help address environmental Students at the Gulf English School Career Fair talking to Aamal’s employees. successful audit of the implemented standards. issues, empower people and provide training and safety awareness 1.1 Aamal QPSC Activities and Cultural Exchanges: programs to all its employees and the public. Aamal Cement Industries (ACI): Aamal has supported several activities that aimed to increase awareness of best practice in business, governance and cultural ACI has been re-certified for achieving ISO 9001(Quality Management exchange during the year ended 31 December 2019, which included: System), after successful audit and continuation of 14001 (Environmental Management System), and 18001 (Health and Safety Gulf English School Career Day: Management Systems) standards. • Aamal Company supported Gulf English School’s Annual Career Fair. Ebn Sina Medical: An event vital for networking and knowledge exchange platform, where students are exposed to the dynamic job market and the Ebn Sina Medical has maintained great focus on education through different growing sectors in Qatar. Through this event, students supporting the scholarship program for Pharmacy students at the were also able to explore various career choices and connect with University of Qatar studying for bachelors, masters and PhD degrees. some of the Country’s largest organisations for future employment opportunities. Aamal Services: Aamal Services has reduced the use of plastic and carbon footprint The Eco Dome: through working with suppliers to deliver chemicals in higher • Aamal was one of the supporters of “The Eco Dome”, an environment, concentration and dilution rates thereby using less packaging of plastic. sustainability and recycling public awareness initiative. The campaign Also decreased the use of plastic wrapping and one time use plastic is organised by Elite Paper Recycling; a paper manufacturing company coverings by putting materials in biodegradable boxes. In addition that recycles all types of paper, creating an eco-friendly environmental to this, increased bulk orders to have positive impact on number initiative. As a part of its CSR program, Aamal is always keen on of movements of vehicles to transport chemicals or materials and contributing towards more environmental awareness, and to the increased the utilization of re-filtered water to use in general cleaning. growing local economy.

Sheikh Faisal Bin Qassim Al Thani attending the White Coat Ceremony at Qatar University.

74 Aamal Company Q.P.S.C. Annual Report 2019 75 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Aamal Sustainability Framework and ESG Disclosures

Aamal Q.P.S.C. (“Aamal” or “the Company”) was among the first listed Our Sustainability Framework 1. Business Ethics and Transparency Anti-discrimination companies in Qatar to embrace the Qatar Stock Exchange (QSE) The Sustainability Framework of Aamal reflects the four elements Aamal’s governance framework abides with the provisions of the Aamal Company believes that all employees have the right to ‘Guidance on ESG Reporting’ initiative, encouraging all listed companies of sustainability: Governance Code for Companies and Legal Entities Listed on the Main work in an environment free from discrimination and harassment. to voluntarily report on a set of Environmental, Social, and Governance Market No. (5) of 2016 (the “Code”) issued by Qatar Financial Markets That each employee is entitled to be treated fairly, consistently, (ESG) performance indicators. 1. Business Ethics and Transparency, Authority (“QFMA” or the “Authority”), and the Commercial Companies with dignity and respect. 2. Workplace, Law No. (11) of 2015 (the “Companies Law”). In 2018, our second year of reporting we extended our coverage from 3. Community, and Aamal Company policy prohibits conduct such as discrimination six companies to reach a total of ten. In 2019, our third year of reporting 4. Environment In 2019, and as part of our goal towards full compliance with the and harassment and explains what to do if an employee is a victim or we added another company to reach a total of eleven companies, requirements of Corporate Governance, we completed the design, witness to these behaviours. Aamal Company considers discrimination aiming to gradually expand coverage to include results from all our These four elements support our corporate strategies of value creation implementation and testing of the operational effectiveness of or harassment of any type as unacceptable and behaviour of this nature subsidiary companies over the coming years. in each of our operating divisions, while also considering alignment the company’s Internal Control over Financial Reporting Framework. will not be tolerated. Any employee who discriminates, victimizes or to the four pillars of the Qatar National Vision 2030: economic, social, In addition, we implemented the Whistleblowing Policy as part harasses may be subject to disciplinary action, including dismissal. With Aamal’s Corporate office, the subsidiary companies included human and environmental development. of company’s commitment to apply best Corporate Governance Employees must raise concerns or complaints as soon as an issue arises. in our aggregated disclosure for 2019 are those who reported last practices, emphasize honesty, integrity, ethical dealing, transparency Concerns will be dealt with promptly and confidentially. Employees will year (Doha Cables, Aamal Readymix, Ebn Sina Medical, Aamal Medical Each element of our sustainability framework is comprised of sub-areas and accountability. As part of a greater goal towards full compliance not be victimized or disadvantaged if they make a complaint. Reports and City Center Doha, Aamal Cement Industries, Ci-San Trading, that provide focal themes for developing specific KPIs that help with the requirements of Corporate Governance Code. and investigations of alleged discrimination or harassment will respect Ebn Sina Pharmacy and Foot Care Center) plus one additional new generate financial value for our business as well as economic and social the rights of all people involved. Our grievance procedure is available company, being Aamal ECE (commercially known as Qatar German value for our key stakeholders. Sustainability management helps us to At Aamal, we believe that strong corporate governance is a crucial factor to all employees. It is a formal channel we use to investigate and resolve Mall Management). identify new market opportunities, drive innovation while also saving to achieving high performance and success across all our subsidiary any sort of grievances against the Company or our employees. costs, better understand our stakeholders’ needs, and strengthen our companies, as well as to maintaining investors’ trust. Together, Aamal Q.P.S.C. and the subsidiaries in scope represent over market position and enhancing our competitiveness. The next few Human rights & trafficking 77% of our revenues, 68% of net profit, and 30%1 of our employees. pages will provide an overview of our activities in each of these areas Our Governance Report covers the procedures followed by the Company Aamal respects the human rights of all employees, suppliers, Unless otherwise stated, the numbers presented in this ESG section throughout the year of 2019. to ensure good governance practices. Our Board Charter governs critical contractors and clients, as articulated in the Universal Declaration cover these ten subsidiary companies and Aamal Q.P.S.C. The information governance items including the role of the Board of Directors and the of Human Rights (QSE#16). It is mandatory that this commitment is presented in this report aligns with QSE’s Guidance on ESG Reporting, remit of its three committees – Audit, Executive and the Nomination supported and reflected by our stakeholders and that the adoption throughout the report you will find the relevant QSE indicator stated and Remuneration committees. of human rights guidelines and principles is embedded into all specifically where applicable. our business activities (QSE#18). During our employee orientation All our subsidiary companies and their employees abide by a Code information sessions, every new employee receives training on of Conduct (QSE#30). This also extends to our suppliers – setting our human rights, employee rights, and other related Company policies. high standards and expectations for business integrity throughout our supply chain (QSE#31). We do not tolerate any form of bribery or In 2019, one incident was reported in Doha Cables between two workers corruption in any of our subsidiary companies. Our anti-corruption and the problem was immediately resolved, where the two workers’ policy includes clear anti-corruption rules and guidelines that are contracts were terminated in compliance with the Qatar Labour Law strongly reinforced through awareness raising and training programmes rules and regulations (QSE#17). Our Sustainability Framework for key managers and staff (QSE#32). We also have zero tolerance for human trafficking and all other In 2019, several important developments were implemented to improve related activities that are against basic human rights. We believe our Company’s overall Corporate Governance framework including that all employees have the responsibility to contribute to combating improving the efficiency of Board of Directors and committees, human trafficking and may report, without fear of retaliation, any attracting new highly qualified executive management personnel, sort of activities inconsistent with our policy by directly contacting introducing Board and Committees’ training programs across various our Employee Reporting hotline or emailing the Global Human Business Ethics Workplace Community Environment subjects, enhancing information exchange among Board of Directors Trafficking Hotline. and Executive management and improving organization structure. and Transparency Further governance-related information that is recommended by the QSE Guidance on ESG Reporting can be found in the Governance Section of this report. Ethics Safety Community Work Greener Products

Transparency Health Procurement Energy Governance aspect 2017 2018 2019 QSE KPI # QNV Pillar Accountability Training Youth Emissions Percentage of Board seats taken by women 16% 11% 11% 23 Social

Diversity Water Percentage of Board seats taken by independent directors 0% 33% 33% 24 Social Women Waste

1 This percentage does not reflect a drop in comparison to 2018 report. However, this year Aamal Services was included in the data analysis process.

76 Aamal Company Q.P.S.C. Annual Report 2019 77 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Aamal Sustainability Framework and ESG Disclosures continued

2. Workplace hold CE markings or FDA approvals, and factories where the products are obtained from hold ISO 134858 certifications. In addition, Aamal 1,0922 full time employees work for Aamal and the ten subsidiary is mainly based on the results of the annual Performance Management Medical has a rigorous customer satisfaction process in place, including companies engaged in this ESG disclosure exercise, representing System, particularly targeting the development needs identified. As part regular customer satisfaction surveys. 30% of Aamal’s total workforce (QSE# 10). Their health and safety are of the program, we encourage our employees to continuously acquire off utmost importance, and we are dedicated to ensuring that our new qualifications, specific skills and enhance their competences. They In 2019 only 17 customer complaints were recorded and subsequently employees are not just motivated to do the work but can also can choose from a number of training courses, workshops, on the job addressed, which resulted in 86% and 91% customer satisfaction rate exert their work in a safe and healthy environment. training, self-study programs, seminars and information technology for Doha Cables and Aamal Ebn Sina Medical respectively. trainings. In 2019, each employee on average received 504 hours of To ensure workplace safety, our subsidiary companies and contractors training, which is an increase of more than 30% over 2018 (QSE# 13). Last but not least, Aamal directly contributes to the local economy need to comply with our occupational health policy and safety through the wages and benefits we pay our employees as well as procedures, particularly our industrial manufacturing companies. Aamal is also committed to engaging and motivating its employees Sheikh Faisal Bin Qassim Al Thani at the Qatar University Graduation Ceremony through our supplier choices. In 2019, our total monetary contribution This is why our subsidiary companies Aamal Cement Industries, Aamal and celebrating their successes. Hence, every year Aamal awards an to our employees amounted to 73m QAR (QSE# 11). We also made great Readymix and Doha Cables are OHSAS 18001:20073 certified (QSE#14). ‘Employee of the Year’ for employees in the non-management and efforts in terms of local procurement, in Aamal corporate 97.2% of our Their employees also received more than 5,200 hours of training on HSE non-supervisory positions. The award is presented to the employee who In 2019, amongst others, Aamal sponsored various events, including: procurement came from local suppliers (QSE# 22). related matters in 2019, which increased by more than 160% over the has made an exceptional contribution to the Company in terms of job prior year. Thanks in part to these efforts, we did not encounter any excellence, customer satisfaction, business growth, quality and/or Doha Cables: 4. Environment fatal incidents across the eleven companies included in scope during continuous improvement. • Sponsored Institute of Integrated Electrical Engineers, State of Qatar 2019 (QSE#15). Chapter (IIEE-SCQ) for Midyear Conference, Technical Seminar and Aamal is committed to embed environmental principles and practices in Qatarisation is a strategic initiative by the Government of Qatar to General Membership Meeting held on the 3rd of May 2019 at Rotana all aspects of our operations, to protect the environment and minimise Overall, we consider training and development as an important factor provide employment for its citizens in the private and public sectors and City Center Doha Qatar. our environmental footprint and waste through sound management in contributing not only to employee engagement but also to the overall part of the Qatar National Vision 2030. Aamal supports Qatarisation of natural resources including water, energy, materials, and biodiversity success of our Aamal Q.P.S.C. and its operating subsidiaries. To provide (QSE# 20), which aims to develop skilled, educated, and competent Qataris In the area of education, individual subsidiary companies provided (QSE#3-9). our employees with the opportunity to develop their knowledge and to assist the continuous development of a skilled Qatari workforce. Our different opportunities for learning and development, including: skills and to further advance within their companies, we developed a programmes ensure that Qataris are identified and appropriately trained To comply with all environmental regulations and guidelines by comprehensive Training & Development Program Policy. The program and developed in line with Aamal’s strategic objectives. • Ebn Sina Medical continues its focus on education through the the State of Qatar, three of our reporting industrial manufacturing adoption of two programs: companies, Doha Cables, Aamal Readymix and Aamal Cement Social aspect 2017 2018 2019 QSE KPI # QNV5 Pillar –– Support of pharmacy students at the University of Qatar and Industries, follow ISO 140019. Aamal also keeps internal Environmental the College of the North Atlantic, through the provision of Number of full time employees (#) 1,000 1,138 1,071 10 Human Impact Registers to routinely evaluate impacts on the environment collaborative training work experience opportunities within (QSE#1). Zero environment-related fines were incurred by any of our Percentage of women in the workforce (%) 5.6% 6.3% 7.84% 19 Social the Ebn Sina Pharmacy chain operations in 2019 (QSE#2). –– Support of the scholarship program for the Bachelor’s, Master’s Percentage of Qatari nationals in the workforce (%) 0.0% 0.0% 0.0% 20 Human and PhD Pharmacy students at Qatar University In 2019, a number of environmental improvement initiatives were Percentage of employee turnover (%) 4.1% 8.3% 17.37% 12 Human undertaken by our subsidiary companies. Of our eleven reporting Moreover, Doha Cables and Elsewedy Cables staff accompanied by their companies, those with the biggest environmental impact, particularly Hours of training per employee per year (#) 11 38 50 13 Human families celebrated Qatar’s National Sports Day on February 12, 2019 around energy usage, are City Center Doha, Aamal Readymix, Doha Total Number of Employees and Contractors Recordable Injuries (#) 4 4 1 15 Human at Al Wakra Sports Club. The program featured a variety of sporting Cables and Aamal Cement Industries. activities such as Volleyball, Badminton, Football and Marathon and 6 Total amount of employee wages and benefits (QAR) 57,548,589 71,796,707 73,087,844 11 Human the invitation was public City Center Doha is continuously working on reducing its energy consumption, and was able to save more than 2% of electricity, 10% of In addition, to events sponsoring, four of our companies’ core activities 3. Community and Society water and an increase of 7% in the use of natural gas, compared to 2018 and sole purpose is people’s health – Ebn Sina Medical, Aamal Medical, consumption. Several initiatives in that respect have been completed Aamal plays a vital role in the development of the country and the Foot Care Center and Ebn Sina Pharmacy. Their business is the timely while others are currently investigated or planned for: society through engagement in several corporate activities to improve provision of pharmaceutical supplies and medical equipment to Qatar’s • The 37 Carrier chillers are continuously monitored which enables the environment, benefit the community and develop the company’s medical facilities, pharmacies, and ultimately the citizens of our Qatar. us to meet the required temperature set point with as few chillers operational efficiency. running as possible to save on energy consumption. To ensure overall product quality and safety and ultimately customer Aamal Company has supported several activities that aimed to health, Ebn Sina Medical performs regular internal and external audits, • To meet the requirements of Civil Defence an additional Circa 100 increase awareness of best business practice, governance, and cultural provides training for employees, and follows the risk management Fire Rated doors were installed in Fire Exit Passageways throughout exchange. Total community investments amounted to 120,000 procedures of the Good Distribution Practice guidelines. Ebn Sina the Mall. QAR (QSE# 21) in 2019. Medical has obtained the GDP certification, in Feb 2019 and it will • In the Ground Floor Car Park, we have removed approximately 1,400 be valid for three years. old Fluorescent light fittings and replacing them with 900 new LED lights which will achieve improved lighting levels yet reduce energy Highlight: Aamal Medical has similar processes in place, following ISO 9001:20157 costs by approximately QR 200,000 per annum. This project is well Doha Cables has organized a voluntary blood donation campaign Quality Management System. All products distributed by Aamal Medical underway and should be completed by February 2020. at Mesaieed Factory in partnership with Hamad Medical 2 Excluding ECE Corporation (HMC) January 21, 2019. The campaign’s objective was 3 OHSAS 18001:2007 Occupational Health and Safety Management Certification to contribute and support the Blood Bank in Qatar and to raise is an international standard which provides a framework to identify, control awareness blood donation. Hamad Medical Corporation awarded and decrease the risks associated with health and safety within the workplace. 7 ISO 9001:2015 is a non-industry specific certification and is intended for any organization that wants to implement and maintain a quality management system. Doha Cables a “Certificate of Appreciation” for their endeavour 4 Excluding ECE and Ci-San Trading Certifications are issued by third party certifying bodies. 5 Qatar National Vision 2030 during the Blood Donation Campaign 8 ISO 13485:2016 medical devices — quality management systems — requirements for regulatory purposes 6 Excluding ECE and Doha Cables 9 ISO 14001:2015 environmental management systems — requirements with guidance for use

