QATAR OMAN INVESTMENT COMPANY – Q.P.S.C. DOHA –STATE OF QATAR FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019 TOGETHER WITH INDEPENDENT AUDITOR’S REPORT QATAR OMAN INVESTMENT COMPANY – Q.P.S.C. DOHA –STATE OF QATAR FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019 TABLE OF CONTENTS Pages Independent auditor’s report -- Statement of financial position 1 Statement of profit or loss 2 Statement of comprehensive income 3 Statement of changes in equity 4 Statement of cash flows 5 Notes to the financial statements 7-28 INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS, QATAR OMAN INVESTMENT COMPANY Q.P.S.C DOHA, STATE OF QATAR Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Qatar Oman Investment Company Q.P.S.C. (the “Company”) which comprise the statement of financial position as at 31 December 2019, and the related statement of profit or loss, statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at 31 December 2019 and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs). Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in the State of Qatar, and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for opinion. Emphasis of Matters Without qualifying our opinion, we would like to draw attention to; • As disclosed in note 6.2 to the financial statements, the company has adjusted the opening balance of the retained earnings as of January 1, 2019 with an amount of QR 6,787,616 in respect of its share of results of the associate of the prior years up to the year ended December 31, 2018. The Company has not considered the impact of the adjustment on the comparative figures since the management is of the opinion that it is impractical to represent the comparative figures. However, the matter does not affect the net profit, assets or equity for the current year. Our opinion is not modified in respect of this matter. • The net share of results of the associate company “Tilal Development Company S.A.O.C” has been recorded based on financial statements prepared and signed by the management of the associate without singed auditor’s report. Therefore, there may be differences between the audited financial statements and the financial statements obtained from the management of the associate. Other matter The financial statements for year ended December 31, 2018 were audited by other independent auditors whose reports dated on February 20, 2019 expressed a qualified audit opinion on those financial statements in respect of lack of application equity method accounting for its investment in an associate. INDEPENDENT AUDITOR’S REPORT Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current year. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We identified the following key area of focus: Key Audit Matters How our audit addressed this key audit matter: Valuation of investment property Our audit procedures over valuation of investment property included the following: Investment property represents significant portion of the Company’s total assets, so was considered on • Evaluated the objectivity, independence and a key audit matter. expertise of the independent valuation experts appointed by management. The Company records its investment property at fair • Tested the underlying data used as inputs for value, with changes in fair value being recognized the valuation. in the statement of profit or loss. The fair value is • Evaluated the assumptions and estimates determined by two independent real estate valuation made by the management and the independent experts appointed by the management. valuation expert, appropriateness of the These valuations are based on estimates such as valuation technique and reasonableness of estimated rental revenues, occupancy rates, discount data used in the valuation. rates and market indicators. • Verified the disclosures on the valuation of Refer to the follow notes to the financial statements: investment property, presented in notes to the financial statements. • Note 3 (b) significant accounting policies. • Note 5 investment property. • Note 20 Fair value disclosure. Other Information The Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements and our auditor’s report thereon. The annual report is expected to be made available to us after the date of this auditor’s report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. When we read the annual report, if we conclude that there is a material misstatement therein we are required to communicate the matter (s) with those charged with governance. INDEPENDENT AUDITOR’S REPORT Responsibilities of Management and Those Charged with Governance for the Financial Statements The Board of Directors is responsible for the preparation and fair presentation of the financial statements in accordance with IFRSs, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Audit Committee is responsible for overseeing the Company’s financial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material 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 influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the 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 Company’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 Company’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