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Aamal Sustainability Framework and ESG Disclosures continued

• The existing 7 Stand-by Diesel Generators on site at City Center Doha In general, over the past year, Aamal Readymix’s total electricity Appendix 1: ESG Reporting Against Qatar Stock Exchange Guidance for ESG Reporting were filled with fuel manually, which is not compliant with the new consumption has decreased by 7.6%, thanks to our renewable energy safety codes. Accordingly, a new Bulk Diesel Storage Tank has been production and our responsible energy saving policy in place. QSE KPI # ESG Key Performance Indicators Measurement annual, unless indicated otherwise QNV Pillar Page #/Comment installed with pumps & pipework to automatically keep the generator fuel tanks full at all times. This will guarantee the safety of In addition, Aamal Readymix installed two recycling plants at its Environmental our employees from unfortunate accidents while filling the tanks industrial area and Bu-Qalila factory locations to process and segregate 1 Environmental Policy Does the company publish and follow an environmental policy? Environment Yes all the solid waste generated during its operations. Furthermore, a with fuel, zero spillage to protect the environment, safeguard 2 Environmental Impacts Any legal or regulatory responsibility for an environmental impact? Environment No business continuity whilst meeting all the relevant regulations. This water reclaim system is in place to utilize the wastewater produced 3 Energy Consumption Total amount of energy usage in KWh or GJ Environment page 80 project is well underway and should be completed by February 2020. during the process of vehicle washing. That resulted in a 20% reduction of the generated wastewater. 4 Energy Intensity Amount of energy used per m3 of space, and per FTE Environment page 80 • The existing underground LPG Tanks are nearing 20 years old and therefore need to be replaced. This project is well underway and 5 Carbon/GHG Emissions Total amount of Carbon and Green House Gas emissions in metric tons Environment page 80 In 2019, Aamal Readymix produced special concrete that is based on should be completed by March 2020. This will safeguard shoppers 6 Primary Energy Source Specify the primary source of energy used by the company Environment Electricity recycled cementitious materials and having very high strength and and employees from gas leakage, air pollution and protect assets. durability. The main ingredients of this concrete are PFA10, GGBS11 and 7 Renewable Energy Intensity Specify the percentage of energy used that is generated from renewable Environment page 80 • All F&B outlets in City Center that use cooking oil continue to recycle Micro silica, which are process leftovers of the steel industry. Aamal sources the used oil. Readymix won the Annual Sustainability award by Qatar Green Building 8 Water Management Total amount of water consumption, and details in respect of Environment page 80 • IT Department is considering the following innovations: providing Council for this new product. recycling if any, in m3 digital signature & digital archiving of all documents, double-sided 9 Waste Management Total amount of waste generated, recycled or reclaimed, by type and weight Environment page 80 printing on paper, recycling ink cartridges, power shut down of During 2019, Aamal Cement Industries paper consumption increased computers at night, using shared printers for each organization or by 22% as compared with the paper usage in 2018. This was mainly due Social department with limited access and control, print default to black to the high number of biddings’ documents submitted for upcoming 10 Full Time Employees Number of full time employees Human page 78 and white & exchanging soft copies. projects. Aamal Cement Industries reduced its total hazardous waste 11 Employee Benefits Total amount of employee wages and benefits Human page 78 by 20% because the oil waste was handed over to oil recycling plant 12 Employee Turnover Rate Percentage of employee turnover Human page 78 Aamal Ready Mix’s primary energy source is still electricity; however, re-use or disposal. they have started using Solar power units at a new factory in Bu-Qalila. 13 Employee Training Hours Total number of hours of training for employees divided by the number Human page 78 The solar power units cover the electricity for lighting at the factory, Doha Cables have used in its factory, around 700 high bay LED bulbs of employees weigh bridge system, CCTV system, security cabin and office space. (150 Watts), which saved around 62 % of power consumption and 14 Health Does the company publish and follow a policy for occupational Human Yes resulted in electricity consumption decrease by 17% compared to 2018. and global health issues? 15 Injury Rate Total number of injuries and fatal accidents relative to the number of FTEs Human page 78

Environmental aspect 2017 2018 2019 QSE KPI # QNV Pillar 16 Human Rights Policy Disclosure and adherence to a Human Rights Policy Social page 77 Total amount of energy usage in kWh 135,024 146,671 102,46412 3 Environment 17 Human Rights Violations Number of grievances about human rights issues filed, Social page 77 addressed and resolved Energy Intensity (kWh/m3) 171 172 14613 4 Environment 18 Child & Forced Labour Does the company prohibit the use of child or forced labour Social Yes Total greenhouse gas emissions (tonnes) 56,763 60,609 76,675 5 Environment throughout the supply chain? 19 Women in the Workforce Percentage of women in the workforce Social page 78 Primary source of energy used by the company Electricity Electricity Electricity 6 Environment 20 Qatarisation Percentage of Qatari nationals in the workforce Human page 78 Percentage of energy used from renewable sources 0.0% 0.0% 0.01%14 7 Environment 21 Community Work Number of hours spent, and/or other community investments Social page 78 Total water consumption (m3) 1,571,17615 1,477,91916 225,31417 8 Environment made as a percentage of pretax profit

Total waste recycled or reused (tonnes) 11,628 16,173 6,29518 9 Environment 22 Local Procurement Percentage of total procurement from local suppliers Economic page 79 Governance Total wastewater generated (m3) 17,368 19,839 15,779 9 Environment 23 Board – Diversity Percentage of Board seats taken by women Social page 77 Total non-hazardous waste produced (tonnes) 36,156 37,884 26,94919 9 Environment 24 Board – Independence Percentage of Board seats taken by independent directors Social page 77 3 20 Total amount of wastewater re-used (m ) 5,093 6,651 6,295 9 Environment 25 Board – Separation of Powers Specify whether the CEO is allowed to sit on the Board, act as the Social Yes Chairman, or lead committees 26 Voting Results Disclosure of the voting results of the latest AGM Social Announced on QSE’s website 10 Pulverised fuel ash (PFA) 27 CEO Pay Ratio Ratio of CEO salary and bonus against the median FTE salary and bonus Social 7:1 11 Ground Granulated Blast Furnace Slag 12 Excluding ECE 28 Gender Pay Ratio Ratio of median male salary to median female salary Social 2:1 13 Excluding ECE 29 Incentivised Pay Specify the links between (executive) remuneration and performance targets Economic page 78 14 Aamal Readymix are using solar power units in Bu-Qalila factory. 15 This calculation is also a correction for 2018 report calculation. 30 Ethics Code of Conduct Does the company publish and follow an Ethics Code of Conduct? Social Yes 16 This calculation is also a correction for 2018 report calculation. 31 Supplier Code of Conduct Does the company publish and follow a Supplier Code of Conduct? Social Yes 17 Excluding ECE 18 Includes only Aamal Cement Industries and Aamal Readymix 32 Bribery/Anti-Corruption Code Does the company publish and follow a Bribery/Anti-Corruption Code? Social Yes 19 The figure for 2019 is marginally lower, because the figure was based on the size of the Garbage skips removed (2 per day) but with the new Garbage Company, although we still have 2 x skips on site, only remove 1 skip per day, on alternate days. General ESG Reporting 20 Only for Aamal Readymix and Aamal Cement Industries 33 Sustainable Reporting Does the company publish a GRI21, CDP22, SASB23, IIRC24 or UNGC25 report? Social No 21 Global Reporting Initiative Frameworks 22 Carbon Disclosure Project 23 Sustainability Accounting Standards Board 34 External Assurance Are the company’s ESG disclosures assured by an independent third party? Social No 24 International Integrated Reporting Council 25 United Nations Global Compact

80 Aamal Company Q.P.S.C. Annual Report 2019 81 Strategic Corporate Corporate Financial Overview Report Governance Responsibility Statements

Aamal Sustainability Framework and ESG Disclosures continued

Appendix 2: Data coverage The below table provides an overview of reporting from all eleven companies.

Note 1: Column for Ebn Sina Medical includes data from Ebn Sina Pharmacy and Foot Care Center. Note 2: City Center Doha includes data from Aamal ECE. City Aamal Center Aamal City Doha Ready Pharma Aamal Doha and Aamal Cement Ci-San Aamal Center Aamal Key Performance Indicator Cables mix Group* Medical Aamal ECE Q.P.S.C. Industries Trading Doha Ready Pharma Aamal Doha and Aamal Cement Ci-San Key Performance Indicator Cables mix Group* Medical Aamal ECE Q.P.S.C. Industries Trading Specify the links between (executive) remuneration and performance N/A N/A N/A N/A N/A F N/A N/A

ENVIRONMENT Does the company publish and follow yes yes yes yes yes yes yes yes an Ethics Code of Conduct? Does the company publish and follow an environmental policy? yes yes no no no no yes no Does the company publish and follow yes yes yes yes yes yes yes yes Any legal or regulatory responsibility for an environmental impact? F F F F P7 P8 F N a Supplier Code of Conduct? Total amount of energy usage in MWh F F F N F P8 F P8 Does the company publish and follow a Bribery/Anti-Corruption Code? yes yes yes yes yes yes yes yes Energy Intensity (MWh/m3) F F F N N P8 F P8 Does the company publish a GRI, CDP, SASB, IIRC or UNGC report? no no no no no no no no Total amount of Green House Gas emissions (tonnes of CO eq) F F F N F P8 F P8 2 Are the company’s ESG disclosures assured no no no no no no no no Primary source of energy used by the company F F F N F P8 F N by an independent 3rd party?

Specify the percentage of energy used from renewable sources P8 F F F N P7 N N Legend: Total amount of water consumption (m3) F F F N F P8 F N N/A Not applicable Total amount of waste recycled or reused (tonnes) P7 F F F N P7 N N F Full reporting for the years (2017, 2018 & 2019) P7 Partial reporting – information for 2017 only Total amount of waste water generated (m3) F F N P7 N P7 F N P8 Partial reporting – information for 2018 only Total amount of hon-hazardous waste produced (tonnes) F F F F F N F N P9 Partial reporting – information for 2019 only P7,8 Partial reporting – information for 2017 & 2018 only Total amount of waste water re-used (m3) F F N P7 F P7 F N P8,9 Partial reporting – information for 2018 & 2019 only SOCIAL N No reporting on that KPI

Number of full time employees F F F F F F P8 P8 * Pharma Group includes Ebn Sina Medical, Ebn Sina Pharmacy and Foot Care Center Total amount of employee wages and benefits, (in QAR) N F F F F F F P8

Percentage of employee turnover F P8 F F F F N P8

Hours of training per employee per year F P8 F F F F P8 N

Does the company follow a policy for occupational health? yes yes no no no no yes no

Number of Employees and Contractors with Recordable Injuries F F F F F F F N

Disclosure and adherence to a Human Rights Policy yes yes yes yes yes yes yes yes

Number of grievances about human rights issues filed P7 F F F F F F P8

Does the company prohibit the use of child or forced labour by suppliers? yes yes yes yes yes yes yes yes

Percentage of women in the workforce (%) F F F F F F P8 N

Percentage of Qatari nationals in the workforce (%) F F F F F F P8 N

Community investments and initiatives (QAR) N N F P7 N P8 N N

Amount of total procurement from local suppliers (%) N F F P7 F F F P8

GOVERNANCE

Percentage of Board seats taken by women N/A N/A N/A N/A N/A F N/A N/A

Percentage of Board seats taken by independent directors N/A N/A N/A N/A N/A F N/A N/A

Is the CEO allowed to sit on the Board? On Committees? N/A N/A N/A N/A N/A F N/A N/A

Disclosure of the voting results of the latest AGM N/A N/A N/A N/A N/A F N/A N/A

Ratio of CEO salary against the median FTE salary N/A N/A N/A N/A N/A F N/A N/A

Ratio of median male salary to median female salary N/A N/A N/A N/A N/A F N/A N/A

82 Aamal Company Q.P.S.C. Annual Report 2019 83 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

86 Independent Auditor’s Report Financial 90 Financial Statements and Notes Statements

84 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 85 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Independent Auditor’s Report to the Shareholders of Aamal Company Q.P.S.C.

Report on the audit of the consolidated financial statements Key audit matter How our audit addressed the Key audit matter

Our opinion Valuation of investment properties Our audit procedures in relation to the valuation of investment In our opinion, the consolidated financial statements of Aamal Company Q.P.S.C. (the ‘Company’) and its subsidiaries (together the ‘Group’) present As mentioned in Note 5 of the consolidated financial statements, the properties included: fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2019 and its consolidated financial performance Group has investment properties recorded under the fair value model –– Obtaining and reviewing the latest valuation reports prepared and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (‘IFRS’). and the fair value gains or losses are recorded in the consolidated by the external valuers, and assessing their independence and statement of profit or loss and other comprehensive income. competencies; What we have audited –– Verifying on test basis the key assumption (i.e. useful life of the asset, The Group’s consolidated financial statements comprise: The Group’s investment properties are based in the State rebuild cost and the comparable market rate for the land value), of Qatar. The carrying value of investment properties in the –– the consolidated statement of financial position as at 31 December 2019; valuation methodologies adopted, and the appropriateness of the consolidated statement of financial position is QR 7,208,113,690 as –– the consolidated statement of profit or loss and other comprehensive income for the year then ended; valuation outcomes; at 31 December 2019. –– the consolidated statement of changes in equity for the year then ended; –– Using our own property valuation experts to independently review the appropriateness of the valuation methodologies adopted and –– the consolidated statement of cash flows for the year then ended; and The valuations of properties were carried out by independent third the comparable evidence for all valuation assumptions to ensure –– the notes to the consolidated financial statements, which include a summary of significant accounting policies. party valuers with experience of the local market in which the properties are held. alignment to the real estate market; –– Comparing useful life of the assets, depreciated build rates and the Basis for opinion The fair value of the investment properties were determined as follows: land rates against external market data, where available and re- We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further –– Vacant land: Comparable market approach; calculating the external valuations using our own valuation models; described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report. and –– Income generating assets: Depreciated replacement cost method –– Evaluating the sensitivity analysis performed by management and We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. and comparable market approach; and the disclosures relating to the valuation. –– Properties under development: Cost method where fair value cannot Independence be reliably measured. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) and the ethical requirements that are relevant to our audit of the consolidated financial statements in the State of Qatar. In determining the property’s value, the valuers have taken into account We have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. property-specific information, such as useful life and comparable market rate to arrive at the final valuation. Our audit approach Overview We focused on this area because the valuation of the Group’s investment property portfolio is subject to significant judgement, assumptions As part of designing our audit, we determined materiality and assessed the risks of material misstatement and estimates. in the consolidated financial statements. In particular, we considered where the Directors made subjective The total assets of the Group amount to QR 9,020,633,852 out of which Materiality judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk the investment properties account for 80% of the total assets. The of management override of internal controls, including among other matters consideration of whether there reported results and financial position of the Group could be materially was evidence of bias that represented a risk of material misstatement due to fraud. affected if the estimates and judgements change. Group Scoping We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the Group, the Other information Key audit accounting processes and controls, and the industry in which the Group operates. The directors are responsible for the other information. The other information comprises Board of Directors’ Report and the complete matters Annual Report.

Our opinion on the consolidated financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon. Key audit matter In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, in the audit, or otherwise appears to be materially misstated. and in forming our opinion thereon, and we do not provide a separate opinion on these matters. If, based on the work we have performed, on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

86 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 87 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Independent auditor’s report to the shareholders of Aamal Company Q.P.S.C. continued

Responsibilities of management and those charged with governance for the consolidated financial statements Report on other legal and regulatory requirements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS and with the Further, as required by the Qatar Commercial Companies Law number 11 of 2015, we report that: requirements of the Qatar Commercial Companies Law number 11 of 2015, and for such internal control as management determines is necessary to –– We have obtained all the information we considered necessary for the purpose of our audit; enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. –– The Company has carried out a physical verification of inventories at the year-end in accordance with observed principles; In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, –– The Company has maintained proper books of account and the consolidated financial statements are in agreement therewith; disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to –– The financial information included in the Board of Directors’ Report is in agreement with the books and records of the Company; and liquidate the Group or to cease operations, or has no realistic alternative but to do so. –– Nothing has come to our attention, which causes us to believe that the Company has breached any of the provisions of the Qatar Commercial Companies Law number 11 of 2015, or of its Articles of Association, which would materially affect the reported results of its operations or its Those charged with governance are responsible for overseeing the Group’s financial reporting process. consolidated financial position as at 31 December 2019.

Auditor’s responsibilities for the audit of the consolidated financial statements For and on behalf of PricewaterhouseCoopers – Qatar Branch Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material Qatar Financial Market Authority registration number 120155 misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to Mohamed Elmoataz influence the economic decisions of users taken on the basis of these consolidated financial statements. Auditor’s registration number 281 Doha, State of Qatar As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: 18 February 2020 –– Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. –– Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. –– Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. –– Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. –– Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. –– Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

88 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 89 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Consolidated Financial Statements for the Year ended 31 December 2019 Consolidated Financial Statements for the Year ended 31 December 2019 (all amounts are expressed in Qatari Riyals unless otherwise stated) (all amounts are expressed in Qatari Riyals unless otherwise stated)

Consolidated statement of financial position Consolidated statement of profit or loss and other comprehensive income at 31 December for the year ended 31 December

Notes 2019 2018 Notes 2019 2018 Assets Revenues 17 1,294,116,605 1,286,551,774 Non-current assets Direct costs 18 (860,103,578) (819,355,799) Retention receivables 8 5,712,228 6,036,326 Gross profit 434,013,027 467,195,975 Equity-accounted investees 4 294,656,891 324,124,534 Investment properties 5 7,208,113,690 7,168,589,734 Other income 19 8,004,104 11,414,871 Property, plant and equipment 6 292,844,360 315,912,124 Marketing and promotion expenses (6,752,739) (7,404,681) Right-of-use assets 3 84,022,917 – General and administrative expenses 20 (134,944,046) (119,321,819) Net impairment losses on financial assets 8 (14,515,887) (2,997,706) Total non-current assets 7,885,350,086 7,814,662,718 Operating profit for the year 285,804,459 348,886,640 Current assets Cash and bank balances 7 519,317,377 605,895,048 Finance income 2,548,527 1,149,668 Trade and other receivables 8 413,063,705 405,154,154 Finance costs 22 (28,487,328) (2,472,879) Amounts due from related parties 9 38,922,231 48,963,825 Finance costs – net (25,938,801) (1,323,211) Inventories 10 163,980,453 171,478,952 Share in results of equity-accounted investees 4 62,265,318 100,027,580 Total current assets 1,135,283,766 1,231,491,979 Profit for the year 322,130,976 447,591,009 Total assets 9,020,633,852 9,046,154,697 Other comprehensive income – – Total comprehensive income for the year 322,130,976 447,591,009 Equity and liabilities Equity Attributable to: Share capital 11 6,300,000,000 6,300,000,000 Equity holders of the parent 322,266,953 445,270,636 Legal reserve 12 658,717,197 636,791,992 Non-controlling interests (135,977) 2,320,373 Treasury shares – – 322,130,976 447,591,009 Retained earnings 984,930,201 1,070,645,127 Basic and diluted earnings per share Equity attributable to equity holders of the parent 7,943,647,398 8,007,437,119 (attributable to equity holders of the parent) Non-controlling interests 11.1 37,130,660 41,170,165 (expressed in QR per share) 23 0.05 0.07 Total equity 7,980,778,058 8,048,607,284 The attached notes 1 to 32 are an integral part of these consolidated financial statements. Liabilities Non-current liabilities Borrowings 13 400,203,929 514,887,993 Lease liabilities 3 68,676,670 – Employees’ end of service benefits 14 26,093,077 26,204,583 Total non-current liabilities 494,973,676 541,092,576 Current liabilities Accounts payable and accruals 15 400,469,842 353,914,426 Amounts due to related parties 16 13,333,177 16,874,935 Borrowings 13 114,719,958 85,665,476 Lease liabilities 3 16,359,141 – Total current liabilities 544,882,118 456,454,837 Total liabilities 1,039,855,794 997,547,413 Total equity and liabilities 9,020,633,852 9,046,154,697

The attached notes 1 to 32 are an integral part of these consolidated financial statements.

The consolidated financial statements were authorized for issue by the Board of Directors on 18 February 2020 and were signed on its behalf by:

Sheikh Faisal Bin Qassim Al Thani Sheikh Mohamed Bin Faisal Al Thani Imran Chughtai Chairman Vice Chairman and Managing Director Chief Financial Officer

90 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 91 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Consolidated Financial Statements for the Year ended 31 December 2019 Consolidated Financial Statements for the Year ended 31 December 2019 (all amounts are expressed in Qatari Riyals unless otherwise stated) (all amounts are expressed in Qatari Riyals unless otherwise stated)

Consolidated statement of changes in equity Consolidated statement of cash flows for the year ended 31 December Attributable to equity holders of the parent Share Legal Treasury Retained Non-controlling Total Notes 2019 2018 capital reserve shares earnings Total interests equity Cash flows from operating activities Balance at 31 December Profit for the year 322,130,976 447,591,009 2017 as originally Adjustments for: presented 6,300,000,000 592,264,928 (739,279) 1,115,338,115 8,006,863,764 39,680,909 8,046,544,673 Depreciation 6 30,562,665 27,364,704 Changes in accounting Amortisation of right-of-use assets 10,899,774 – policy – – – (56,072,365) (56,072,365) (831,117) (56,903,482) Net movement in provision for employees’ end of service benefits 14 1,535,389 945,346 Restated total equity at Net impairment losses on financial assets 8 14,515,887 2,997,706 1 January 2018 6,300,000,000 592,264,928 (739,279) 1,059,265,750 7,950,791,399 38,849,792 7,989,641,191 Loss on disposal of property, plant and equipment 19 23,950 – Profit for the year – – – 445,270,636 445,270,636 2,320,373 447,591,009 Other adjustments (5,734,548) – Other comprehensive Provision for obsolete and slow-moving inventories 10 1,750,088 1,228,671 income – – – – – – – Interest income (2,548,527) (1,149,668) Finance costs 25,213,599 2,472,879 Total comprehensive Interest expense on leases 22 3,273,728 – income for the year – – – 445,270,636 445,270,636 2,320,373 447,591,009 Share in results of equity-accounted investees 4 (62,265,318) (100,027,580) Transfer to legal reserve – 44,527,064 – (44,527,064) – – – Operating profit before working capital changes: 339,357,663 381,423,067 Contribution to social and Inventories 5,748,411 (25,817,715) sports fund (Note 28) – – – (11,131,766) (11,131,766) – (11,131,766) Trade and other receivables (29,479,600) 22,781,204 – 44,527,064 – (55,658,830) (11,131,766) – (11,131,766) Accounts payable and accruals 42,050,026 (7,894,087) Transactions with owners Net movement in amounts due from and due to related parties (2,281,442) 89,067,236 in their capacity as Cash generated from operations 355,395,058 459,559,705 owners Finance costs paid (25,213,599) (2,472,879) Dividends (Note 27) – – – (378,000,000) (378,000,000) – (378,000,000) Reissue of treasury shares – – 739,279 (232,429) 506,850 – 506,850 Net cash generated from operating activities 330,181,459 457,086,826 Total transactions with Cash flows from investing activities owners – – 739,279 (378,232,429) (377,493,150) – (377,493,150) Interest income received 2,548,527 1,149,668 Proceeds from disposal of property, plant and equipment 14,964 233,676 Balance at 31 December Dividends received from equity-accounted investees 105,795,817 97,917,664 2018 6,300,000,000 636,791,992 – 1,070,645,127 8,007,437,119 41,170,165 8,048,607,284 Additions to investment properties 5 (39,523,956) (276,375,007) Balance at 1 January 2019 6,300,000,000 636,791,992 – 1,070,645,127 8,007,437,119 41,170,165 8,048,607,284 Additions to property, plant and equipment 6 (8,804,292) (13,202,166) Profit for the year – – – 322,266,953 322,266,953 (135,977) 322,130,976 Other comprehensive Net cash generated from/(used in) investing activities 60,031,060 (190,276,165) income – – – – – – – Cash flows from financing activities Total comprehensive Changes in restricted deposits 1,391,537 (3,085,191) income for the year – – – 322,266,953 322,266,953 (135,977) 322,130,976 Principal elements of lease payments (13,160,608) – Repayments of borrowings (85,629,582) (240,612,517) Transfer to legal reserve – 21,925,205 – (21,925,205) – – – Proceeds from borrowings – 607,442,500 Contribution to social and Dividends paid 27 (378,000,000) (378,000,000) sports fund (Note 28) – – – (8,056,674) (8,056,674) – (8,056,674) Reissue of treasury shares – 506,850 – 21,925,205 – (29,981,879) (8,056,674) – (8,056,674) Net cash used in financing activities (475,398,653) (13,748,358) Transactions with owners Net (decrease)/increase in cash and cash equivalents (85,186,134) 253,062,303 in their capacity as owners Cash and cash equivalents at beginning of year 599,889,857 346,827,554

Dividends (Note 27) – – – (378,000,000) (378,000,000) – (378,000,000) Cash and cash equivalents at end of year 7 514,703,723 599,889,857 Other adjustments – – – – – (3,903,528) (3,903,528)

Total transactions with The attached notes 1 to 32 are an integral part of these consolidated financial statements. owners – – – (378,000,000) (378,000,000) (3,903,528) (381,903,528) Balance at 31 December 2019 6,300,000,000 658,717,197 – 984,930,201 7,943,647,398 37,130,660 7,980,778,058

The attached notes 1 to 32 are an integral part of these consolidated financial statements.

92 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 93 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Consolidated Financial Statements for the Year ended 31 December 2019 Consolidated Financial Statements for the Year ended 31 December 2019 (all amounts are expressed in Qatari Riyals unless otherwise stated) (all amounts are expressed in Qatari Riyals unless otherwise stated)

Notes to the consolidated financial statements

1. Corporate information and principal activities 2.2. Principles of consolidation and equity accounting Aamal Company was formed on 13 January 2001 as a private shareholding company under the Commercial Registration Number 23245 in the State of 2.2.1 Business combinations Qatar. On 12 July 2007, the shareholders resolved to transform Aamal into a Qatari Public Shareholding Company (Q.P.S.C.) (the ‘Company’ or ‘Parent (a) Subsidiaries Company’). Accordingly, the Company was listed on Qatari Stock Exchange on 5 December 2007. The Company’s registered office is at P.O. Box 22477, Doha, Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is State of Qatar. exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are The principal business activities of the Company and its subsidiaries (collectively the ‘Group’) are disclosed in Note 2.2.4 of the consolidated deconsolidated from the date that control ceases. financial statements. The acquisition method of accounting is used to account for business combinations by the Group. The ultimate parent and controlling shareholder of the Company is Al Faisal Holding Company W.L.L., which is controlled by Sheikh Faisal Bin Qassim Al Thani. The consideration transferred for the acquisition of a subsidiary comprises the fair value of the assets transferred, the liabilities incurred to the former owners of the acquiree, the equity interests issued by the Group, the fair value of any asset or liability resulting from a contingent The consolidated financial statements were authorised for issue by the representatives of the Board of Directors of Aamal Company Q.P.S.C. on consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Identifiable assets acquired and liabilities and 18 February 2020. contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the 2. Basis of preparation and consolidation non‑controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets. The consolidated financial statements comprise the financial statements of Aamal Company Q.P.S.C. (the ‘Company’) and its subsidiaries. Acquisition-related costs are expensed as incurred. 2.1. Basis of preparation The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as If the business combination is achieved in stages, the carrying value of the acquirer’s previously held equity interest in the acquiree is re-measured issued by International Accounting Standards Board (IASB) and interpretations issued by the IFRS Interpretations Committee (IFRS IC) applicable to to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognised in the consolidated statement of profit or companies reporting under IFRS. loss and other comprehensive income.

The consolidated financial statements have been prepared under the historical cost convention, except for investment properties which have been Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair measured at fair value. value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IFRS 9 either in profit or loss or as a change to other comprehensive income. The consolidated financial statements have been presented in Qatari Riyals (QR), which is the Group’s functional and presentation currency and have been rounded to the nearest Qatari Riyal. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.

The preparation of consolidated financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred, the amount of any non-controlling requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of interest in the acquiree and the acquisition date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net judgment or complexity, or areas where assumptions and estimates are significant to consolidated financial statements are disclosed in Note 32. assets acquired. If the total of consideration transferred, non-controlling interest recognized and previously held interest measured at fair value is less than the fair value of the net assets of the subsidiary acquired, in the case of a bargain purchase, the difference is recognized directly in the 2.1.1 New and amended standards adopted by the Group profit or loss. The Group has applied the following standards and amendments for the first time for their annual reporting period commencing 1 January 2019: For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the CGUs or group of CGUs that is –– IFRS 16 Leases expected to benefit from the synergies of the combination. Goodwill impairment testing is undertaken annually. Any impairment is recognized –– Prepayment Features with Negative Compensation – Amendments to IFRS 9 immediately as an expense and is not subsequently reversed. –– Long-term Interests in Associates and Joint Ventures – Amendments to IAS 28 Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also –– Annual Improvements to IFRS Standards 2015 – 2017 Cycle eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been –– Plan Amendment, Curtailment or Settlement – Amendments to IAS 19 changed where necessary to ensure consistency with the policies adopted by the Group. –– Interpretation 23 Uncertainty over Income Tax Treatments Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statements of profit or loss and other The Group had to change its accounting policies as a result of adopting IFRS 16 on 1 January 2019. This is disclosed in Note 3. The other amendments comprehensive income, changes in equity and financial position respectively. listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods. (b) Changes in ownership interests in subsidiaries without change of control Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as transactions 2.1.2 New standards and interpretations not yet adopted with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2019 reporting periods and carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded have not been early adopted by the Group. These standards are not expected to have a material impact on the Group in the current or future in equity. reporting periods and on forseeable future transactions. (c) Disposal of subsidiaries When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

94 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 95 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Consolidated Financial Statements for the Year ended 31 December 2019 Consolidated Financial Statements for the Year ended 31 December 2019 (all amounts are expressed in Qatari Riyals unless otherwise stated) (all amounts are expressed in Qatari Riyals unless otherwise stated)

Notes to the consolidated financial statements continued

2. Basis of preparation and consolidation continued 2.2.4 Group companies 2.2. Principles of consolidation and equity accounting continued Set out below are the Group’s principal subsidiaries at 31 December 2019. 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 ownership interests held equals to the voting 2.2.2 Associates rights held by Group. The country of incorporation or registration is also their principal place of business: Associates are all entities over which the Group has significant influence but not control or joint control. This is generally the case where the Group holds between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the The principal subsidiaries of the Group are as follows: equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor’s share of the profit or loss of the investee after the date of acquisition. Group effective Country of shareholding percentage Name of the subsidiary incorporation Principal activities 2019 2018 If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate. City Center Company W.L.L. Qatar Leasing the facilities of a retail outlet complex in City Center Doha 100% 100% Aamal Real Estate W.L.L. Qatar Residential and commercial real estate investment and property rental 100% 100% The Group’s share of post-acquisition profit or loss is recognised in the consolidated statement of profit or loss and other comprehensive income, Aamal Readymix W.L.L. Qatar Production and sale of readymix concrete 100% 100% and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. Ebn Sina Medical W.L.L. Qatar Wholesale and retail distribution of pharmaceuticals and general 100% 100% consumable products When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Aamal Medical W.L.L. Qatar Wholesale distribution of medical equipment 100% 100% Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate. Aamal Trading and Distribution Qatar Sale of tyres, lubricants, batteries and home appliances 100% 100% Company W.L.L. Profits and losses resulting from upstream and downstream transactions between the Group and its associates are recognised in the Group’s consolidated financial statements only to the extent of unrelated investor’s interests in the associates. Unrealised losses are eliminated unless the Aamal Services W.L.L. Qatar Providing facilities management and cleaning services 100% 100% transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to Aamal Travel and Tourism W.L.L. Qatar Operating a travel agency 100% 100% ensure consistency with the policies adopted by the Group. Foot Care Center W.L.L. Qatar Sale of footwear, clinical activities and general commercial trading 100% 100% products The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and Ebn Sina Health Care Pharmacy Qatar Sale of pharmaceuticals, baby care products, medicine and general 100% 100% charges the amount to the consolidated statement of profit or loss and other comprehensive income. Solutions W.L.L. consumable products Aamal Cement Industries W.L.L. Qatar Development and management of factories and the production of curb 99% 99% Dilution gains and losses arising in investments in associates are recognised in the consolidated statement of profit or loss and other stone, interlock slabs and cement bricks comprehensive income. IMO Qatar Company W.L.L.*** Qatar Construction and repair of power plant, establishment and management 100% 100% of industrial enterprises and acting as a representative for the 2.2.3 Joint arrangements international companies Under IFRS 11 Joint Arrangements investments in joint arrangements are classified as either joint operations or joint ventures. The classification Ci-San Trading W.L.L. Qatar Holding company of Gulf Rocks. 50% 50% depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement. The Group has The Group controls Ci-San Trading W.L.L. by virtue of a shareholders’ joint ventures. agreement 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 Gulf Rocks Company W.L.L. Qatar Retail distribution of aggregates 74.5% 74.5% than rights to its assets and obligations for its liabilities. Interests in joint ventures are accounted for using the equity method. Under the equity Aamal Maritime Transportation Qatar Purchasing and leasing of ships for transportation of goods 74.7% 74.7% method, the interests in joint ventures are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the post-acquisition W.L.L. profits or losses and movements in other comprehensive income. Al Farazdaq Company W.L.L. Qatar Trading of office supplies and providing printing and laminating services 65% 65%

When the Group’s share of losses in a joint venture equals to or exceeds its interests in the joint ventures, the Group does not recognize further Family Entertainment Center Qatar Providing family entertainment park facilities in City Center Doha Mall 100% 100% losses, unless it has incurred obligations or made payments on behalf of the joint ventures. Company W.L.L. Winter Wonder Land W.L.L. Qatar Providing entertainment facilities in City Center Doha Mall 100% 100% Unrealized gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in the joint ventures. Aamal for Industrial Projects Qatar Industrial investments 100% 100% Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of the W.L.L.*** joint ventures have been changed where necessary to ensure consistency with the policies adopted by the Group. Legend Trading and Distribution Qatar Trading of automobile products 100% 100% W.L.L. The reporting dates of the equity-accounted investees and the Group are identical and the equity-accounted investees’ accounting policies conform to those used by the Group for like transactions and events in similar circumstances. Aamal for Car Maintenance W.L.L. Qatar Trading of car spare parts 100% 100% Innovative Lighting W.L.L.* Qatar Trading of Light Emitting Diode (LED) Lamps and other lighting products 70% 70% Johnson Controls Qatar W.L.L.* Qatar Provision of facilities management services, energy services, and building 51% 51% maintenance and cleaning services to corporate clients Aamal Optical Supplies W.L.L.** Qatar Trading of optical supplies – 51%

* These entities are under liquidation. ** Liquidated during the year. *** Inactive operations.

96 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 97 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Consolidated Financial Statements for the Year ended 31 December 2019 Consolidated Financial Statements for the Year ended 31 December 2019 (all amounts are expressed in Qatari Riyals unless otherwise stated) (all amounts are expressed in Qatari Riyals unless otherwise stated)

Notes to the consolidated financial statements continued

2. Basis of preparation and consolidation continued It may sometimes be difficult to determine reliably the fair value of the investment property under construction. In order to evaluate whether the 2.2. Principles of consolidation and equity accounting continued fair value of an investment property under construction can be determined reliably, management considers the following factors, among others: Details of the equity-accounted investees of the Group are as follows: –– the provisions of the construction contract; –– the stage of completion; Proportion of ownership and voting power held by the –– whether the project/property is standard (typical for the market) or non-standard; Country of Group Company name incorporation Principal activity 2019 2018 –– the level of reliability of cash inflows after completion; Joint ventures –– the development risk specific to the property; Senyar Industries Qatar Holding W.L.L. Qatar Owning of patents, businesses and subletting them and 50% 50% –– past experience with similar constructions; and provision of investment portfolio management for its –– status of construction permits. subsidiaries and associates Advanced Pipes and Casts Industries W.L.L. Qatar Manufacturing of wide range of cement and glass reinforced 50% 50% Subsequent expenditure is capitalised to the asset’s carrying amount only when it is probable that future economic benefits associated with the pipes systems for infrastructure and pipeline projects expenditure will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when Aamal ECE W.L.L.* Qatar Property management 51% 51% incurred. When part of an investment property is replaced, the cost of the replacement is included in the carrying amount of the property, and the Ecco Gulf Company W.L.L.* Qatar Offers professional and business process outsourcing and call 51% 51% fair value is reassessed. centre services Associate If a valuation obtained for a property held under a lease is net of all payments expected to be made, any related lease liability recognised separately Frijns Structural Steel Middle East W.L.L. Qatar Steel fabrications 20% 20% in the consolidated statement of financial position is added back to arrive at the carrying value of the investment property for accounting purposes.

Changes in fair values are recognised in the consolidated statement of profit or loss and other comprehensive income. Investment properties are * Whilst the Parent Company’s ownership proportion in Aamal ECE W.L.L. and Ecco Gulf Company W.L.L. is 51%, the joint venture agreements between the Company and other shareholders indicate joint control and hence, the investments are equity-accounted by the Parent Company. derecognised when they have been disposed of.

2.3. Foreign currency translation Where the Group disposes of a property at fair value in an arm’s length transaction, the carrying value immediately prior to the sale is adjusted to the transaction price, and the adjustment is recorded in the income statement within net gain from fair value adjustment on investment property. 2.3.1 Functional and presentation currency Items included in the consolidated financial statements are measured using the currency of the primary economic environment in which the entity If an investment property becomes owner-occupied, it is reclassified as property, plant and equipment. Its fair value at the date of reclassification operates (‘the functional currency’). The consolidated financial statements are presented in Qatari Riyal which is the Parent Company, all subsidiaries, becomes its cost for subsequent accounting purposes. and all equity accounted investees’ functional and presentation currency. If an item of owner-occupied property becomes an investment property because its use has changed, any difference resulting between the carrying 2.3.2 Transactions and balances amount and the fair value of this item at the date of transfer is treated in the same way as a revaluation under IAS 16. Any resulting increase in Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions the carrying amount of the property is recognised in consolidated statement of profit or loss and other comprehensive income to the extent that or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the it reverses a previous impairment loss, with any remaining increase recognised in other comprehensive income and increase directly to equity in translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated revaluation surplus within equity. Any resulting decrease in the carrying amount of the property is initially charged in other comprehensive income statement of profit or loss and other comprehensive income. Foreign exchange gains and losses that relate to borrowings are also presented in the against any previously recognised revaluation surplus, with any remaining decrease charged to consolidated statement of profit or loss and other consolidated statement of profit or loss and other comprehensive income, within ‘finance costs – net’. All foreign exchange gains and losses are comprehensive income. presented in the consolidated statement of profit or loss and other comprehensive income within ‘other income’. Where an investment property undergoes a change in use, evidenced by commencement of development with a view to sale, the property is 2.4. Investment properties transferred to inventories. A property’s deemed cost for subsequent accounting as inventories is its fair value at the date of change in use. Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the companies in the consolidated Group, is classified as investment property. Investment property also includes property that is being constructed or developed for future use as 2.5. Property, plant and equipment investment property. Property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items cost including borrowing costs that are eligible for capitalisation and excluding the costs of day-to-day servicing, less Before 1 January 2019, all land held under operating leases was classified and accounted for by the Group as investment property when the rest of accumulated depreciation and any impairment in value. Subsequent costs are included in the asset’s carrying amount or recognised as a separate the definition of investment property is met. Therefore the operating leases were accounted for as if they were a finance lease. asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the After 1 January 2019, all leases that meet the definition of investment property are classified as investment property and measured at fair value. consolidated statement of profit or loss and other comprehensive income during the financial period in which they are incurred.

Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. After initial From time to time, the Group’s vessels are required to be dry-docked for inspection and re-licensing at which time major repairs and maintenance recognition, investment property is carried at fair value. that cannot be performed while the vessels are in operation are generally performed. The Group capitalises the costs associated with dry-docking as they occur by adding them to the cost of the vessel and amortises these costs on the straight-line basis over 3-5 years, which is generally the After initial recognition, investment property is carried at fair value. Investment property that is being redeveloped for continuing use as investment period until the next scheduled dry-docking. property, or for which the market has become less active, continues to be measured at fair value. Investment property under construction is measured at fair value if the fair value is considered to be reliably determinable. Investment properties under construction for which the fair value cannot be determined reliably, but for which the Group expects the fair value of the property will be reliably determinable when construction is completed, are measured at cost less impairment until the fair value becomes reliably determinable or construction is completed – whichever is earlier.

98 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 99 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Consolidated Financial Statements for the Year ended 31 December 2019 Consolidated Financial Statements for the Year ended 31 December 2019 (all amounts are expressed in Qatari Riyals unless otherwise stated) (all amounts are expressed in Qatari Riyals unless otherwise stated)

Notes to the consolidated financial statements continued

2. Basis of preparation and consolidation continued 2.10. Treasury shares 2.5. Property, plant and equipment continued When share capital recognised in equity is repurchased (by the Company or any of its subsidiaries), the amount of the consideration paid, which Depreciation is provided on a straight-line basis on all property, plant and equipment. The rates of depreciation are based upon the following includes directly attributable costs, is recognized as a deduction from equity. When treasury shares are sold or reissued subsequently, the amount estimated useful lives: received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is presented in the retained earnings.

Buildings 20 – 25 years 2.11. Borrowings Leasehold improvements 2 – 8 years or over the period of lease term, whichever is shorter Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Truck mixers and motor vehicles 4 – 15 years Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the Plant and machinery 8 – 25 years borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to Furniture, fixtures and office equipment 3 – 5 years the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the Vessels 20 years extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

Construction work in progress is not depreciated. Borrowings are derecognised from the consolidated statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party The carrying amounts are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in the consolidated statement of profit or recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets are written down to loss and other comprehensive income as other income or finance costs. their recoverable amount, being the higher of their fair value less costs to sell and their value in use. Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish all or part of the An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or liability (debt for equity swap), a gain or loss is recognised in the consolidated statement of profit or loss and other comprehensive income, which is disposal. Any gain or loss arising on derecognition of the asset is included in the consolidated statement of profit or loss and other comprehensive measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued. income in the year the asset is derecognised. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months The asset’s residual values, useful lives and method of depreciation are reviewed, and adjusted if appropriate, at each financial year end. after the reporting period.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated 2.12. Borrowing costs recoverable amount. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes substantial period of time to Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the consolidated 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 statement of profit or loss and other comprehensive income. these are incurred. Borrowing costs consist of the interest and other costs that the Group incurs in connection with the borrowing of funds.

2.6. Cash and cash equivalents 2.13. Accounts payable and accruals For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and bank balances, unrestricted balances Trade and other payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade and held with banks and short term bank deposits with an original maturity of three months or less, net of outstanding bank overdrafts. other payables are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

2.7. Trade and other receivables Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. Trade and other receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are 2.14. Tenant deposits generally due for settlement within 30 days and therefore are all classified as current. Tenant deposit liabilities are initially recognised at fair value and subsequently measured at amortised cost where material. Any difference between the Trade receivables are recognised initially at amount of consideration that is unconditional unless they contain significant financing components, initial fair value and the nominal amount is included as a component of rental income and recognised on a straight-line basis over the lease term. when they are recognised at fair value. The Group holds the receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using effective interest method less loss allowance. See Note 30.1(b) for a description of the Group’s 2.15. Financial assets impairment policies. 2.15.1 Classification The Group classifies its financial assets as those to be measured at amortised cost. 2.8. Inventories Raw materials, work in progress, finished goods and goods for resale are stated at the lower of cost and net realisable value. Cost comprises direct The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash flows. materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average costs. Costs of purchased inventory are For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business less the held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity estimated costs of completion and the estimated costs necessary to make the sale. investment at fair value through other comprehensive income (FVOCI).

2.9. Contributed equity The Group reclassifies debt investments when and only when its business model for managing those assets changes. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a 2.15.2 Recognition and derecognition deduction, net of tax, from the proceeds. Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to purchase or sell the Where any Group company purchases the company’s equity instruments, for example as the result of a share buy-back or a share-based payment asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and plan, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Group has transferred substantially all the risks and rewards of ownership. the owners of the Group as treasury shares until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the shareholders of the Group.

100 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 101 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Consolidated Financial Statements for the Year ended 31 December 2019 Consolidated Financial Statements for the Year ended 31 December 2019 (all amounts are expressed in Qatari Riyals unless otherwise stated) (all amounts are expressed in Qatari Riyals unless otherwise stated)

Notes to the consolidated financial statements continued

2. Basis of preparation and consolidation continued 2.17.2 Other short-term employees benefits 2.15. Financial assets continued Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus if the Group has a present legal or constructive obligation to pay this 2.15.3 Measurement amount as a result of past service provided by the employee, and the obligation can be measured reliably. At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL 2.18. Revenue are expensed in profit or loss. (i) Sale of goods manufactured by the Group Debt instruments The Group manufactures and sells ready mix concrete, curb stone, interlock slabs and cement bricks. Sales are recognised when control of the Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the asset. There are three measurement categories. The Group classifies all their debt instruments into the amortised cost category. the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has –– Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Group has objective evidence that all interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest criteria for acceptance have been satisfied. rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses), together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the consolidated statement of profit or loss and A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage other comprehensive income. of time is required before the payment is due. –– FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the (ii) Sale of goods recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in profit or loss. When The Group operates wholesale and retail distribution of pharmaceuticals and general consumable products, wholesale distribution of medical the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and equipment, retail sale of tyres, lubricants, batteries, home appliances, footwear, general commercial trading products, baby care products, recognised in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate medicine and general consumable products, aggregates, office supplies, automobile products and car spare parts. Revenue from the sale of goods method. Foreign exchange gains and losses are presented in other gains/(losses) and impairment expenses are included within the general and is recognised when a Group entity sells a product to the customer. Payment of the transaction price is due within 30 to 60 days when the customer administrative expenses in the consolidated statement of profit or loss and other comprehensive income. purchases the goods. –– FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognised in profit or loss and presented net within other gains/(losses) in the period in which it arises. (iii) Rendering of services The Group provides various services including installation of medical equipment, clinical activities, family entertainment park facilities, facilities 2.15.4 Impairment management and cleaning services, business process outsourcing and call centre services and printing and lamination services. The Group also From 1 January 2018, the Group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at operates a travel agency. amortised cost. Revenue from providing services is recognised in the accounting period in which the services are rendered. Revenue is recognised based on the For trade receivables, the Group applies the simplified approach permitted by IFRS 9 for trade receivables and other contract assets, which requires actual service provided to the end of the reporting period as a proportion of the total services to be provided, because the customer receives and expected lifetime losses to be recognised from initial recognition of the receivables, see Note 30.1(b) for further details. uses the benefits simultaneously. For cleaning services and call centre services, this is determined using the input method approach and is based on the actual labour hours spent relative to the total expected labour hours. 2.16. Provisions Provisions are recognised when: the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of Some contracts include multiple deliverables, such as selling and installation of medical equipment. However, the installation is simple, does not resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses. include an integration service and could be performed by another party. It is therefore accounted for as a separate performance obligation. In this case, the transaction price will be allocated to each performance obligation based on the stand-alone selling prices. Where these are not directly Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class observable, they are estimated based on expected cost plus margin. Estimates of revenues, costs or extent of progress toward completion are of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in obligations may be small. which the circumstances that give rise to the revision become known by management.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects In case of fixed-price contracts, the customer pays the fixed amount based on a payment schedule. If the services rendered by the Group exceed current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time the payment, a contract asset is recognised. If the payments exceed the services rendered, a contract liability is recognised. If the contract includes is recognised as interest expense. an hourly fee, revenue is recognised in the amount to which the Group has a right to invoice. Customers are invoiced on a monthly basis and consideration is payable when invoiced. 2.17. Employees’ end of service benefits (iv) Financing components 2.17.1 Defined benefit plan The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and A defined benefit plan is a pension plan made in accordance with the Qatar Labour Law number 14 of 2004, where the Group makes payments to payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money. non-Qatari employees on their retirement, usually dependent on one or more factors such as age, years of service and compensation.

The liability recognised in the consolidated statement of financial position in respect of employees’ end of service indemnity is the present value of the defined benefit obligation at the end of the reporting period. The defined benefit obligation is calculated annually by management using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related benefit obligation. Where there is no deep market in such bonds, the market rates on government bonds are used.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions (remeasurements) are charged or credited to equity in other comprehensive income in the period in which they arise.

Past-service costs are recognised immediately in the consolidated statement of profit or loss and other comprehensive income.

102 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 103 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Consolidated Financial Statements for the Year ended 31 December 2019 Consolidated Financial Statements for the Year ended 31 December 2019 (all amounts are expressed in Qatari Riyals unless otherwise stated) (all amounts are expressed in Qatari Riyals unless otherwise stated)

Notes to the consolidated financial statements continued

2. Basis of preparation and consolidation continued 3. Changes in accounting policies 2.19. Fair value measurement This note explains the impact of the adoption of IFRS 16 Leases on the Group’s consolidated financial statements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that: IFRS 16 Leases – Impact of adoption –– In the principal market for the asset or liability, or The Group has adopted IFRS 16 using the cumulative catch-up approach with simplified right-of-use asset (RoU) from 1 January 2019, but has not restated comparatives for the 2018 reporting period, as permitted under the specific transitional provisions in the standard. The reclassifications –– In the absence of a principal market, in the most advantageous market for the asset or liability and the adjustments arising from the new leasing rules are therefore recognised in the opening consolidated statement of financial position on 1 January 2019. The principal or the most advantageous market must be accessible by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, Adjustments recognised on adoption of IFRS 16 assuming that market participants act in their economic best interest. On adoption of IFRS 16, the Group recognised lease liabilities in relation to leases which had previously been classified as ‘operating leases’ under the principles of IAS 17 ‘Leases’. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset incremental borrowing rate as of 1 January 2019. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. 1 January 2019 was 5%.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, The reconciliation between the non-cancellable operating lease commitments disclosed as of 31 December 2018 and the lease liabilities recognised maximising the use of relevant observable inputs and minimising the use of unobservable inputs. as of 1 January 2019 is as follows:

All assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: Operating lease commitments disclosed as at 31 December 2018 17,905,629 –– Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities Discounted using the lessee’s incremental borrowing rate of at the date of initial application 17,141,340 –– Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or (Less): short-term leases recognised on a straight-line basis as expense (6,894,060) indirectly observable (Less): low-value leases recognised on a straight-line basis as expense (200,000) –– Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable Add: adjustments as a result of a different treatment of extension and termination options 64,466,002 Lease liability recognised as at 1 January 2019 74,513,282 For assets and liabilities that are recognised in the consolidated financial statements on a recurring basis, the Group determines whether transfers Of which are: have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. Current lease liabilities 12,692,331 Non-current lease liabilities 61,820,951 The Group measures its investment properties at fair value at each reporting date. 74,513,282

The Group’s management determines the policies and procedures for valuation of investment properties. External valuers are involved for the valuation of investment properties. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained. The associated right-of use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease The management discusses and reviews, the Group’s external valuers, valuation techniques and assumptions used for each property (Note 5). payments relating to that lease recognised in the consolidated statement of financial position as at 31 December 2018. There were no onerous lease contracts that would have required an adjustment to the right-of-use assets at the date of initial application. 2.20. Dividends The right-of-use assets on 31 December 2019 and 1 January 2019 are as follows: Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the Group, on or before the end of the reporting period but not distributed at the end of the reporting period. 31 December 1 January 2019 2019 2.21. Earnings per share Right-of-use assets 84,022,917 74,513,282 (i) Basic earnings per share Basic earnings per share is calculated by dividing: Additions to the right-of-use assets during the 2019 financial year were QR 20,409,409. –– the profit attributable to owners of the Group, excluding any costs of servicing equity other than ordinary shares –– by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued The consolidated statement of financial position shows the following amounts relating to lease liabilities: during the year and excluding treasury shares. Lease liabilities 2019 Current 16,359,141 (ii) Diluted earnings per share Non-current 68,676,670 Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account: 85,035,811 –– the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and –– the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. The total cash outflow for leases in 2019 was QR 19,279,057 for all lease payments done, including short-term and low value leases.

2.22. Income tax The change in accounting policy affected the following items in the consolidated statement of financial position on 1 January 2019: (i) Right-of-use assets – increase by QR 74,513,282 The Group applies its income tax in accordance with the new Qatar Income Tax Law No. 24 of 2018. The new law has replaced the old Qatar Income (ii) Lease liabilities – increase by QR 74,513,282 Tax Law No. 21 of 2009.

Impact on segment disclosures and earnings per share

104 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 105 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Consolidated Financial Statements for the Year ended 31 December 2019 Consolidated Financial Statements for the Year ended 31 December 2019 (all amounts are expressed in Qatari Riyals unless otherwise stated) (all amounts are expressed in Qatari Riyals unless otherwise stated)

Notes to the consolidated financial statements continued

3. Changes in accounting policies continued Extension and termination options Adjustments recognised on adoption of IFRS 16 continued Extension and termination options are included in a number of leases across the Group. These terms are used to maximise operational flexibility in terms of managing contracts. The majority of extension and termination options held are exercisable only by the Group and not by the respective lessor. Segment assets and segment liabilities for December 2019 increased whereas profit for the year decreased as a result of the change in accounting policy. The following segments were affected by the change in policy: Critical judgments in determining the lease term Profit for Segment Segment the year assets liabilities In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the Trading and distribution (146,196) 28,391,151 28,537,347 lease is reasonably certain to be extended (or not terminated). The Group has a number of leases that have auto-renewal features on the same Industrial manufacturing – 25,789,257 25,789,257 terms. Management has taken a view that the minimum renewal period will take into consideration the remaining useful life of furniture and Managed services 999,739 2,973,826 1,974,087 fixtures attached to the relevant lease and the business strategy term which is generally for the next 10 years. Potential future cash outflows of Head office (1,866,437) 26,868,683 28,735,120 QR 4,414,936 have not been included in the lease liability because it is not reasonably certain that the leases will be extended (or not terminated). (1,012,894) 84,022,917 85,035,811 The lease term is reassessed if an option is actually exercised (or not exercised) or the Group becomes obliged to exercise (or not exercise) it. The assessment of reasonable certainty if a significant event or a significant change in circumstances occurs which affects this assessment Earnings per share decreased by less than QR 1 per share for the year as a result of the adoption of IFRS 16. and that is within the control of the lessee. During the current financial year, the financial effect of revising lease terms to reflect the effect of exercising extension and termination options was an increase in recognised lease liabilities and right-of-use assets of QR 3,851,236. (i) Practical expedients applied In applying IFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard: Lessor accounting 1) The use of a single discount rate to a portfolio of leases with reasonably similar characteristics; Lease income from operating leases where the Group is a lessor is recognised in income on a straightline basis over the lease term. Initial direct costs 2) Recognising the right-of-use assets at an amount equal to the lease liabilities; incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and recognised as expense over the lease term on 3) The accounting for operating leases with a remaining lease term of less than 12 months as at 1 January 2019 as short-term leases; the same basis as lease income. The respective leased assets are included in the consolidated statement of financial position based on their nature. 4) The accounting for operating leases where the leased asset value is less than QR 5,000 as low-value leases; The Group did not need to make any adjustments to the accounting for assets held as lessor as a result of adopting the new leasing standard. 5) The exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application; 6) The use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease; and 4. Equity-accounted investees 7) Elected not to separate lease component from any associated non-lease components and taken this option to account for the lease component The entities listed below have share capital consisting solely of ordinary shares, which are held directly by the Group. The country of incorporation and the associated non-lease components as a single lease component. or registration is also the principal place of business, and the proportion of ownership interest is the same as the proportion of voting rights held.

The Group has also elected not to reassess whether a contract is, or contains a lease at the date of initial application. Instead, for contracts entered Summarised financial information of equity-accounted investees: into before the transition date the Group relied on its assessment made applying IAS 17. Reconciliation to carrying amounts The Group’s leasing activities and how these are accounted for The Group leases various offices, warehouses, retail stores, land, employees and labour accommodation. Rental contracts are typically made for fixed Frijns Structural Senyar Industries Steel Middle East Qatar Holding periods of 1 to 5 years but may have extension options as described below. Lease terms are negotiated on an individual basis and contain a wide range of W.L.L. W.L.L. Others Total different terms and conditions. The lease agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes. 2019 2019 2019 2019 Opening net assets 50,558,816 616,899,409 6,911,890 674,370,115 Until the 2018 financial year, leases of property, plant and equipment were classified as operating leases. Payments made under operating leases Other adjustments 42,090,527 – 23,643,676 65,734,203 (net of any incentives received from the lessor) were charged to profit or loss on a straight-line basis over the period of the lease. Adjusted opening net assets 92,649,343 616,899,409 30,555,566 740,104,318 From 1 January 2019, leases are recognised as a right-of-use asset at an amount equal to the lease liabilities. From 1 January 2019 onwards, each lease Profit (loss) for the period/year (407,491) 111,519,352 1,316,451 112,428,312 payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a Dividends paid (12,000,000) (195,975,174) (10,604,373) (218,579,547) constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of Closing net assets 80,241,852 532,443,587 21,267,644 633,953,083 the asset’s useful life and the lease term on a straight-line basis. Group share in % 20% 50% Group share 16,048,370 266,221,794 12,386,727 294,656,891 Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: Carrying amount 16,048,370 266,221,794 12,386,727 294,656,891 –– fixed payments, less any lease incentives receivable Group share in profit (loss) including other adjustments 8,336,607 55,759,676 (1,830,965) 62,265,318 –– amounts expected to be payable by the lessee under residual value guarantees –– the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and 2018 2018 2018 2018 –– payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option Opening net assets 74,324,677 620,616,535 21,560,167 716,501,379 Profit (loss) for the period/year 16,638,282 189,501,300 (3,941,804) 202,197,778 The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s incremental Dividends paid – (184,914,726) (10,706,473) (195,621,199) borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a Impact of adoption of IFRS 9 (38,182,142) (1,175,570) – (39,357,712) similar economic environment with similar terms and conditions. Impact of adoption of IFRS 15 – (11,649,041) – (11,649,041) Other adjustments (2,222,001) 4,520,911 – 2,298,910 Right-of-use assets are measured at cost comprising the following: Closing net assets 50,558,816 616,899,409 6,911,890 674,370,115 –– the amount of the initial measurement of lease liability Group share in % 20% 50% –– any lease payments made at or before the commencement date less any lease incentives received Group share 10,111,763 308,449,705 5,563,066 324,124,534 –– any initial direct costs. Carrying amount 10,111,763 308,449,705 5,563,066 324,124,534

Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Group share in profit (loss) including other adjustments 2,883,256 97,011,106 133,218 100,027,580 Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise all assets below the value of QR 5,000.

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Consolidated Financial Statements for the Year ended 31 December 2019 Consolidated Financial Statements for the Year ended 31 December 2019 (all amounts are expressed in Qatari Riyals unless otherwise stated) (all amounts are expressed in Qatari Riyals unless otherwise stated)

Notes to the consolidated financial statements continued

4. Equity-accounted investees continued Summarised statement of profit or loss and other comprehensive income Summarised statement of financial position Frijns Structural Senyar Industries Steel Middle East Qatar Holding Frijns Structural Senyar Industries W.L.L. W.L.L. Others Steel Middle East Qatar Holding 2019 2019 2019 W.L.L. W.L.L. Others 31 December 31 December 31 December Revenue 97,623,150 1,455,122,773 100,087,285 2019 2019 2019 Direct costs (65,863,666) (1,280,005,027) (82,514,321) Current assets Gross profit/(loss) 31,759,484 175,117,746 17,572,964 Cash and bank balances 3,414,251 65,556,042 18,136,774 Other income 4,058,817 3,592,918 (5,757) Other current assets 121,682,854 804,909,610 41,455,503 General expenses (34,781,759) (33,470,331) (9,309,200) Total current assets 125,097,105 870,465,652 59,592,277 Finance costs (1,444,033) (22,015,195) (6,941,556) Non-current assets 49,589,123 330,560,070 138,372,746 Current liabilities Net profit/(loss) (407,491) 123,225,138 1,316,451 Financial liabilities (excluding trade payables) (3,126,869) (453,230,169) (35,630,298) Other comprehensive income – – – Other current liabilities (50,749,915) (163,366,412) (59,114,128) Total comprehensive income/(loss) (407,491) 123,225,138 1,316,451 Total current liabilities (53,876,784) (616,596,581) (94,744,426) Total comprehensive income/(loss) attributable to non-controlling interest – (11,705,786) – Non-current liabilities Total comprehensive income/(loss) attributable to equity holders of the parent (407,491) 111,519,352 1,316,451 Financial liabilities (excluding trade payables) (29,720,445) (7,102,310) (78,765,882)

Other non-current liabilities (10,847,147) (11,331,329) (3,187,071) 2018 2018 2018 Total non-current liabilities (40,567,592) (18,433,639) (81,952,953) Revenue 195,429,950 2,220,914,994 62,685,851 Non-controlling interest – (55,945,617) – Direct costs (100,146,294) (1,933,450,365) (53,781,335) Net assets 80,241,852 510,049,885 21,267,644 Gross profit/(loss) 95,283,656 287,464,629 8,904,516 Other income 714,482 1,656,251 3,946 31 December 31 December 31 December General expenses (78,079,225) (38,198,741) (6,323,302) 2018 2018 2018 Finance costs (1,280,631) (35,410,071) (6,526,964) Current assets Cash and bank balances 8,751,448 45,054,207 12,429,893 Net profit/(loss) 16,638,282 215,512,068 (3,941,804) Other current assets 90,511,270 381,147,407 39,914,714 Other comprehensive income – – – Total current assets 99,262,718 426,201,614 52,344,607 Total comprehensive income/(loss) 16,638,282 215,512,068 (3,941,804) Non-current assets 48,747,714 1,101,890,953 151,586,632 Total comprehensive income/(loss) attributable to non-controlling interest – (26,010,768) – Current liabilities Financial liabilities (excluding trade payables) (2,404,944) (665,975,825) (38,693,569) Total comprehensive income/(loss) attributable to equity holders of the parent 16,638,282 189,501,300 (3,941,804) Other current liabilities (67,908,143) (188,755,999) (75,492,080) Total current liabilities (70,313,087) (854,731,824) (114,185,649) 5. Investment properties

Non-current liabilities 2019 2018 Financial liabilities (excluding trade payables) (33,214,036) – (88,267,291) At 1 January 7,168,589,734 6,892,214,727 Other non-current liabilities (5,924,493) (10,411,179) (741,598) Additions 39,523,956 276,375,007 Total non-current liabilities (39,138,529) (10,411,179) (89,008,889) At 31 December 7,208,113,690 7,168,589,734 Non-controlling interest – (68,023,893) – Net assets 38,558,816 594,925,671 736,701 –– Investment properties are located in the State of Qatar. The Group has no restrictions on the realisability of its investment properties and no contractual obligations to either purchase investment properties or repairs, maintenance and enhancements. –– The investment properties are stated at fair value, which has been determined based on valuations performed by independent valuers as at 31 December 2019. Those valuers are accredited with recognised and relevant professional qualifications and with recent experience in the location and category of those investment properties being valued. In arriving at estimated market values, the valuers have used their market knowledge and professional judgement and not only relied on historical transactional comparable. In the absence of current prices in an active market, the valuations are based on investment, comparable, and depreciated replacement cost (DRC) method with inputs based upon comparable market transactions on arm’s length terms. –– Investment properties are measured at fair value using significant unobservable inputs (Level 3).

108 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 109 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Consolidated Financial Statements for the Year ended 31 December 2019 Consolidated Financial Statements for the Year ended 31 December 2019 (all amounts are expressed in Qatari Riyals unless otherwise stated) (all amounts are expressed in Qatari Riyals unless otherwise stated)

Notes to the consolidated financial statements continued

5. Investment properties continued 6. Property, plant and equipment

Details of the Group’s investment properties and information about the fair value hierarchy as at 31 December are as follows: Furniture, Buildings and Truck mixers fixtures and 2019 2018 leasehold and motor Plant and office Capital work Vacant land 134,334,955 134,334,955 improvements vehicles machinery equipment Vessels in progress Total Completed properties: Cost: Commercial properties 4,221,170,750 4,220,798,950 At 1 January 2019 162,380,612 124,939,409 142,291,265 55,492,756 73,507,640 8,397,001 567,008,683 Residential properties 806,284,145 806,284,145 Additions 1,001,950 – 3,385,876 3,617,926 – 798,540 8,804,292 Mixed (residential and commercial) 1,748,970,000 1,748,970,000 Disposals/write-off (7,093,187) (1,740,940) (589,220) (1,793,218) – – (11,216,565) Properties under construction 297,353,840 258,201,684 Transfer from capital work in progress 1,093,152 30,000 – – – (1,123,152) – Other adjustments – – – (3,311,204) – (176,565) (3,487,769) Total at 31 December 7,208,113,690 7,168,589,734 At 31 December 2019 157,382,527 123,228,469 145,087,921 54,006,260 73,507,640 7,895,824 561,108,641

Movement in properties under construction is as follows: Accumulated depreciation: At 1 January 2019 40,861,493 73,945,638 85,331,437 44,833,296 6,124,695 – 251,096,559 2019 2018 Charge for the year 7,683,604 8,100,624 8,451,649 4,571,271 1,755,517 – 30,562,665 Beginning at 1 January 258,201,684 162,301,210 Disposals/write-off (7,083,728) (1,740,935) (589,219) (1,763,769) – – (11,177,651) Additions during the year 27,837,927 81,610,393 Other adjustments – – (2,217,292) – – (2,217,292) Borrowing costs capitalized during the year 11,314,229 14,290,081 At 31 December 2019 41,461,369 80,305,327 93,193,867 45,423,506 7,880,212 – 268,264,281 Ending at 31 December 297,353,840 258,201,684 Net carrying amounts: At 31 December 2019 115,921,158 42,923,142 51,894,054 8,582,754 65,627,428 7,895,824 292,844,360 Description of valuation techniques used by the Group and key inputs to valuation on all of the investment properties are as follows:

Types of properties Valuation techniques Estimated value Notes: Commercial Market approach 2,800 to 3,300 QR/sqft Land rate (i) Depreciation charge for the year amounting to QR 17,671,735 (2018: QR 17,330,577) is included in the direct costs. (ii) The capital work in progress does not include capitalised borrowing cost in the current year (2018: Nil). properties Depreciated replacement cost 1,793 to 4,350 QR Depreciated rebuild rate (iii) The buildings are constructed on a plot of land taken on a long term operating lease.

Residential Market approach 420 – 2,200 QR Land rate Furniture, properties Depreciated replacement cost 2,013 – 5,175 QR Depreciated rebuild rate Buildings and Truck mixers fixtures leasehold and motor Plant and and office Capital work Vacant land Market approach 575 to 800 QR/sqft Land rate improvements vehicles machinery equipment Vessels in progress Total Cost: Sensitivity analysis: At 1 January 2018 159,202,517 124,138,809 139,569,286 53,184,775 73,507,640 5,028,627 554,631,654 Additions 505,780 327,000 3,122,582 2,562,414 – 6,684,390 13,202,166 At 31 December 2019, if the price per square foot for investment properties (valued using market approach) had been higher/lower by 1% with all Disposals/write-off (172,205) (59,500) (400,603) (136,279) – (77,746) (846,333) other variables held constant, the calculated fair valuation gains (losses) on investment properties for the year would have been QR 72 million Transfer from capital work in progress 2,844,520 393,750 – – – (3,238,270) – lower/higher (higher/lower) mainly as a result of higher/lower fair value gain (loss) on investment properties. Transfer to related parties – 139,350 – (118,154) – – 21,196 Minimum lease receivables on leases of investment properties are as follows: At 31 December 2018 162,380,612 124,939,409 142,291,265 55,492,756 73,507,640 8,397,001 567,008,683 2019 2018 Accumulated depreciation: Within one year 171,202,930 164,629,757 At 1 January 2018 36,353,626 65,475,768 77,768,717 40,355,330 4,369,178 – 224,322,619 Between 1 and 5 years 327,686,475 369,662,736 Charge for the year 4,556,497 8,362,253 7,963,322 4,727,115 1,755,517 – 27,364,704 More than 5 years – – Disposals/write-off (48,630) (31,733) (400,602) (131,692) – – (612,657) Transfer to related parties – 139,350 – (117,457) – – 21,893 Total at 31 December 498,889,405 534,292,493 At 31 December 2018 40,861,493 73,945,638 85,331,437 44,833,296 6,124,695 – 251,096,559 Amounts recognised in profit or loss for investment properties are as follows: Net carrying amounts:

2019 2018 At 31 December 2018 121,519,119 50,993,771 56,959,828 10,659,460 67,382,945 8,397,001 315,912,124 Rental income 275,552,608 270,849,228 Direct operating expenses from properties that generated rental income 32,754,920 38,395,504 Significant estimate – useful lives of property, plant and equipment Fair value gain/(loss) recognised – – The Group’s management determines the estimated useful lives of its property, plant and equipment for calculating depreciation as outlined in Note 2.5. This estimate is determined after considering the expected usage of the asset, physical wear and tear, technical or commercial obsolescence. The estimated useful lives, residual values and depreciation methods are reviewed at each reporting date, with the effect of any changes in estimate accounted for on a prospective basis. At year-end, management assessed that no changes occurred to these estimates.

At year-end, if the useful life increased/decreased by 5% against the current useful life with all other variables held constant, profit for the year would have been lower by QR 2,886,109 or higher by QR 2,611,242 (2018: lower by QR 2,958,838 or higher by QR 2,677,044).

110 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 111 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Consolidated Financial Statements for the Year ended 31 December 2019 Consolidated Financial Statements for the Year ended 31 December 2019 (all amounts are expressed in Qatari Riyals unless otherwise stated) (all amounts are expressed in Qatari Riyals unless otherwise stated)

Notes to the consolidated financial statements continued

7. Cash and bank balances 9. Amounts due from related parties

For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise the following balances: 2019 2018 2019 2018 Ultimate parent Cash on hand 142,548 33,611 Al Faisal Holding Company W.L.L. 4,294,111 12,892,639 Cash in banks – current accounts 362,431,384 466,888,410 Entities controlled by ultimate parent Cash in banks – call accounts 143,682,112 124,694,889 Al Rayyan Tourism Investment Company W.L.L. 8,707,997 6,809,985 Short term fixed deposits 8,447,679 8,272,947 Maintenance Management Group Qatar W.L.L. 197,965 405,696 Restricted deposits relating to letters of guarantee 4,613,654 6,005,191 Al-Arabia Land Transporting Company W.L.L. 864,625 295,110 Cash and bank balances 519,317,377 605,895,048 Al Farman for Investment & International Trading Company W.L.L. 540,876 482,855 Restricted deposits relating to letters of guarantee (4,613,654) (6,005,191) Gulf English School 773,012 148,681 Other related parties 3,695,373 2,176,110 514,703,723 599,889,857 14,779,848 10,318,437 Joint venture The short term bank deposits are made for varying periods between one day and three months, depending on the immediate cash requirements of Advanced Pipes and Casts Company W.L.L. 17,462,175 25,752,749 the Group, and earn interest at the respective short term deposit rates. ECCO Gulf Company W.L.L. 1,152,802 – Frijns Steel Construction Middle East W.L.L. 1,233,295 – Cash is held in banks with reputable credit ratings as follows:

Credit rating Rating Agency 2019 2018 19,848,272 25,752,749 P-1 Moody’s 353,214,420 510,702,323 38,922,231 48,963,825 P-2 Moody’s 160,573,898 90,959,822 Others Moody’s 5,386,511 4,199,292 Outstanding related party balances are unsecured and are repayable in cash.

519,174,829 605,861,437 Transactions with related parties included in the consolidated statement of profit or loss and other comprehensive income were as follows: 2019 2018 8. Trade and other receivables Sale of goods and services to: 2019 2018 Ultimate parent 7,780,865 12,018,915 Trade receivables 388,924,395 384,476,675 Entities controlled by ultimate parent 9,036,613 14,221,565 Less: Impairment of trade receivables (75,636,730) (88,266,099) Associate 1,356,715 2,915,403 313,287,665 296,210,576 18,174,193 29,155,883 Advances to suppliers and prepayments 48,716,686 56,246,211 Rental income from: Retention receivables – current portion 15,209,349 8,862,343 Ultimate parent 398,400 398,400 Other receivables 35,850,005 43,835,024 Entities controlled by ultimate parent 520,784 154,373 413,063,705 405,154,154 919,184 552,773

The total retention receivables as at 31 December is as follows: 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. 2019 2018 (ii) Other related party transactions are disclosed in Note 26. Current portion 15,209,349 8,862,343 10. Inventories Non-current portion 5,712,228 6,036,326 2019 2018 20,921,577 14,898,669 Goods for resale 152,466,847 158,615,550 Raw materials and spare parts 11,862,774 13,257,030 As at 31 December 2019, trade receivables amounting to QR 75,636,730 (2018: QR 88,266,099) were impaired. Movements in the allowance for Work in progress 562,638 664,715 impairment of trade accounts receivable were as follows: Goods in transit 1,531,613 1,531,613 2019 2018 166,423,872 174,068,908 At 31 December 2018 – IAS 39 88,266,099 42,624,373 Less: write-down of inventories to net realisable value (2,443,419) (2,589,956) Adjustments through opening retained earnings – 42,854,749 163,980,453 171,478,952 Opening loss allowance as at 1 January 2019 – IFRS 9 88,266,099 85,479,122 Other adjustments (3,705) – Movements in the provision for obsolete and slow-moving inventories were as follows: Charges net of recoveries for the year 14,515,887 2,997,706 2019 2018 Amounts written-off (27,141,551) (210,729) At 1 January 2,589,956 1,361,285 At 31 December 75,636,730 88,266,099 Charges net of reversals during the year (Note 18) 1,750,088 1,228,671 Write-off during the year (1,896,625) – Information about the impairment on trade receivables can be found in Note 30. At 31 December 2,443,419 2,589,956

112 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 113 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Consolidated Financial Statements for the Year ended 31 December 2019 Consolidated Financial Statements for the Year ended 31 December 2019 (all amounts are expressed in Qatari Riyals unless otherwise stated) (all amounts are expressed in Qatari Riyals unless otherwise stated)

Notes to the consolidated financial statements continued

11. Share capital 12. Legal reserve

2019 2018 In accordance with the requirements of the Qatar Commercial Companies’ Law No. 11 of 2015 and the parent’s articles of association, an amount equal to 10% of the net profit for the year, as a minimum, should be transferred to legal reserve until this reserve is equal to 50% of the paid up share capital. The Authorised, issued and paid reserve is not available for distribution except in the circumstances stipulated in the above mentioned law and the parent’s articles of association. 6,300,000,000 (2018: 6,300,000,000) shares of QR 1 each 6,300,000,000 6,300,000,000 13. Borrowings

All shares are of same class and carry equal voting rights. Notes Maturity 2019 2018 Loan 1 (i) November 2023 372,841,527 406,944,694 11.1. Non-controlling interests Loan 2 (ii) December 2022 145,207,659 193,562,353 Set out below is summarised financial information for each subsidiary that has non-controlling interests that are material to the Group. The amounts Loan 3 (iii) April 2019 – 3,880,483 disclosed for each subsidiary are before inter-company eliminations. Loan 4 (iv) May 2022 1,139,228 1,610,633 Summarised consolidated statement of financial position 519,188,414 605,998,163 Less: Deferred financing cost (4,264,527) (5,444,694) Ci–San Trading W.L.L. 31 December 31 December 514,923,887 600,553,469 2019 2018 Current assets 66,341,147 67,061,701 Presented in the consolidated statement of financial position as follows: Current liabilities (3,716,716) (7,996,527) 2019 2018 Current net assets 62,624,431 59,065,174 Current portion 114,719,958 85,665,476 Non-current assets 65,646,881 67,429,385 Non-current portion 400,203,929 514,887,993 Non-current liabilities (122,425) (115,163) 514,923,887 600,553,469 Non-current net assets 65,524,456 67,314,222 Net Assets 128,148,887 126,379,396 The deferred financing costs consist of arrangement fees. The movements in the deferred financing costs were as follows: Accumulated effective NCI 32,856,111 31,746,424 2019 2018 NCI of remaining subsidiaries 4,274,579 9,423,741 At 1 January 5,444,694 – Recognized during the year – 5,511,500 Total 37,130,660 41,170,165 Amortised during the year (Note 22) (1,180,167) (66,806)

Summarised consolidated statement of profit or loss and other comprehensive income At 31 December 4,264,527 5,444,694

Ci–San Trading W.L.L. Notes: 2019 2018 (i) Loan 1 represents a loan drawn down on 11 December 2018 to finance the working capital requirements and the investments of the Group. The loan is payable in 18 Revenue 48,530,409 61,646,283 quarterly instalments with effect from August 2019. The loan carries interest at commercial market rates. (ii) Loan 2 represents a loan drawn down on 10 January 2018 to finance the reconstruction and refurbishment of City Centre. The loan is payable in 17 quarterly Profit for the period 1,075,690 2,959,805 instalments with effect from 24 December 2018. The loan carries interest at commercial market rates. Other comprehensive income/(loss) – (653,982) (iii) Loan 3 was obtained on 04 May 2014, to finance the purchase of heavy equipment and machines. The loan is payable by 18 quarterly instalments with effect from 26 February 2015, previously QR 1,672,058 until June 2017 and revised to QR 1,940,241 until the last instalment in April 2019. The loan carries interest at commercial Total comprehensive income 1,075,690 2,305,823 market rates. (iv) Loan 4 was obtained on 12 July 2016, to finance the purchase of vehicles, plant and machinery. The loan is payable by 51 monthly instalments of QR 46,355 in the first Profit allocated to NCI (Effective) 257,056 715,542 month with effect from 1 June 2017 and QR 39,284 in the subsequent months. The loan carries interest at commercial market rates. Dividends paid to NCI – – The Group has complied with the financial covenants of its borrowing facilities during the 2019 and 2018 reporting period.

Summarised statement of cash flows Net debt reconciliation

Ci–San Trading W.L.L. Due within one Due after one 2019 2018 Cash/ year Lease year Lease overdraft Borrowing liabilities Borrowing liabilities Total Cash flows from operating activities 20,002,364 (16,312,422) Net debt as at 1 Jan 2019 599,889,857 (85,665,476) – (514,887,993) – (663,612) Cash flows from investing activities 67,960 832,863 Recognised on adoption of IFRS 16 – – (12,692,331) – (61,820,951) (74,513,282) Cash flows from financing activities – – Acquisition – leases – – (13,553,690) – (6,855,719) (20,409,409) Net increase/(decrease) in cash and cash equivalents 20,070,324 (15,479,559) Non-cash movement of interest expense on IFRS 16 – – (3,273,728) – – (3,273,728) Cash flows (85,186,134) (29,054,482) 13,160,608 114,684,064 – 13,604,056 Net debt as at 31 December 2019 (Note 30.2) 514,703,723 (114,719,958) (16,359,141) (400,203,929) (68,676,670) (85,255,975)

Net debt as at 1 Jan 2018 346,827,554 (228,232,370) – (5,491,116) – 113,104,068 Cash flows 253,062,303 142,566,894 – (509,396,877) – (113,767,680) Net debt as at 31 December 2018 (Note 30.2) 599,889,857 (85,665,476) – (514,887,993) – (663,612)

114 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 115 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Consolidated Financial Statements for the Year ended 31 December 2019 Consolidated Financial Statements for the Year ended 31 December 2019 (all amounts are expressed in Qatari Riyals unless otherwise stated) (all amounts are expressed in Qatari Riyals unless otherwise stated)

Notes to the consolidated financial statements continued

14. Employees’ end of service benefits 17. Revenues

Movements in the provision reflected in the consolidated statement of financial position were as follows: Commission, 2019 2018 Service incentives and Rental Sale of goods income agency fees Income Total At 1 January 26,204,583 25,259,237 2019: Provision made during the year (Note 21) 3,677,343 3,994,315 At a point in time 876,138,423 32,753,293 44,554,141 – 953,445,857 Other adjustments (1,646,895) – Overtime – 39,915,249 776,234 – 40,691,483 End of service benefits paid during the year (2,141,954) (3,048,969) Rental Income – – – 299,979,265 299,979,265 At 31 December 26,093,077 26,204,583 Total 876,138,423 72,668,542 45,330,375 299,979,265 1,294,116,605

15. Accounts payable and accruals Commission, Service incentives and Rental 2019 2018 Sale of goods income agency fees Income Total Trade accounts payable 239,287,225 193,665,094 2018: Advances from customers and tenants 49,219,082 46,810,223 At a point in time 827,166,060 28,512,965 55,319,378 – 910,998,403 Accruals 38,771,844 39,352,164 Overtime – 73,505,355 1,439,438 – 74,944,793 Other payables 73,191,691 74,086,945 Rental Income – – – 300,608,578 300,608,578 400,469,842 353,914,426 Total 827,166,060 102,018,320 56,758,816 300,608,578 1,286,551,774

16. Amounts due to related parties 18. Direct costs

2019 2018 2019 2018 Entities controlled by ultimate parent Cost of inventories recognised as an expense 732,589,723 648,802,629 Gettco Company W.L.L. – Gettco Refrigeration and Air-conditioning 660,486 663,056 Direct salaries and wages (Note 21) 32,207,317 61,698,258 Al Jazi Real Estate Investment Company W.L.L. 317,710 1,202,171 Depreciation (Note 6) 17,671,735 17,330,577 Integrated Information Systems W.L.L. 535,566 349,122 Operator’s management fees 13,454,180 13,132,008 Other related parties 2,810,969 7,318,125 Operating expenses on real estate properties 32,754,920 38,395,504 Provision for obsolete and slow moving inventories (Note 10) 1,750,088 1,228,671 4,324,731 9,532,474 Right-of-use amortisation 700,200 – Joint venture Other operating expenses 28,975,415 38,768,152 Aamal ECE W.L.L. 9,008,446 7,342,461 860,103,578 819,355,799 13,333,177 16,874,935

19. Other income Transactions with related parties during the year were as follows: 2019 2018 2019 2018 Foreign exchange (loss)/gain (76,835) 153,358 Purchase of investment properties from: (Loss)/Gain on disposal of property, plant and equipment (23,950) – Entity controlled by ultimate parent – 179,500,000 Miscellaneous income 8,104,889 11,261,513 Purchase of goods and services from: 8,004,104 11,414,871 Entities controlled by ultimate parent 5,130,689 23,621,583 Rental expense: Ultimate parent 6,225,924 5,338,492 20. General and administrative expenses Entities controlled by ultimate parent 2,292,676 2,536,654 2019 2018 8,518,600 7,875,146 Management and employees’ compensation (Note 21) 70,111,831 69,792,295 Depreciation 12,890,931 10,034,127 Operator’s management fees Rent (leases not capitalise) 6,118,449 9,663,482 Joint venture 13,457,440 13,132,008 Donations 5,758,689 7,817,765 Insurance and professional fees 8,329,049 5,405,581 Note: Repairs and maintenance 3,221,552 2,831,214 A joint venture manages the operations of City Centre Mall. Other related party transactions are disclosed in Note 26. Communication costs 1,475,676 1,511,813 Bank charges 1,130,860 1,143,982 Postage, printing and stationery 1,175,310 1,168,727 Training and business development 544,179 483,371 Right-of-use amortisation 10,199,574 – Miscellaneous expenses 13,987,946 9,469,462 134,944,046 119,321,819

116 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 117 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Consolidated Financial Statements for the Year ended 31 December 2019 Consolidated Financial Statements for the Year ended 31 December 2019 (all amounts are expressed in Qatari Riyals unless otherwise stated) (all amounts are expressed in Qatari Riyals unless otherwise stated)

Notes to the consolidated financial statements continued

21. Staff costs 25. Contingent liabilities

2019 2018 The Group had the following contingent liabilities from which it is anticipated that no material liabilities will arise. Salaries and wages 96,056,433 123,042,438 2019 2018 Employees’ end of service benefits (Note 14) 3,677,343 3,994,315 Letters of guarantee 139,115,482 146,116,118 Other employee benefits 2,585,372 4,453,800 Letters of credit 31,745,312 23,313,124 102,319,148 131,490,553 Notes: (i) Letters of guarantee include performance, tender and bid bonds and payment guarantees given to suppliers and contractors by the Group in the ordinary course of Staff costs are presented as follows: business, which will mature within twelve months from the reporting date. 2019 2018 (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. Direct costs (Note 18) 32,207,317 61,698,258 General and administrative expenses (Note 20) 70,111,831 69,792,295 26. Related party disclosure 102,319,148 131,490,553 A) Related party transactions Related parties represent major shareholders, directors and key management personnel of the Group, and entities controlled, jointly controlled or significantly influenced by such parties. Pricing policies and terms of these transactions are approved by the Group’s management. 22. Finance costs

2019 2018 B) Related party balances Interest expense 24,033,433 2,406,073 Amounts due from and due to related parties are disclosed in notes 9 and 16, respectively. These balances do not carry interest and are repayable on Interest expense on leases 3,273,728 – mutually agreed dates, generally within one year. Amortisation of deferred financing costs (Note 13) 1,180,167 66,806 The Group did not record any impairment of receivables relating to amounts due from related parties in either year. This assessment is undertaken 28,487,328 2,472,879 each financial year through examining the financial position of the related party and the market in which the related party operates.

C) Compensation of key management personnel 23. Basic and diluted earnings per share The remuneration of key management during the year was as follows: Basic earnings per share is calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number 2019 2018 of ordinary shares outstanding during the year. Short-term benefits 1,854,000 1,320,000 2019 2018 Employees’ end of service benefits 108,150 63,750 Profit for the year attributable to equity holders of the parent (QR) 322,266,953 445,270,636 1,962,150 1,383,750 Weighted average number of shares outstanding during the year 6,300,000,000 6,300,000,000 Basic and diluted earnings per share (QR) 0.05 0.07 D) Board of Directors remuneration No remuneration has been proposed for Board of Directors for the year 2019 (2018: QR 1,800,000).

Impact of share split 27. Dividends The Board of Directors of Qatar Financial Markets Authority (‘QFMA’) issued its resolution at its 4th meeting for the year 2018 held on 16th of The shareholders of the Company approved at the Annual General Meeting held on 15 April 2019 a cash dividend of 6% of the share capital December 2018 to reduce the nominal value of shares of listed companies in Qatar to be one (1) Qatari Riyal so that each existing share will split into amounting to QR 378 million (QR 0.60 per share, before share split) from the profit of 2018 (2018: QR 378 million – QR 0.60 per share). ten (10) shares. The Board of Directors proposed cash dividend of 4% of the share capital amounting to QR 252 million (QR 0.04 per share) for the year 2019 which Accordingly, the Group held an Extraordinary General Meeting of Shareholders on 15th of April 2019 approving the share split with a ratio of 1:10 in will be submitted for formal approval at the Annual General Assembly Meeting. accordance with the said resolution. As a result, the number of shares became 6,300 million with a nominal value of one (1) Qatari Riyal each. Following IAS 33 (33.64), the earnings per share has become QR 0.05 and QR 0.07 (QR 0.71 as previously disclosed in the consolidated statement of profit or loss and 28. Contribution to social and sports fund other comprehensive income for the year ended 31 December 2018) for the years ended 31 December 2019 and 31 December 2018 respectively. During the year, the Group appropriated an amount of QR 8,056,674 (2018: QR 11,131,766) representing 2.5% of the consolidated net profit attributable for the equity holders of the parent for the year as a contribution to the Social and Sports fund. 24. Commitments 29. Segment information 2019 2018 For management purposes, the Group is organised into business units based on their nature of activities and has four reportable segments as Estimated capital expenditure approved and contracted for at the year-end but not provided for: described below, which are the Group’s strategic divisions and the Head Office as follows: Investment properties 118,706,535 127,459,819 Property, plant and equipment 126,266 413,721 Property: 118,832,801 127,873,540 The segment involves leasing the facilities of retail outlet complex, real estate investments and property rental businesses.

Trading and distribution: The segment represents wholesale and/or retail distribution of pharmaceutical and consumable items, home appliances, medical equipment, tyres and lubricants and industrial printing.

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 power plants and management of industrial enterprises.

118 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 119 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Consolidated Financial Statements for the Year ended 31 December 2019 Consolidated Financial Statements for the Year ended 31 December 2019 (all amounts are expressed in Qatari Riyals unless otherwise stated) (all amounts are expressed in Qatari Riyals unless otherwise stated)

Notes to the consolidated financial statements continued

29. Segment information continued 29.2. Assets and liabilities: Managed services: Trading and Industrial Managed Parent The segment involves provision of housekeeping and cleaning services, entertainment and amusement services, call center services and acting as Property distribution manufacturing services Company Eliminations(i) Total travel agents. At 31 December 2019 Current assets 152,092,004 650,950,019 171,890,190 86,133,444 196,432,754 (122,214,645) 1,135,283,766 Parent Company: Non-current assets 7,317,600,147 39,552,703 486,516,063 54,445,834 20,296,913 (33,061,574) 7,885,350,086 It provides corporate services to the subsidiaries of the Group. Total assets(iii) 7,469,692,151 690,502,722 658,406,253 140,579,278 216,729,667 (155,276,219) 9,020,633,852 For each of the strategic divisions, the Group’s managing director (the chief operating decision maker) reviews internal management reports on a Current liabilities 141,880,846 231,051,063 101,023,437 28,997,608 166,515,701 (124,586,537) 544,882,118 regular basis. The managing director monitors the operating results of its business units separately for the purpose of making decisions about resource Non-current liabilities 98,407,370 32,869,857 29,889,529 38,090,576 328,503,889 (32,787,545) 494,973,676 allocation and performance assessment. Segment performance is evaluated based on the financial position and operating profit or loss of these segments. Transfer pricing between operating segments are at amounts agreed between the parties. Total liabilities(iii) 240,288,216 263,920,920 130,912,966 67,088,184 495,019,590 (157,374,082) 1,039,855,794

(ii) 29.1. Operating segments: Capital expenditure 40,322,873 3,118,745 2,728,093 2,123,454 35,083 – 48,328,248 The operating segment, after elimination of inter-company transactions, is presented as follows: Trading and Industrial Managed Parent At 31 December 2018 Property distribution manufacturing services Company Eliminations Total Current assets 123,895,671 559,426,309 176,842,647 96,323,212 510,682,007 (235,677,867) 1,231,491,979 For the year ended 31 December 2019 Non-current assets 7,280,911,965 11,228,814 509,602,584 12,826,619 92,736 – 7,814,662,718 Revenues Total assets 7,404,807,636 570,655,123 686,445,231 109,149,831 510,774,743 (235,677,867) 9,046,154,697 – External parties 283,690,725 794,766,311 160,777,130 54,882,439 – – 1,294,116,605 Current liabilities 222,895,480 160,460,877 113,705,602 25,694,909 164,984,054 (231,286,085) 456,454,837 – Inter-segments(i) 6,418,134 4,846,492 8,341,044 8,259,537 – (27,865,207) – Non-current liabilities 146,635,847 10,342,631 8,390,039 5,182,883 370,541,176 – 541,092,576 290,108,859 799,612,803 169,118,174 63,141,976 – (27,865,207) 1,294,116,605 Total liabilities 369,531,327 170,803,508 122,095,641 30,877,792 535,525,230 (231,286,085) 997,547,413 – At a point in time 14,556,251 793,142,682 138,273,383 15,917,770 – (14,138,116) 947,751,970 (ii) – Over time – 6,470,121 – 47,224,206 – (7,308,957) 46,385,370 Capital expenditure 276,509,496 1,313,505 8,853,224 2,880,075 20,874 – 289,577,174

14,556,251 799,612,803 138,273,383 63,141,976 – (21,447,073) 994,137,340 Notes: Rental income 275,552,608 – 30,844,791 – – (6,418,134) 299,979,265 (i) Inter-segment balances are eliminated on consolidation. (ii) Capital expenditures consist of additions to property, plant and equipment and investment properties. Operating results 218,036,620 98,849,750 (40,757) 4,729,818 (35,770,972) – 285,804,459 (iii) See Note 3 for details about the impact from the change in accounting policy on the current period segment disclosures.

Profit/(loss) for the year before 30. Financial risk management share in results of equity-accounted investees 218,357,498 98,858,629 (1,478,520) 3,141,231 3,252,138 – 322,130,976 30.1 Financial risk factors Share in results of The Group’s principal financial liabilities comprise interest bearing loans and borrowings, bank overdrafts, amounts due to related parties and trade equity-accounted investees 5,578,756 – 54,096,283 2,590,279 (62,265,318) – – accounts payable. The main purpose of these financial liabilities is to raise finance for the Group’s operations. The Group has various financial assets such as trade accounts and other receivables, amounts due from related parties and bank balances which arise directly from its operations. Profit/(loss) for the year 223,936,254 98,858,629 52,617,763 5,731,510 (59,013,180) – 322,130,976 Depreciation 7,700,715 2,832,453 15,312,556 4,670,478 46,463 – 30,562,665 The main risks arising from the Group’s financial 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. For the year ended 31 December 2018 Revenues (A) Market risk – External parties 287,651,851 690,699,862 219,668,648 88,531,413 – – 1,286,551,774 Market risk is the risk that changes in market prices, such as interest rates and foreign currency exchange rates will affect the Group’s profit, equity (i) – Inter-segments 7,763,332 5,714,283 10,799,034 8,134,399 – (32,411,048) – or value of its holding of financial instruments. The objective of market risk management is to manage and control the market risk exposure within 295,415,183 696,414,145 230,467,682 96,665,812 – (32,411,048) 1,286,551,774 acceptable parameters, while optimising return.

– At a point in time 16,802,623 694,974,707 200,708,332 16,026,275 – (17,513,533) 910,998,404 (i) Interest rate risk – Over time – 1,439,438 – 80,639,537 – (7,134,183) 74,944,792 The Group’s financial assets and liabilities that are subject to interest rate risk comprise bank deposits, interest bearing loans and borrowings and 16,802,623 696,414,145 200,708,332 96,665,812 – (24,647,716) 985,943,196 bank overdrafts. At the reporting date, the interest rate profile of the Group’s interest bearing financial instruments was as follows: Rental income 278,612,560 – 29,759,350 – – (7,763,332) 300,608,578 2019 2018 Fixed interest rate instruments: Operating results 235,690,320 125,297,461 7,236,662 8,151,288 (27,489,091) – 348,886,640 Financial liabilities – – Profit/(loss) for the year before share in results of Floating interest rate instruments: equity-accounted investees 235,690,320 125,297,461 6,870,953 8,151,288 71,580,987 – 447,591,009 Financial assets 8,447,679 8,272,947 Share in results of Financial liabilities (514,923,887) (600,553,469) equity-accounted investees 5,410,066 – 94,617,514 – (100,027,580) – – (506,476,208) (592,280,522) Profit/(loss) for the year 241,100,386 125,297,461 101,488,467 8,151,288 (28,446,593) – 447,591,009 Depreciation 3,768,404 3,509,271 15,113,354 4,930,199 43,476 – 27,364,704 The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s financial assets and liabilities with floating interest rates. Note: (i) Inter-segment revenues are eliminated on consolidation.

120 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 121 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Consolidated Financial Statements for the Year ended 31 December 2019 Consolidated Financial Statements for the Year ended 31 December 2019 (all amounts are expressed in Qatari Riyals unless otherwise stated) (all amounts are expressed in Qatari Riyals unless otherwise stated)

Notes to the consolidated financial statements continued

30. Financial risk management continued With respect to credit risk arising from the other financial assets of the Group, the Group’s exposure to credit risk arises from default of the 30.1 Financial risk factors continued counterparty, with a maximum exposure equal to the carrying amount of these instruments as follows: The following table demonstrates the sensitivity of the consolidated statement of profit or loss and other comprehensive income to reasonably possible 2019 2018 changes in interest rates by 25 basis points, with all other variables held constant. The sensitivity of the consolidated statement of profit or loss and Bank balances 519,174,829 605,861,437 other comprehensive income is the effect of the assumed changes in interest rates for one year, based on the floating rate financial assets and financial Amounts due from related parties 38,922,231 48,963,825 liabilities held at 31 December. The effect of decreases in interest rates is expected to be equal and opposite to the effect of the increases shown. Retention and other receivables 56,771,582 58,733,693 Changes in basis points Effect on profit Other financial assets 614,868,642 713,558,955 2019 Total credit risk exposure 928,156,307 1,009,769,531 Floating interest rate instruments +25 b.p. (63,034)

2018 The Group reduces the exposure of credit risk arising from other financial assets by maintaining bank accounts in reputed banks and providing Floating interest rate instruments +25 b.p. (9,056) services only to creditworthy related parties.

(ii) Foreign currency risk (ii) Impairment of financial assets Foreign currency risk is the risk that the value of the financial instruments will fluctuate due to changes in foreign exchange rates. The Group has the following financial assets that are subject to IFRS 9’s expected credit loss model: –– Trade and retention receivables Trade accounts payable and accrued expenses include amounts due in foreign currencies, mainly US Dollar, UAE Dirham, Great Britain Pound (GBP) –– Other receivables and Euro, of which the Group has a currency risk primarily on the balances payable in Euro and GBP. Out of the total borrowings, the Group has QR 513,784,659 of borrowings denominated in US Dollars, amounting to USD 140,862,353 as of 31 December 2019 (31 December 2018: QR 595,062,353 of –– Amounts due from related parties borrowings amounting to USD 163,176,471). –– Cash in banks

The Group does not hedge its foreign currency exposure. As both Qatari Riyal and UAE Dirham are pegged to the US Dollar, balances in US Dollars While cash and cash equivalents are also subject to the impairment requirements of IFRS 9, the identified impairment loss was immaterial. and UAE Dirhams are not considered to represent significant currency risk to the Group. Trade and retention receivables In the opinion of the management, the Group’s exposure to currency risk as at 31 December 2019 and 2018 is minimal as the foreign currency The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade financial liabilities denominated in Euro and GBP represent 1.14% (2018: 4%) of total liabilities. Hence, not considered to represent significant risk. receivables and retention receivables. (B) Credit risk To measure the expected credit losses, trade receivables and retention receivables have been grouped based on shared credit risk characteristics Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. and the days past due. The retention receivables relate to the billed works which were held by the customer until the defect period is over and have The Group’s exposure to credit risk is indicated by the carrying amount of its financial assets, which consist principally of outstanding trade and substantially the same risk characteristics as the trade receivables for the same types of contracts. The Group has therefore concluded that the retention receivables, amounts due from related parties, other receivables and cash and cash equivalents. expected loss rates for trade receivables are a reasonable approximation of the loss rates for the contract assets with the presumption that default does not occur later than when a financial asset is 90 days past due. (i) Risk management 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 On that basis, the loss allowance was determined as follows for both trade receivables and retention receivables: are subject to credit verification procedures to ensure credit worthiness. Each new customer is analysed individually for creditworthiness before the Expected Gross carrying Loss delivery of products or services. Customers that fail to meet the creditworthiness may transact with the Group only on prepayment basis. 31 December 2019 loss rate amount allowance

Property rentals are mostly received in advance or contracted with post-dated cheques. In addition, receivable balances are monitored on an ongoing Current 4.75% 278,067,764 13,212,413 basis and the purchase limits are established for each credit customer, which are reviewed regularly based on the level of past transactions and More than 90 but less than 180 days past due 16.34% 29,833,712 4,874,246 settlement. Receivables amounting to QR 24,038,483 (2018: QR 16,111,282) are collaterised by tenant deposits of QR 40,170,824 (2018: QR 39,545,202). More than 180 but less than 270 days past due 21.42% 19,640,178 4,207,737 The fair value of the tenant deposits approximate its carrying amount. More than 270 but less than 360 days past due 28.14% 9,637,310 2,711,490 More than 360 days past due 69.68% 72,667,008 50,630,844 The Group’s maximum exposure with regard to trade receivables, net of allowance reflected at the reporting date, was as follows: Total 409,845,972 75,636,730 Gross trade Loss Net trade Business segment: receivables allowance receivables Expected Gross carrying Loss 2019: 31 December 2018 loss rate amount allowance Property 31,570,710 (7,532,227) 24,038,483 Current 3.25% 252,504,590 8,195,163 Trading and distribution 233,080,130 (25,450,514) 207,629,616 More than 90 but less than 180 days past due 11.63% 29,771,865 3,463,498 Industrial manufacturing 107,288,525 (40,935,921) 66,352,604 More than 180 but less than 270 days past due 27.19% 13,244,368 3,600,813 Managed services 16,985,030 (1,718,068) 15,266,962 More than 270 but less than 360 days past due 58.41% 10,956,017 6,399,938 Net trade receivables 388,924,395 (75,636,730) 313,287,665 More than 360 days past due 71.70% 92,898,504 66,606,687 Total 399,375,344 88,266,099 Gross trade Net trade Business segment: receivables Loss allowance receivables 2018: Trade receivables and retention receivables are considered credit impaired or non-performing when it becomes probable to the Group that a customer Property 23,097,974 (6,986,692) 16,111,282 will enter bankruptcy. Trade receivables and retention receivables are written off when there is no reasonable expectation of recovery. Indicators Trading and distribution 243,785,249 (38,653,338) 205,131,911 that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group. Industrial manufacturing 94,015,614 (40,508,928) 53,506,686 Managed services 23,577,838 (2,117,141) 21,460,697 Net trade receivables 384,476,675 (88,266,099) 296,210,576

122 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 123 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Consolidated Financial Statements for the Year ended 31 December 2019 Consolidated Financial Statements for the Year ended 31 December 2019 (all amounts are expressed in Qatari Riyals unless otherwise stated) (all amounts are expressed in Qatari Riyals unless otherwise stated)

Notes to the consolidated financial statements continued

30. Financial risk management continued 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 30.1 Financial risk factors continued 40%. The Group includes within debt, interest bearing loans and borrowings, less cash and cash equivalents. Capital includes equity attributable to the equity holders of the parent. Other financial assets at amortised cost Other financial assets at amortised cost include other receivables, amount due from related parties and cash and cash equivalents. The Group 2019 2018 considers the probability of default upon initial recognition of an asset and whether there has been a significant increase in credit risk on an ongoing Borrowings 514,923,887 600,553,469 basis throughout each reporting period. To assess whether there is a significant increase in credit risk, the Group compares the risk of a default Lease liabilities 85,035,811 – occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and Less: Cash and cash equivalents (514,703,723) (599,889,857) supportive forwarding-looking information, including actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the borrower’s ability to meet its obligations. The result of applying the expected credit risk model Net debt/(cash and cash equivalents) 85,255,975 663,612 is immaterial and hence the Group has not recognised any loss allowance as of 31 December 2019. Total capital 7,943,647,398 8,007,437,119

(iii) Significant estimates and judgments related to impairment of financial assets Capital and net debt 8,028,903,373 8,008,100,731 The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. The Group uses judgment in making Gearing ratio 1.06% 0.01% these assumptions and selecting the inputs to the impairment calculation, based on the Group’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period. Details of the expected loss rates used are disclosed in the table above. The gearing ratio has increased from last year due to an increase in lease liabilities during the year upon the adoption of IFRS 16. (C) Liquidity risk 31. Fair values of financial instruments Liquidity risk is the risk that the Group will not be able to meet its financial 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 sufficient liquidity to meet its liabilities when due, under both normal and stressed Financial instruments comprise financial assets and financial liabilities. conditions, without incurring unacceptable losses or risking damage to the Group’s reputation and is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts and bank loans and borrowings. Financial assets consist of bank balances, short term bank deposits, amounts due from related parties, retention and other receivables and trade accounts receivable. Financial liabilities consist of bank overdrafts, borrowings, amounts due to related parties and trade accounts payable. The Group monitors its risk to a shortage of funds using a recurring liquidity planning tool. This tool considers the maturity of financial assets (e.g. trade receivables) and projected cash flows from operations. The Group’s terms of sales or services require amounts to be paid within 30-90 The fair values of these financial instruments except for borrowings approximate their carrying values due to the short term maturities of days from the invoiced date. The Group has facilities exposure from financial institutions which are also used to meet short term financing needs. these instruments.

The table below summarises the maturity profile of the Group’s financial liabilities at 31 December based on contractual undiscounted payments. The fair value of borrowings is estimated based on discounted cash flows using interest rate currently available for the debt or similar terms and remaining maturities. As all borrowings carry variable interest rates, the fair value of borrowings approximates their carrying values. 0 to 3 3 to 12 1 to 5 > 5 months months years years Total The fair value of the investment properties is disclosed in Note 5. There have been no transfers into and out of Level 3 measurements during 2019 the year. Borrowings 35,777,345 105,042,861 438,876,687 – 579,696,893 Lease liabilities 4,817,651 17,883,171 60,359,510 73,939,263 156,999,595 32. Critical judgements and key sources of estimation uncertainty Trade accounts payable 239,287,225 – – – 239,287,225 In the application of the Group’s accounting policies, which are described in Note 2, management is required to make certain judgments, estimates Other payables 73,191,691 – – – 73,191,691 and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated Amounts due to related parties 13,333,177 – – – 13,333,177 assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. 366,407,089 122,926,032 499,236,197 73,939,263 1,062,508,581 The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised. 2018 Borrowings 22,109,176 93,671,709 578,288,760 – 694,069,645 32.1 Critical judgments in applying accounting policies Trade accounts payable 193,665,094 – – – 193,665,094 There are no critical judgments, apart from those involving estimations that management has made in the process of applying the entity’s Other payables 74,086,945 – – – 74,086,945 accounting policies. Amounts due to related parties 16,874,935 – – – 16,874,935 306,736,150 93,671,709 578,288,760 – 978,696,619 32.2 Key sources of estimation uncertainty The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting date, that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year: 30.2 Capital management –– Estimate the fair value of investment properties (Note 5) The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development –– Estimated useful lives of property, plant and equipment (Note 6) of the business. The Board of Directors monitors the capital, which the Group defines as total shareholders’ equity, excluding non-controlling interests and the level of dividends to ordinary shareholders. –– Estimate the recoverability of receivables and other receivables (Note 30)

The Board also seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages The estimates and underlying assumptions are reviewed regularly. Revisions to accounting estimates are recognised in the period in which the and security afforded by a sound capital position. The Group’s target is to achieve a return on shareholders’ equity (excluding non-controlling estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and interests) greater than the weighted average cost of capital of the Group. future periods.

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 December 2019 and 2018.

124 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 125 Strategic Corporate Corporate Financial Overview Report Responsibility Governance Statements

Notes

126 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 127 Notes

T: +971 (0)56 150 8292

128 Aamal Company Q.P.S.C. Annual Report 2019 Aamal Company Q.P.S.C. Annual Report 2019 aamal.com.qa Aamal Company Q.P.S.C. Box 22477 Doha - Qatar P.O. floor 15th City Tower, 4435 0777 +974 4435 0666 Fax: +974 Tel: [email protected]: